There’s no question the falling Euro could be extremely bad news for many in the tourist industry but possibly good news for some consumers. Here’s how it could affect major market segments:
Air travel
The International Air Transport Association has issued a forecast suggesting that industry revenue, already downgraded to $3.5 billion from $4.9 billion, could turn into losses exceeding $8 billion if the eurozone financial situation melts down into a full-blown banking crisis and recession. In a worst-case scenario, European air carriers would lose $4.4 billion, while North American airlines, including American, United, US Airways and Delta, would take a $1.8 billion hit. In other words, bad news for European carriers but more demand for US-based.
Hotels
According to Travelocity, a euro collapse would likely lead to fewer European travelers taking vacations on the continent, which could create an excess of available hotel rooms. That would mean lower prices and possibly never-before deals for consumers. Hotel rates in perhaps Europe’s most troubled country, Greece, have already dropped by as much as 20%, according to TripAdvisor."While the Greek economy has experienced a traumatic year, the silver lining for tourism could be an increase in visitors due to the lower prices in many of its popular destinations," said Emma Shaw, a TripAdvisor spokesperson.
Cruises
Luxury cruise that include Seabourn and Cunard are trying to get this year’s cruises filled ahead of any potential crises. Some cruise lines admit there’s lessened demand in part because of the Concordia tragedy. So some observers predict lower prices are full steam ahead.
For all elements of the travel industry, the Euro’s further decline would be drastic. But it all depends how far and how long it lasts. Meanwhile, travelers from North America and the rest of the world stand to be the biggest beneficiaries of the meltdown, according to analysts.
By David Wilkening
