Globally, the tourism industry benefits from foreign visitors and sometimes, the assessment of how much a vocational destination is competitive compared to others should take into account the impact that the currency exchange rate fluctuations have in hotel rates.
We know that hotel rates change frequently, sometimes on a hourly basis. On a destination level, the ADR can make some destinations more or less appealing than others, that is more expensive than others. In this process, currency exchange rates play an important role.
Over the last 12 months, not only the European dept crisis and the dept downgrade of the U.S. have been the subject of the headlines, but they also had an impact on the currency exchange rates.
As you can see in the table below, the YOY (Nov 2011 VS Nov 2010) percentage changes in ADR show how, in extreme but real cases (rows in gray), the ADR goes down when rates are quoted in euros but goes up when looked at in U.S. dollars:
This type of considerations are really important to assess that the decrease in the value of the U.S. dollars made some U.S. destinations more desirable for European vacationers even if the ADR in U.S. dollars have increased.In other cases, like in London and in Rome, the ADR had a higher increase if looked at in U.S. dollars than in EURO.
Another consideration is that a certain increase in ADR in some European destinations has been perceived by the U.S. travelers 2 or 3 times as much than the perception that vacationers from Europe and paying in EURO have had.
When assessing the ADR changes, a hoteliers may want to take into consideration also this aspect simply because clients do.
