Breakfast in, shopping out: US tourists hit by soaring dollar

SAN FRANCISCO/NEW YORK/LONDON, Sept 29 (Reuters) – In the weeks leading up to departing for San Francisco on their vacation this month, Jeff Skipper and his wife Valerie, from the United Kingdom, watched helplessly as the US dollar continue its meteoric rise against the British pound.

The pound/dollar exchange rate – which fell to a record high this week – has reduced the affordability of the already expensive city of Golden Gate for the couple, forcing them to save on some holiday luxuries.

“The exchange rate has been the biggest topic of conversation since we got here,” said Jeff Skipper, 50, an electrician.

“Everything is quite expensive for us,” said Valerie, a 47-year-old university administrator.

“We buy food from grocery stores rather than sit down meals because when you change it to the UK amount it doesn’t seem worth it. It really is a lot of money.”

The pair are among hordes of visitors to the United States feeling the pinch of the mighty greenback, which hit two-decade highs this month, in part due to interest rate hikes by the Federal Reserve. Read more

For British tourists to the United States, the pain of the endemic dollar has been amplified by the collapse of the pound, which entered a near free fall on Monday after the British government announced unfunded tax cuts that have scares away investors. Read more

The pound hit a record low of $1.0327 on Monday, after falling 20% ​​against the dollar this year. It was trading just above that on Wednesday at $1.0888.

“Now it’s dollar for pound… It really hit home,” said Colin Taylor, a retired telecommunications engineer from the UK who was also visiting San Francisco with his wife.

“We have breakfast and it costs us 50 pounds, 50 pounds, you know. And if it was at home it would be 20 or 25 pounds. So that’s a big, big leap for us.”

‘TOO HIGH’

While the pound has seen some of the sharpest gyrations in recent days, currency markets across the board have seen huge swings amid heightened geopolitical tensions and central bank rate hikes to rein in the surge in inflation.

The relative strength of the US economy, however, allowed the Fed to raise rates more aggressively than its peers, pushing the dollar higher against the British pound, euro and Japanese yen, as well as the a multitude of smaller currencies.

The dollar index, which measures the greenback against a basket of currencies, hit a new 20-year high on Wednesday at 114.78. Read more

“The dollar is too high. So we are spending, but not as we would like,” said Jose Alvado, a 48-year-old Argentinian accountant who was visiting New York with his wife and two daughters.

“We go to cheaper restaurants… We go to the Disney store and we don’t choose everything. We just take a look and then we go.”

Yet with the lifting of COVID-19 travel restrictions, spending on leisure travel to the United States – adjusted for inflation – is expected to reach $87 billion this year, from $33 billion in 2020 and 2021, and $145 billion in 2019, the US Travel Association said in June.

And some tourists say they won’t let the strong dollar spoil their fun.

“I have to take advantage of New York,” said Gilles Nolorgues, 48, an app designer in Paris.

“MONOPOLY MONOPOLY”

For travelers outside the United States with dollars in hand, spending is easy.

With the dollar and euro hitting parity for the first time in 20 years in July, American tourists splurged on luxury goods in Paris and enjoyed cheaper treats in London’s West End, reported Reuters. read more read more

Americans are spending 11% more on domestic and overseas travel in 2022 compared to 2019, according to consumer survey data collected by the American Society of Travel Advisors, a trade organization.

“It feels like spending money on Monopoly,” said Ike Armstrong, 26, from California, speaking near Trafalgar Square in London.

In Bali, Indonesia, Johnny Follin, 39, of Los Angeles, California, said the strong dollar allowed him to indulge in more good food, drink and massage than he would have done otherwise. The US dollar has risen about 7% against the Indonesian rupiah this year.

“(To) bring US dollars here is the best time in ages,” said Paul Spight from behind the counter at his currency exchange office in Wollongong, south of Sydney, Australia.

The US dollar is up about 10% against the Aussie this year. “It really helps the buying power to come,” added Spight.

Reporting by Noel Randewich in San Francisco, John McCrank in New York, Alun John in London, Ananda Teresia in Jakarta and Tom Westbrook in Sydney; writing and additional reporting by Michelle Price; edited by Deepa Babington

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