A weaker dollar, skyrocketing prices and ‘record’ visitor numbers: Good luck in Europe this summer

By CNN Newsource

Published June 8, 2024 1:30 am

By Julia Buckley, CNN

(CNN) — Temperatures are rising. Hotel prices are exploding. And travelers are already behaving badly. Welcome to another summer in Europe.

From the headlines, things already look chaotic. Famous sites are raising their entry fees. Hotel rooms are like gold dust. And the dollar has slipped against both the pound and the euro.

Oh, and there’s the small matter of crowds. “There’s been a substantial increase on last year’s demand,” says Tom Jenkins, CEO of the European Tourism Organisation, speaking about US travelers to Europe. “2023 saw higher numbers than 2019, and this year we’re comfortably seeing more – record volumes of Americans coming to Europe.”

Kayla Zeigler agrees. As the owner of Destination Europe, she is sending “record numbers” of clients to the continent this year.

Graham Carter, director of Unforgettable Travel, a tour operator with a 90% US client base, says that many guests are finding the idea of Europe prohibitively expensive this year.

“People are wondering, is Europe worth it?” he says. “It’s booking up in advance and prices are quite high. There’s been such a huge demand for travel in the past three years, and lots of places are pushing up prices.”

Is summer in Europe already a washout? According to the experts, that all depends on what kind of sacrifices you’re prepared to make.

A weak dollar

First things first: travelers from the US are already at a disadvantage due to a weak dollar. Against the euro, $1 was worth around 91 or 92 euro cents as of June 5, at mid-market rates. Sure, that’s better than the December 2020-January 2021 five-year low when the dollar was hovering around 82 cents. But it’s also down from a year earlier, when a dollar was worth about 95 euro cents – and it’s way down from last September’s five-year high when it peaked at 1.04 euros, according to currency conversion specialists Wise.

For those traveling to the UK it’s a similar state of affairs. This time last year, $1 netted travelers 80 pence. As of Wednesday, it was 78p – a fall from the September peak of nearly 83p.

The dollar is also down, year on year, against 11 more European currencies. From Bosnia to Bulgaria, Denmark to Iceland, Poland to Romania and Sweden to Switzerland, travelers changing dollars will be worse off. While a few cents to the dollar doesn’t sound much on a single transaction, the small drops can make a difference on credit card bills on the return home. A 500 euro hotel room equates to $543 at Friday’s mid-market exchange rate, where it would have been $480 in September.

It’s not all bad, though. In Europe it is up against three currencies: the Czech koruna (21.9 koruna to the dollar last year, to 22.7 currently), the Hungarian forint (from 344.7 to the dollar last year, to 359.4 this year), and the Ukrainian hryvnia, though few will be considering Ukraine for a vacation this year. One currency the dollar is unusually strong against is the Turkish lira. Last June, visitors were swapping one dollar for 21 lira; this week, they’re getting 32.

‘Spectacular’ hotel price hikes…

On the ground, inflation is up, and entrance fees are rising. The Eiffel Tower will put up prices by 20% from June 17, Istanbul’s Hagia Sophia now charges 25 euros for entry; Venice is charging day-trippers 5 euros on peak dates.

Entry fees pale in comparison to hotel bills however. Jenkins says that prices have risen “quite spectacularly” in major cities, and Tim Hentschel, CEO of HotelPlanner.com, agrees.

“A lot of the time we’re seeing hotels for $500 a night that were $300 last year,” he says.

However, that’s not necessarily because hotels have randomly increased their prices. It’s down to high occupancy levels, he says. As hotels fill up, their remaining rooms get more expensive. “It’s become, how much can the hotel sell that last 10% of inventory. Rates really begin to spike because of compression,” he says.

“So once you hit 90% occupancy, a $350 room can spike to $500. It’s not like the whole hotel sold at $500 – a lot sold at $250. It’s the procrastinators paying $500.” He should know – he’s a self-described procrastinator.

Data from Hotel Monitor, American Express Global Business Travel’s annual analysis of worldwide hotel rates, backs his theory up. Its industry predictions for 2024 suggest many major European cities should see room rates increasing by around 10%. Paris, Amsterdam and Dublin were all predicted to be 10-11% higher, with Berlin, Stockholm, Barcelona and London all up by over 9%. Bottom line: stop procrastinating.

The good news is that Hentschel says that these price hikes aren’t across the board; instead, they’re at the higher end. That’s why his advice is to drop down the star ratings to find a good deal. “One and two star hotels don’t have the pricing power,” he says. The same goes for hotels a little further from the destination. “Go to Murcia not Marbella, Milos instead of Mykonos,” he says. “You get the same sunsets, the same Instagram pictures for a tenth of the price. These aren’t downgrades – they are places that haven’t made the top 10 list of Conde Nast for the past 10 years.”

If you’re looking to stay in a city, try a town further out, he says. In London, for example, five stars are hitting as much as £1,000 (about $1,270) per night. “But if you go outside the M25 (London’s outer ringroad), three- and four-star hotels are having a tough time getting £100 a night.” His top tip for London? Windsor, home to the royals and just 29 minutes by train from Paddington station.

The sweet spot? A three star hotel in a secondary destination. That should net you a good deal – even in the terrible summer of 2024, he says.

…But cheaper airfares

It may not feel like it, but US-Europe airfares are trending lower, says Hayley Berg, lead economist at Hopper. Her data – which collates all worldwide flight fare searches – shows that the average air fare from the US to Europe this summer is down 16% on 2023 to $892 round trip.

In fact, she says, “Europe is on sale this year.”

For the major destinations, it’s even better. Hopper data from June shows that the average return flight from the US to London is down 21%, year on year. On the continent, prime destinations Rome, Barcelona, Athens, and Paris have all seen whopping double-figure drops: by 34%, 37%, 28% and 38% respectively for fares in June, July and August.

None of these fares are exactly giveaways. Prices are still higher than in 2019, but are aligned with 2017 and 2018, suggesting that the wild post-pandemic price hikes might be over. Berg calls it “a path back to normal prices.”

Far from the madding crowds

Did someone mention the crowds? With numbers spiking and anti-tourism measures in place from Venice’s daytripper fee to Mallorcan residents staging protests, some people want to stay away from the obvious European destinations.

Jenkins speaks of a “softening in demand” for the “main cultural cities.”

Carter’s clients try to avoid July and August because of the crowds and heat, preferring May, June and September. But even in those less-busy months, crowds are a concern this year.

“We’re getting a lot of people wanting to avoid the Venices, Romes, Florences,” he says. “People are saying, ‘We still want to visit Italy but we want to avoid the crowds.’”

They’re doing the right thing. 2023 saw 134 million “arrivals” in Italy – the highest visitor numbers in history, according to data from Italy’s tourism ministry. Half of those were foreign visitors, and the signs are that 2024 will surpass them, thanks to what tourism minister Daniela Santanchè has called a “targeted strategy.”

Zeigler says that any client booking a popular destination this year is getting a reality check before they go. “We prepare our clients who are visiting tourist-heavy destinations about the crowds, and in many cases we plan their touring and activities around peak crowd times for them to try to have the most pleasant experience possible,” she says, adding that she is booking them accommodation slightly outside of the prime locations: Praiano and Ravello, for example, instead of Amalfi and Positano, for those visiting the Amalfi Coast.

Carter is sending his reluctant travelers to more rural regions, like Puglia and Sicily, or advising them to try a different country entirely – Slovenia instead of Italy (for its mountains and wineries) and Croatia instead of the Greek islands. Ireland and Portugal are also increasingly popular for his clients.

Jenkins has a novel suggestion: France. Olympics host cities tend to see a drop in tourism around the Games, he says – and since Paris is the main attraction for visitors to France, he thinks regional France will be less busy than usual. His prediction appears to be coming true: although the Amex GBT analysis predicted a 11% spike in Paris hotel rates this year, so far they have only risen 8%. That 38% drop in airfare to the city’s Charles de Gaulle airport is looking very tempting.

For those sticking to the usual destinations, add-ons and activities are where travelers are really being hit this year, says Hentschel, who just booked an Amalfi Coast trip for a client – including a 60-minute massage for $400. “Travel is at historic highs and inflation is high,” he says. “Activities have skyrocketed.” They’re also selling out fast – so if you’re wanting to book, be quick. Zeigler says that on-the-ground costs are around 30% more than they were in 2019 for her clients.

Is now too late?

So is there still time to plan a European summer, or is it too late?

Book that flight fast, advises Berg; prices are only going to go up. Or, “If you’re flexible, go for September” – she predicts a similar year-on-year fare drop in addition to the regular 10-30% autumn price fall. Alternatively, wait a year – Berg predicts that US-Europe fares will remain the same or go down for 2025.

Hentschel advises late bookers to try “alternative accommodation” – dropping a star rating, staying further away, or trying something like a B&B.

Carter says that there are still “pockets” of availability in July and August but warns that clients shouldn’t expect last-minute deals. But with refreshing honesty, he advises people to wait.

“I just wouldn’t bother with summer – I’d look at autumn 2024 or spring 2025 if you want to get some value out of the trip.

“I think summer this year, you’re just going to get stung.”

As Hentschel says, “The further in advance you book, the more you save.” As numbers continue to rise in Europe, make that your travel motto for the future.

Article Topic Follows: CNN - Style

Jump to comments ↓