In the 200 or so years since its inception, the US has enthralled and appalled in equal measure. We love to mock Uncle Sam and his many funny habits, but from Levi jeans to the Hubble telescope; iPods to The West Wing, America still informs, entertains, enriches and endures.
Starbucks, sub-prime mortgages and, most tellingly, Iraq, have taken the shine off the country’s image abroad, but US tourism chiefs displayed a renewed sense of confidence at last month’s Pow Wow event in Miami.
Economic woes
Delegates were told the Obama administration was “the ace in the hole” of a new United States, offering “a face of integrity and respect worldwide”.
The fanfare surrounding Obama’s presidency has certainly improved the country’s standing, but as popular as one man can be, not even he can allay our fears over the economy – nor strengthen our beleaguered currency.
With the pound now buying fewer dollars than at any point in the last three years, will our love for US holidays diminish?
Department of commerce director Helen Marano stressed the overall recession would have an immediate effect on bookings, whereas the strong dollar would simply change spending habits on the ground.
“People are mindful of where their discretionary income can be spent, and more importantly, whether to hold onto it – at least for the first part of the year,” she said.
Visitor numbers are indeed down: January and February combined saw a drop of 22% year on year from the UK, with indications of an even further dip in March.
“We believe people are waiting to see if their financial situation is stable, but we expect bookings will come back around the end of the year and in 2010,” added Marano.
Marketing focus
It is not hope without reason. The Travel Promotion Act – one of the biggest stories at Pow Wow – could provide the US with a central marketing body that has been absent for years.
Though still waiting for approval from the Senate, it is expected to raise up to $200 million through a private-public partnership, funded partly by a $10 fee for the new ESTA online visa waiver system.
The UK-based Visit USA Association was concerned international visitors would be footing the bill for funding, but welcomed the prospect of a new promotional body for the US.
VUSA also pointed out the marginal improvement of the pound against the dollar: the exchange rate is now running close to $1.50; not so different from the average rates of the past decade. Only in recent years have we enjoyed the unusual highs of $1.90 or $2 to the pound.
ABTA spokeswoman Frances Tuke agreed UK travellers can be very sensitive to currency fluctuations, but stressed the current situation in the US could be a lot worse.
“Compared with the decline in forward bookings to European destinations this year as a result of the pound’s drop against the euro, bookings to the US were, up until the end of April, not quite so badly affected,” she said.
Nor has the economy put British Airways off launching a new route – its Heathrow-Las Vegas service may be a gamble, but with hotel rates plummeting in the desert resort, it could pay off royally.
The benefits of the proposed TPA cannot be disputed. If successful, it could even fund permanent tourist offices in key overseas markets – of which the UK is still number one, providing 4.6 million visitors last year. But it will take at least a year from now to come to fruition – that is if the Senate passes it.
Bureaucracy barrier
The $10 ESTA fee is unlikely to put many travellers off – it is considerably cheaper than the visa for many other long- haul destination, for example.
But it does add another layer of bureaucracy to the entry procedure, which the US Travel Association has been at pains to improve since current president Roger Dow was appointed four years ago.
A delay in the final roll-out of ESTA doesn’t help matters, but Dow was still bullish for the year ahead. Agents, he said, should sell the US on the value of the travel experience.
“This is a country with everything for everybody. If you want a beach, we’ve got beaches; a mountain – we’ve got mountains. History and culture, city shopping, theme parks.
“It may come at a higher price; but it’s a higher price all around the world right now. Even with today’s exchange rate, the US is still phenomenal value. I don’t think we’ll ever see as many travel bargains as this again.”
Certainly, hoteliers were out in force at Pow Wow and many were promoting new rates to catch tour operators’ attention.
Loews for example – which this year appointed representatives to boost its presence in the UK – promised:
- Savings of up to $500 with a number of value-added deals, including 20% discounts on bookings more than 60 days in advance
- Incremental food-and-drink credits (starting at $50 on two-night stays, rising to $500 for seven nights)
- Free room upgrades at its beachfront properties and a free round of golf at its golf resorts.
Operator response was positive, but Funway Holidays managing director Stephen Hughes said they needed more – and quickly.
“We’ve been renegotiating rates based on contracts agreed in September 2008, and the market has changed dramatically since then.
“Hoteliers know they can’t just switch the corporate traffic back on, so we’re seeing a flexibility that we’ve not seen for a few years.”
It’s not the first time this has happened, but the current situation is worse than September 11 2001, said Hughes.
“In that instance, we weren’t dealing with the complete erosion of consumer confidence from almost every market.”
But Hughes acknowledged there was still good value to be found in the US, particularly family-friendly product such as private homes in Orlando. Cities including New York were also dropping rates, and he anticipated some good deals for January-March 2010.
“The big question is whether the pre-Christmas shopping season will still be affordable,” he added.
Whatever the package price, that iPod still won’t be as cheap as it was this time last year, so perhaps this is our cue to enjoy those beaches, national parks, museums and galleries Dow spoke of. Now is the time to sell the US as holiday, not a retail opportunity.
Dollars and sense
That the US hasn’t been hit so hard by currency fluctuations as the eurozone may have a lot to do with a lack of any real alternatives. It’s easy to switch-sell Greece for Turkey, but Canada is not always a match for its southern neighbour.
There’s no Las Vegas north of the border, and Toronto is too small to take on New York. But that’s no excuse for complacency: the dollar is at least 50p more expensive than this time last year: $1.50 is about as good a rate as you will find on the high street.
So where to advise clients to buy? In a survey this month, Which? found Eurochange the best value, charging £351 for $500 (£461 bought €500).
Airport bureaux de change such as TTT, American Express and Travelex were the worst value for money, as they tended to charge commission. Rates at Heathrow last week hovered around $1.41 – no match for the high street.
The Post Office was found to have good deals online, but not in a branch, so if you don’t sell currency yourself, tell clients to shop around.
If you do exchange currency, stress the convenience and remember that using credit and debit cards abroad can incur a fee with each transaction – it may still be better value to make one large transaction.