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Analysis

American tourists in France gained 20% in buying power

In 2 years (2014-2016), the evolution of hotel prices in France the euro-dollar exchange rate have radically changed things in terms of competitive pricing of the destination France. A look at more than two decades of change in "purchasing power" of Americans staying at french hotels.

For an American tourist or other foreign visitor whose currency is based on the dollar (eg. most Gulf countries), the evolution of the cost of a night in a hotel in France depends on the change in htoel prices there combined with the dollar:euro exchange rate.

In order to understand the change in buying power for visitors to France, Hospitality ON calculated the evolutions of average daily rates at French hotels into dollars, based on data from out partner HotelCompset Database and the Banque Centrale Européenne (Banque de France prior to 1998). Thus, for the last two decades, French hotel prices as "perceived" by American visitors changed as follows (base 100 in 1996):





In just two years (2014-2016) the cumulated effects of the drop in hotel prices and a stronger dollar to the euro have meant 20% more buying power for Americans at French hotels. This allows them to pay less for their room (in US$) today than in 2007 overall and even less than in 2004 in the upscale, offsetting more than a decade of inflation...

Several major periods stand out from the evolutionary curve of French average daily rates between 1996 and 2016. Between 1996 and 2002, stability of average daily rates; prices shot up between 2002 and 2008 (to nearly 80% higher than in 1996). The decrease in 2009-2010 was quickly followed by a recovery; prior to the brutal 20% drop recorded in 2015 and 2016. This dramatic increase in purchasing power allows them to pay the same amount as in 2004 to stay at a French hotel.

And this trend continues: based on the value in January 2017 compared to the average in 2016, the evolution of the Euro / USD exchange rate allows Americans to gain 5% in additional buying power in 2017. this combines with the evolution of hotel prices in euros in the Hexagon.

In the short term, security challenges continue to appear to dissuade American visitors from making a massive return to France, whereas the competitive pricing of its hotels has improved significantly. But doesn't everything come to he who waits?
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