I know it's hard for many people to think of a vacation when the economy is in such a mess, but if you can refocus for a moment I've got some good news for you.
That vacation you're not thinking about has just gotten less expensive. And it doesn't have anything to do with declining prices because of the Wall Street mess either.
What has happened is that the dollar has been slowly and quietly been gaining strength against some other currencies during the past few months. That gives you a lot more buying power in some overseas vacation spots.
For example, look at the approximate increase in value of the dollar versus some other currencies since June 1. The dollar now buys you 23.4% more Euros, almost 35% more British Pounds, 47% more Aussie dollars, and 33% more South African Rands, It goes 36% further in Norway, about 15% In Switzerland and a whopping 89% in Iceland.
Not all destinations are offering fire-sale prices on their exchange rate, however. Argentina's peso has only changed about 7% in our favor and China has become more expensive, for example.
The dollar hasn't returned to its glory days, of course, but there's more to the picture. Despite air fares staying relatively high -- although you can snag a few good bargains if you look around -- hotel prices are edging downward due to that better exchange rate. Remember that great exchange rate in Iceland? According to Forbes, you can now stay in a four-star hotel in Iceland for $70.00 per night. Basically, the entire country is on sale.
But the really good news is that you can now find hotels that are waving about some good deals to lure you in. Just log onto places such as TravelZoo, Shermans, Orbitz, etc. or Google some of the better-know chains and see what deals you can unearth. You may be surprised.
Jim Ferri
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As the recession builds in the US and Americans trim their budgets, discretionary spending will surely take the initial hit. That's not good news for the travel and leisure industries.
Numerous companies throughout the sector -- hotels, airlines, theme parks, cruise lines, casinos, you name it -- have warned that bad times are to come in the year ahead.
Hotels will certainly take a big hit and the pain is already being felt. Since March, Starwood's stock has fallen 68.5%, Marriott's by 53%. If you think those declines are bad, the situation at the Las Vegas Sands is nothing short of horrific -- it's stock has plummeted more than 94 percent since last December, the latest hit coming last week following an auditor's report concerning doubts about Sands' ability to stay in business.
PricewaterhouseCoopers is forecasting that demand for hotels will fall by 2 percent, which on the surface may not appear to be significant. But when you factor in the increase in supply in hotel rooms, real occupancy levels will fall to nearly 58%.
"This is an unprecedented period of decline in recent history," Reuters recently quoted hotel industry veteran Bjorn Hanson of New York University as saying. "This just is unlike any period we have to compare."
Things aren't much better in the cruise industry where Carnival's bookings for 2009 lag bookings for the same time in 2008. Along with Carnival, Royal Caribbean has also warned about a slowdown.
Even at Disney, which had been weathering the early days of the recession fairly well since it had begun repositioning itself as a value-oriented, family-vacation experience, things are taking a turn for the worse. The company has just reported a sharp downturn in hotel bookings, and said that attendance at its US parks was down about 1 percent this quarter. Worse, however, is the fact that bookings for the first two quarters of fiscal 2009 are currently off about 10 percent. That's a number that could grow depending on which way the economic winds blow with a new administration arriving in Washington.
And that's exactly where all of this is going to land: in Washington. Needless to say, as the economy continues to disintegrate around us there are very few people, John McCain and a few others notwithstanding, who'd want to be in Obama's shoes.
Many American industries need help at the moment. Although it's the financial and auto industries that are getting the most play in the media at the moment, let's hope that the new administration doesn't close its eyes to the plight of the travel industry -- and more importantly, wakes up to how this industry can help in some small way to turn around the economy.
Following Obama's historic victory, Roger Dow, president and CEO of the Travel Industry Association (TIA), pledged that the industry would support the anew administration in improving the economy and bolstering America's international image.
Since the industry is a major economic force in every state, and not only accounts for more than $700 billion in spending but also for employing one out of every eight US workers in one capacity or another, it is quite an economic force.
The US travel industry may not be the engine that will turn the economy around, but it certainly can be one of the locomotives that can help jumpstart it. Let's just hope all those folks in Washington stop arguing partisan politics and get this train moving down the right track.
Jim Ferri
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I don't know if you saw the report two weeks ago about Amtrak reporting record numbers of riders. It's not totally the price of oil that has spurred train travel since it's been increasing for six years now. Maybe people are just beginning to see how good it can be.
I've always enjoyed train travel, although I've never done it much in the US except on Amtrak's Metroliner between New York and Washington, and commuting on the Long Island Rail Road. I was back on the LIRR a few weeks back, chatting with some kids who were riding in to the city for The New York Anime Festival. (That's them all made up in the photo). This train was more modern than the ones I had ridden previously, but other than that, things were pretty much the same -- people with their faces buried in newspapers, commuters dozing off on their way to work, masses rushing through Penn Station...
I developed my affection for train travel in Europe, where I enjoyed the freedom of not only being able to relax and walk around, but also the freedom of having complete freedom.
Today I was back on one of those trains again, this time in Italy with my wife, traveling from Milan out to Como, that fantastic town pinned on to the edge of the lake with the same name. Marjorie and I are really on our way to China but I've brought her here for a couple of days as a surprise, since this has always been one of those special places for me and she's never been here. I'm proud that I've managed to keep it a secret right up to when we got on the train, although I do admit to torturing her for the past two weeks as she's tried to guess where we'd be going.
En route to Como I remembered a lot of the experiences I've had on European trains. Years later, I'm still carrying all those wonderful people and places around in the scrapbook in my mind and, hopefully, I'll be adding a few more on this trip.
Anyway, I'm getting totally off track here, to use an obvious metaphor. Train travel never became popular in the US because it just didn't fit in well with our lifestyle. When we wanted to go somewhere we hopped on a plane since we wanted to be there, not use up our vacation times getting there. After all, it was only those Europeans with the gads of vacation days who could afford a leisurely train ride. Many Europeans, on the other hand, better understood that oftentimes the journey is the destination.
Jim Ferri
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