European Vacation After staying around 1.35 US dollars per Euro for years, the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014 . What affect does this have on tourism in Europe?
The demand for European vacations by Americans will increase because it takes fewer dollars to convert into a given number of euros. Likewise, Europeans considering coming to the US now have to convert more euros into dollars if they wish to visit the US. Some will opt to stay in Europe instead. Both effects increase the demand for hotels in Europe during holidays. Since supply of hotels is relatively fixed, this increases the hotel rates expressed in euros.
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