L.A. jumps up to world’s 8th most expensive city for travelers and expats, study says

Los Angeles is now the eighth most expensive city in the world for tourists and foreign businesspeople, a study released Thursday said, as a rising U.S. dollar has pushed the City of Angels ahead of pricey metropolises including Tokyo and Shanghai.

L.A. — which ranked 27th last year — is now only slightly cheaper than New York, which ranked 7th on the list of 133 cities compiled by the Economist Intelligence Unit. Singapore remains the world’s most expensive place for visitors and expats, followed by Zurich, Hong Kong, Geneva, Paris and London. The three cheapest cities were Lusaka, Zambia; Bangalore, India; and Mumbai.

The Worldwide Cost of Living survey, which has been conducted for more than 30 years, looks at prices of 400 goods and services, though it does not include the cost of accommodations.

Simon Baptist, chief economist at EIU, said in an interview that for Angelenos, the cost of goods and services in fact is not rising much because inflation has remained relatively low. But the sharp appreciation of the dollar against many other currencies since mid-2014 is making many American cities relatively more expensive for foreigners. And that could cut into the number of tourists coming to Southern California and curb their appetite for purchases.


“We know that international tourist arrival [numbers] are quite sensitive to this,” said Baptist. “They are less likely to come to the U.S., and those that do are likely to spend less.”

Los Angeles welcomed a record 6.7 million foreign visitors last year, up 3.4% over 2014, and they spent $6.4 billion, the city said.

Mexico, China, Canada, Australia and the United Kingdom were the top sources of overseas visitors. While Mexico supplies the most foreign tourists, China’s numbers are growing the fastest of any country, up more than 13% last year to 779,000.

Business travel, Baptist said, is less susceptible to fluctuations in exchange rates. “It’s less responsive to prices, and while the U.S. is expensive to travel to, there’s still lots of business to be done there,” said Baptist, who is based in Singapore.

While that may be bad news for some Southern California hotels, restaurants and tourist attractions, it’s good news for Americans looking to travel overseas for work or pleasure. “For U.S. companies, the costs now of hiring or sending workers overseas has gone down substantially,” said Baptist. “We might see U.S. companies sending more staff overseas because they are going to find it a lot cheaper to fund expat packages than in the past.”

Other U.S. cities in the EIU’s top 50 included Chicago (21st), Minneapolis (24th), Washington (26th), Houston (31st), and San Francisco (34th), which rose 25 spots from the 2015 survey.

While San Francisco’s relatively low ranking compared to L.A. may surprise many Californians, Baptist said a number of goods and services covered by the study were substantially pricier in Southern California than in the Bay Area, including wine, rice, clothing, dining, gasoline and insurance for luxury cars.

“That’s not to say San Francisco is a super cheap city,” said Baptist. “Bread in San Francisco is more expensive than in L.A., as is milk and cigarettes.”


Although accommodations were not included in the data used to compile the rankings, EIU found that the cost of a high-end, furnished two-bedroom apartment was nearly identical in L.A. and San Francisco — about $5,400 per month.

Chinese cities also climbed up the ranks of expensive places in this year’s survey — even though the Chinese currency, the renminbi, has dropped about 8% against the U.S dollar since last summer. Chinese cities moved up an average of 13 positions, and according to EIU, Shanghai is now as expensive as Tokyo, which was the world’s most expensive city for most of the last 20 years.

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Seoul, which was ranked 36th five years ago, has also gotten significantly more expensive and jumped into the top 10 this year, with prices comparable to L.A. and Copenhagen. Seoul is the most expensive city for everyday food items, EIU said. An average loaf of bread costs $12.44 in the South Korean capital, EIU found, compared to $5.72 in Los Angeles.


The cities with the biggest moves down the EIU charts in the past year included Sao Paulo and Rio de Janeiro in Brazil, Moscow and St. Petersburg in Russia, and Bogota, Colombia. Rio is now half as cheap as New York — which should be welcome news to the nearly half-million people expected to travel to the 2016 Summer Olympics in the Brazilian city.

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