The Currency Factor

For many of us, the most complex aspect of putting together a client’s trip is the planning stage. Once a destination is finally identified, hotels booked, transfers arranged and clients VIPed, there’s a small sigh of relief, the client enjoys their trip and then we move on to the next one.

In today’s complex global marketplace, however, there are additional considerations to take into account that can have implications on trips near and far. For example, currency fluctuations — and other oddities in the foreign exchange market — are an integral, often overlooked component of trip planning.

This spring has been a great time to visit Europe, because the dollar is making significant gains against the euro. Clients visiting the European Union last December were paying almost $650 for a 500 euro room, while those making the trip in the second week of March were paying $130 less. Multiply that savings over several nights, and a not-insignificant sum of money is now freed up.

This is a prime opportunity to really push European destinations, and sell, sell, sell while the currency is weak. In these scenarios, quick decision-making and client commitment is key. Prepaying for hotel accommodations guarantees rates at the current exchange and can lead to hefty savings, so it’s important that clients are ready to lock in rates while they are still favorable. Réjane Narbonnet, sales manager at Dorchester Collection’s Hôtel Plaza Athénée in Paris, confirms that she has “definitely seen” a gradual, though steady, uptick in U.S. bookings as the euro has declined, and expects the trend to continue as long as the currency continues to weaken. Indeed, there has never been a better opportunity to visit some of Europe’s best properties, which now deliver competitive value.

Currency fluctuations also are important to monitor because they can greatly affect the desires of travelers. With a weaker euro, travelers will find Europe an more attractive value — food, accommodations and activities become less expensive in comparison, and even an inexperienced traveler will realize there is simply more bang for the buck.

Weak Euro Will Spur Travel

This is especially effective for encouraging our budget-conscious clients. For those who had initially balked at the idea of a comparatively expensive European jaunt, a weakening euro may be all the excuse they need to finally jump across the pond. Conversely, if you have clients based in the Eurozone, this might be an appropriate time to have them holiday somewhere where prices are not rooted in U.S. dollars.

In addition to substantial savings on travel and accommodations, visitors also can find savings in more unexpected sectors. As journalist James Stewart wrote in a recent column in the New York Times, the European luxury goods market is now in a rare state. The weakening euro, combined with decreased general demand, has led to slashed prices in retail outlets across the continent.

Of course, nothing in the foreign exchange market is guaranteed. Currency is fluid, but knowing — and anticipating — changes is just part of the game. As travel agents, it’s our responsibility to educate ourselves and our clients about the ever-changing global climate. It’s just one of the many hats we have to wear.

Goldman Sachs analysts have adjusted their currency forecast, pegging the euro to dollar exchange at 95 cents over the next 12 months. They also see the euro sliding to 80 cents by 2017. With these types of fluctuations in mind, it’s more important than ever to be ahead of the curve.

So what can you do to stay current on currency? A good place to start are conversion websites like XE.com or CNN Money, which make it easy to follow trends and view forecasts. The New York Times has a fantastic business section, as does the Financial Times. Both of these publications present information in a way that is easy to understand, and could be passed on to your clients. Integrate these resources into your daily routine so that it becomes almost second nature to check them out.

It’s extremely important that we pay close attention to every aspect of our work. In today’s world, the only thing we can guarantee is that we’ll give our clients our best effort, ensuring that every experience is nothing short of extraordinary.