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American Economic Woes Affect European Tourism


The dollar's sharp drop on currency markets, along with economic doldrums in the United States are taking their toll on American tourists and expatriates overseas. Even Paris has seen a 10 percent decline in its number-one foreign visitor. Lisa Bryant looks at the issue from the French capital.

The cold and rainy weather in Paris has not stopped Joe Schaeffer, an American tourist from Milwaukee, Wisconsin, from visiting the City of Lights with his family of four. Nor have the city's expensive prices - all the higher because of the huge drop in value of the American dollar compared to the European euro.

"We were coming anyway, not matter the price. We might not stay as long. We might eat cheese sandwiches," he said.

At Notre Dame cathedral a few blocks away, Linda Surma from Detroit, Michigan says she is also shocked by high prices in Paris these days.

"We were at just a little cafe and it cost me five euros for tea - a tea bag. I thought that was rather ridiculous. I mean, what is a tea bag? My soup was seven and a cup of tea was five and that was a little shocking," she said.

But Surma does not regret deciding to come to Paris, and has no plans to trim tourist attractions from her itinerary because of the expense - even if she might not buy souvenirs.

Paul Roll is managing director of the Paris Convention and Visitors Office. He says Americans tourists in Paris - who numbered about 1.5 million last year - tend to cut expenses when the dollar is weak, rather than cancel their trip.

"We have no statistics on the subject, but we have seen over the years that when it gets more expensive to go to Europe, they downgrade the type of services they buy. Instead of going to a luxury hotel, they will go to a four-star hotel. Instead of going to a gastronomical restaurant, they will go to something that has less stars on the Michelin (restaurant guide)."

But recently a number of Americans have been staying away from Paris altogether - and from Europe as a whole - as the dollar reaches record lows against the euro. Right now, it is nearly a $1.60 against the European currency - a few years ago, the two currencies were about equal.

Paris, has weathered a decline in tourism before - notably in 2003, when trans-Atlantic differences over the Iraq war were at a high. At the time, the French tourist office launched a campaign to woo back Americans, hiring American actor and director Woody Allen for a promotional clip titled: "Let's Fall in Love Again."

Roll says the Paris tourism bureau has no immediate plans for a new charm offensive, although some Paris hotels are offering fixed euro-to-dollar rates.

But worries about the falloff of American tourism can be seen elsewhere in Europe. In Ireland, the tourism ministry announced it had earmarked an extra 4.8 million euros to market the island's attractions in North America. The Irish Hotels' Federation is also promoting a price discount.

Meanwhile in Amsterdam, Dutch currency outlets are turning away tourists trying to exchange their dollars, fearing to be caught with a loss as the currency continues its breathtaking fall.

In Paris, Americans who are paid in dollars are also hurting. That includes Eleanor Beardsley, the correspondent for National Public Radio, the American public radio channel.

"It is getting so bad I do not even look at the exchange rate every day. I do not go shopping anymore for clothes," she said. "It is just depressing. Every time you look at your bank statement on line - I might withdraw 300 (euros), that is $500. It is just completely depressing and I do not see any end in sight."

But American companies operating in Paris have been less affected by the dollar's decline, according to Oliver Griffith, managing director of the American Chamber of Commerce. Many of them hire Europeans, not Americans, who are paid in euros - not dollars.

"American companies that invest in France have not declined that drastically," he explained. "Because a lot of the companies are multinational. They have assets in dollars, euros, all over the place. They get some inputs in euro-denominated countries, others in dollar-denominated countries."

Others are profiting from the slump. Griffith says French investment in the United States has climbed sharply during the past two years - and America exporters are eyeing new opportunities furnished by a cheaper dollar.

Even when it comes to tourism, Roll of the Paris office is pragmatic. Paris has seen a surge of Russian, Chinese and other foreign visitors who have recently made up for the drop in American ones. Even the drop in U.S. visitors, he says, is just part of the cycle.