Euro’s slide a boon for American tourists

By Deepa Seetharaman

NEW YORK (BestGrowthStock) – The euro’s drop against the U.S. dollar may spur American tourists to visit Europe this year, boosting hotels in troubled euro zone countries, top executives at two major hotel companies said on Thursday.

The euro has lost 7 percent against the U.S. dollar this month on worries over high debt and budget cuts in euro zone countries such as Greece and Italy.

This could be a boon for U.S. vacationers who are starting to loosen their purse strings this year after cutting back in 2009, executives said.

“So much of our business in southern Europe — I’m speaking of Spain, Portugal, Italy and Greece — is tourism-driven,” Starwood Hotels & Resorts (HOT.N: ) Chief Executive Frits van Paasschen said in an interview in New York.

“With the euro getting weaker, we actually think this could be a good summer for U.S. tourism in Europe,” said van Paasschen, who is visiting Italy next month with his family.

Hotels in Paris and London — the “typical European circuit” could benefit from this trend, said Ritz-Carlton Hotel Co, LLC President Simon Cooper said in a separate interview.

Starwood, which operates the St. Regis, Sheraton and W brands, has more than 160 hotels in Europe. Ritz-Carlton, a unit of Marriott International (MAR.N: ), has 12 hotels in Europe, including four in Spain.

Concerns that Europe’s debt woes could spiral into a broader financial crisis have rattled the U.S. stock market, which has fallen from its April highs. But both executives expressed doubt that this would be a long-term issue.

“I see this as a significant blip rather than the second phase of a W recession,” Cooper said.

Van Paasschen added that turmoil in Europe could create opportunities for Starwood to convert some independent hotels into Starwood-branded properties, which can help the company boost revenue.

Both executives said they expect hotels to perform better this summer than in 2009. Van Paasschen said the performance could even be better than 2007 levels.

Consumers are more likely to travel this summer than they were a year earlier, a Deloitte LLP survey of 1,001 consumers showed this week.

Seventeen percent of respondents said they were willing to travel overseas this summer, according to the survey, which was conducted between April 27 and May 5.

The recent dip in the euro could prompt more U.S. tourists to consider a trip overseas, Deloitte consultant Adam Weissenberg said in an interview last week.

“Europe’s a bargain right now,” van Paasschen said. “If you go back to the last couple of summers, you didn’t hear Americans on the street.”

On the flip side, U.S. destinations that primarily cater to the leisure travelers — such as Orlando, Florida — could be hit by the depreciation in the euro, Cooper said.

But U.S. cities that primarily lure business travelers, such as New York and Washington, D.C., are likely to hold up.

Both Cooper and van Paasschen said business demand continues to gather strength, which has helped both companies see a lift in rates at some hotels in recent months.

For Starwood, April room rates on average started to rise from year-ago levels and May is likely to see an uptick in rates as well, van Paasschen said.

“They’re beginning to come back,” Cooper said, referring to corporate spending levels at luxury hotels. But he cautioned that “it’s certainly not the frothy levels of yesteryear.”

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(Reporting by Deepa Seetharaman; Editing by Richard Chang)

Euro’s slide a boon for American tourists