The effects of the euro crisis on tourism: understand the consequences
The low dollar may have created a unique opportunity to visit Europe for very little money! Read this article to understand how the euro crisis affects tourism.
Euro-dollar parity: is it good or bad for tourism?
Are you worried about the effects of the euro crisis on tourism in recent weeks? A curious fact has caught the attention of those who follow market indicators.
Thus, for the first time in 20 years, the price of the dollar has become equivalent to that of the euro. Indeed, this euro crisis has direct effects on sectors of the economy such as tourism.
However, this is the mark of the currency crisis that Europe’s most important currency has been suffering since the beginning of the year.
The euro and the dollar are at parity value. Understand how to take advantage of this context and why it can be dangerous for the economy.
In recent days, the euro has not only equaled its value to the dollar, but it has also been lower. In the last week, the price of the euro has fluctuated around a level of $0.98.
This means that if you went to a currency exchange yesterday with $100 dollars, you would walk away with approximately €102. In fact, the difference may seem small.
However, it is enough to drastically affect sectors directly linked to the exchange rate and export/import of products/inputs. Among these, we highlight the tourism sector.
In fact, any change in the price of the dollar against the euro makes travelers wary.
However, this time we have good news for travelers? Indeed, is it time to pack your bags to enjoy the European summer?
Read this article and find out. However, before you start, a word of advice: dust off your passport!
What is the euro crisis and how has it affected the tourism market?
Indeed, to understand the effects of the euro crisis on tourism, it is important to understand the background of the world economy today.
As you all know, we have just gone through one of the most critical periods of the pandemic.
We were forced to stay indoors while bars, restaurants and shops were closed (some of them for good). Now that the economy is back up and running, there are still problems to be overcome.
In fact, many countries still face difficulties in re-establishing their supply chain. In fact, this is a common problem in both the eurozone and the US.
However, the difference is that Americans re-established their consumption pattern faster than Europe. Furthermore, the effects of the Russo-Ukrainian war were felt much more in Europe than in the rest of the world.
In this way, the uncertainties surrounding this conflict and the “ghost of recession” that haunts Europe have made people less confident in the euro.
Across the Atlantic Ocean, despite the problems, the US appears to be economically healthier.
As a result, investors began exchanging their euros for dollars, which caused the value of the euro to plummet.
In practice, for American tourists interested in going to Europe, this means that the American currency is appreciated.
Thus, American tourists can consume more on the old continent by paying fewer dollars.
However, life for European tourists in America gets more complicated. Now, those will need more euros to enjoy their holidays here.
The Russia-Ukraine conflict already affecting the international stock market. Click and learn how to manage your money in this scenario.
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Is it a good time for Americans to travel?
Thus, the main effect of the euro crisis on tourism for Americans is the stimulus to travel to the European continent. Also, the good news for travelers is that this state will last for quite some time.
According to Robin Brooks, chief economist at the Institute of International Finance, the trend is for the euro to be below the dollar for years.
So, in terms of exchange rates, this is the best time of the century to travel to Europe.
However, the problem now is the price of air tickets and the reduction in the offer of flights due to the lack of professionals in the air sector. These factors can make your trip much more expensive.
To understand what is happening with airline ticket prices and when they will return to normal, check out our post below!
Have you ever wondered why are airline prices so high? We have the answer! Find out what's behind the rise in ticket prices.
About the author / José Gonçalo
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