Vacations in Europe have a new attraction: The euro's steep drop in value is making the continent much cheaper for tourists from across the world, especially the United States and China.
For American tourists, the dollar's strength translates into a discount of around 25% compared with this time last year. China's currency has risen some 20% against the euro over the last year.
And Eurozone residents feeling the pinch from their sluggish economies are more likely to stay inside the bloc, where they won't feel the currency changes.
That means the ingredients are in place for "a great year for tourism" in Europe, said Nick Greenfield, head of tour operator relations at the European Tour Operators Assn. in London.
The euro has fallen against many currencies in recent times, but its drop has been particularly pronounced against the dollar. The euro was trading at $1.057 on Wednesday, having been as high as $1.40 a year ago. Tim Cooper, a global economist at BMI Research in London, said his company expects the euro and dollar to reach parity this year.
The European Central Bank's policies have been weakening the euro, while those of the U.S. Federal Reserve have been bolstering the dollar. The euro has also been dragged down by fears over Greece's debts and the bloc's muted economic growth.
U.S. bookings to some European countries have risen as much as 20% so far, European tourism officials and American travel companies report.
Lyssandros Tsilidis, president of the Hellenic Assn. of Travel and Tourist Agents, said Greece has seen a 15% to 20% increase in reservations from the U.S. — Europe's biggest long-haul market — compared with the same time last year. Spain saw a 12% increase in January and almost 19% in February. Officials anticipate more growth, which they attribute to the dollar's strength.
The exchange rate "certainly makes things easier to enjoy," said Bob Homeyer, a retired businessman from San Diego on vacation in Madrid with his wife. "We have had some fine meals for what worked out to be reasonable prices, and our visit to the Prado Museum worked out at 7 euros ($7.48) each, which is a real bargain," he said outside the Madrid landmark.
Among individual cities, Paris is a top attraction, pulling some 10 million Americans tourists last year. Officials hope to make it 11 million this year — and "encourage them to spend more" while the exchange rate is favorable, said Francois Navarro, general manager of the city's tourism committee.
If trends hold, Navarro said, Americans could well return this year to the top spot among foreign tourists in the Paris area for the first time in about a decade. "It'll be a big deal," he said.
But a new generation of Chinese tourists is shaking up Paris' forecasts, Navarro said. They're aged 25 to 40, travel alone and spend on high-end hotels and restaurants, unlike the previous generation that wanted mainly to shop. And a Chinese visitor spends four times as much on average as an American.
The U.S. is also the biggest source of tourists for Rome, which recorded a 7% increase in American visitors in January, the latest figures available, compared with the same month last year.
U.S. tour company Liberty Travel said its New York City outlets are reporting a year-on-year 17% jump in bookings to Europe. That includes marked growth in travel to usually less-visited European cities, including Dublin, Amsterdam, Barcelona, Madrid and Athens, the company said.
Vacationers have a broad variety of options to choose from: The Eurozone encompasses countries from Portugal to Finland and from Greece to Ireland.
Europe is now competing for American business with popular U.S. destinations, said Joseph A. Moscone, Booking.com's senior manager for public relations in the Americas.
The company compared room prices this year in Paris, Rome, Barcelona, Amsterdam and Berlin with last year's prices, using the euro-dollar exchange rate last month and in March 2014. It concluded that the average price in U.S. dollars for a night in a four-star hotel in those cities is down 21%, and down 17% for five-star accommodation.
That means, Booking.com calculates, that for the price of seven days in Palm Springs, an American could spend 14 days in Barcelona.
Vacations in Europe are "not only affordable, but even a relatively inexpensive option in comparison to some pricier U.S. destinations," Moscone said.