Analyst Weak Dollar Or Not Miamis Tourism Industry Should Be Ok
Written by Jacquelyn Weiner on February 25, 2010
By Jacquelyn Weiner
Despite shifts in the euro’s value amid market concerns over Greece’s debt, expert observers say Miami’s tourism industry shouldn’t be too worried whichever way the currency drifts.
Because tourists tend to plan vacations in advance, short-term fluctuations aren’t likely to put much of a damper on travel patterns, said Manuel Lasaga, president of the Miami-based economic and finance consulting firm StratInfo.
"It would have to be a noticeable drop, hold several months," he said.
And that’s the opposite of how Mr. Lasaga, who monitors foreign currency trends, characterized the projected effect of Greece’s deficit and European Union squabbles over what’s next.
"It might provide for a hiccup in the value of the euro," he said. "I don’t see them [market concerns over Greece] as serious or long term."
Tuesday evening, one euro cost $1.3510, according to Bloomberg.com.
What may still affect Miami’s tourism industry positively for a year or two, he said, is a weak dollar.
Although the dollar has made recent gains against the euro, Mr. Lasaga projected that the dollar will stay on a down trend for one to two years, "mainly because of the huge deficits."
In turn, he said, the federal government will have difficulty attracting foreign investors to buy US bonds.
So although there are worries in Europe over Greece’s deficit, "Our problems are much bigger," he said.
"It really is a question of who has the more serious problem."
Still, a continued weak dollar is a plus for Miami where international tourism is concerned, Mr. Lasaga said.
"Depreciation in the value of the dollar has helped in terms of the net flow of European visitors as well as South America," he said. "Hotels and attractions will see more business from foreign visitors the more the dollar falls in value."
But even if the dollar’s value were to significantly improve long-term, that could in turn boost domestic travel whereas the current ramped-up international travel might fall off.
"The beauty of it is that Miami, because of its nice combination of domestic and international travel, tends to benefit on both sides of the equation," said Rolando Aedo, senior vice president of marketing for the Greater Miami Convention & Visitors Bureau.
Domestic and international travel amount to fairly even parts of Miami’s travel industry, he said.
Of the 1,549,064 total passenger arrivals to Miami International Airport in December, 828,930 were domestic and 720,134 were international, according to the bureau.
And while Europeans are a major presence among Miami tourists, the majority of visitors aren’t European, Mr. Aedo said.
Latin America makes up "practically two-thirds of all our international business," he said.
Many of these countries are faring well, he said, citing Brazil in particular.
Tuesday evening, one dollar could be purchased for 1.8269 Brazilian reals, according to Bloomberg.com.
Canada may make up the largest number of international tourists coming to Miami, Mr. Aedo said, but "Brazil is the No. 1 overseas market with expenditures."
So for now, he said, the Greater Miami tourism industry is taking the influx in international tourists coupled with a weaker dollar in stride, ramping up its international advertising efforts.
And when the dollar does make greater headway on these foreign currencies, domestic travelers will be welcomed to stay domestic where their money is worth more — what Mr. Aedo sees as a win-win situation.
"Currency fluctuation is something that has always existed," he said. "It will always be part of the equation."