Steve Quayle News Alerts

June 30, 2003
By Wayne T. Price, FLORIDA TODAY

As far as U.S. currency goes these days, the George Washington has been treated more like the George Costanza.

Not that there's anything wrong with that, some economists and business operators maintain.

A low-valued dollar -- as compared with some other currencies -- should be a plus for areas like Brevard County that typically enjoy a fair number of European tourists who come here to enjoy the sunshine, the beaches, the natural scenery and attractions like Kennedy Space Center.

On the downside, it means U.S. consumers and businesses pay more for imports like French wine, BMW cars and European furniture, though economists said some foreign businesses are reluctant to raise prices for fear of depressing sales.

But foreign tourists packing more U.S. spending punch, after exchanging their euros or pounds for dollars, ideally should be ringing up more sales at places like Ron Jon Surf Shop, Merritt Square mall or the KSC Visitor Complex gift shop.

But here's the rub: With local tourism remaining flat -- some would say a slump -- local officials just aren't seeing large numbers of foreign visitors pouring into the area to take advantage of the economic benefit that a low U.S. dollar presents.

And domestic travelers aren't picking up the slack, either. According to the Brevard County Tourist Development Council, the number of visitors to the Space Coast, through May, was running about 2 percent behind last year. That's troubling for the local economy, since tourism is one of the region's key industries.

At the KSC Visitor Complex, for example, attendance is down about 10 percent from a year ago, said Dan LeBlanc, chief operating officer of Delaware North Parks Services of Spaceport, which operates the venue, the county's most-popular paid tourist attraction.

LeBlanc said that, "in a better day," 40 percent of the Visitor Complex attendance would have come from international visitors, with German and United Kingdom tourists making up more than half that.

"They're just not coming here," LeBlanc said, blaming a reluctance to travel on fears about terrorism and Severe Acute Respiratory Syndrome, or SARS, and travelers preferring to stay closer to home.

"I never thought that 2003 could be worse than 2002," LeBlanc said.

Janice Greene, president of Crown Resorts in Cocoa Beach, said her international business has slowed, but there hasn't been a huge drop in reservations by foreign travelers.

Greene, a native of Wales who frequently speaks with European tourism officials about vacation trends, said British travelers -- despite the favorable exchange rate -- are taking advantage of vacation bargains in Europe, instead of the United States. That's because of fears associated with travel to the United States and also because of the extra security they must go through at airports.

British travelers typically book their vacations six monthsSee Dollar, 2ADollar, From 1Ato eight months in advance. Now, it's more like three weeks to four weeks, she said.

"There's a lot of late travel going on," Greene said.

Some tourism

Currency woes certainly shouldn't be an impediment.

As of Friday, value of the euro -- the currency of much of Europe -- against the dollar was about 16 percent higher than a year ago. The British pound was about 9 percent higher, and the Canadian dollar was up about 12 percent. That means residents of Europe and Canada are getting more for their money in the United States.

And if the foreign tourism business is lackluster, it's not showing up everywhere.

Ron Jon President Edward Moriarty, reviewing sales by ZIP codes earlier this month, said most of the Cocoa Beach store's transactions were from people living in Cocoa Beach.

Second were "other nations," Moriarty said.

"Sales from foreign visitors are higher for this period of time than normal," he said. "I think we're a better value than we were a year ago and even two years ago. In the tourist industry, I think anybody would tell you either the economy, or the value of the dollar, is very persuasive to visiting the United States."

For those foreign tourists that are coming here, the deals are astounding, said Barbara Steer, who is staying in Cocoa Beach with her husband, Windsor.

The Steers live in Cardiff, South Wales, and they try to visit the United States twice a year.

"The dollar is very good at the moment for us," Steer said. "And I'm afraid we do spend more -- a lot more. Particularly on clothes. The clothes here are so fantastic that I have to buy another suitcase to take everything home with me."

On the non-tourism side, the dollar's weakened position against European currencies seems to be having a mixed effect.

Costs are higher

Sandra Orr, president of Imported Industrials Unlimited Inc., a Melbourne-based company, has seen her costs rise about 30 percent.

That's because the industrial springs she imports from Europe -- mostly Germany -- for use in medical equipment now cost more.

Orr, a former Melbourne resident who runs her one-person company out of her Virginia home, said she can't pass the higher costs onto her customers because they easily could go to her competitors.

"I've been eating the cost increase," Orr said.

It's the same story with Bill Connor, owner of Danish Interiors in Indialantic. Connor sells imported furniture pieces ranging from $100 to a few thousand dollars. Some of the furniture that he purchases for his store has risen in price, and he has also noticed his overseas buying trips have become more expensive.

"We haven't raised our prices yet, but we might," Connor said.

Even though international tourism is anemic, European investors see plenty of investment opportunities in Brevard County, said Bob Bickford, an international lawyer based in Melbourne.

Foreign investors

Equities in Europe are in about the same volatile shape as they are in the United States, Bickford said. That means European investors are looking at putting their money into stable venues, like real estate, instead of stocks.

But there's a problem.

"Property in Europe is extremely expensive," Bickford said, noting that a $100,000 home in the United States would sell for closer to $300,000 in some places in Europe.

Those foreign investors have discovered Brevard's hot housing market as a desirable investment opportunity.

"There have been a number of clients that we have from France and Germany that are buying real estate here in Brevard County," Bickford said. "A lot of it is residential housing and they're buying two or three houses at a pop."

Canadians lead

At KSC Visitor Complex LeBlanc is holding out hope that the deals presented by the dollar's valuation against the other currencies eventually will be too hard to resist.

He believes Canadians will lead the charge and the Europeans will follow.

"If the exchange rates stay the way they are now, and I have no reason to think they won't," LeBlanc said, "then, come fall, and into next year, international tourism will start to come back."

Steer, who recently enjoyed meals at Bernard's Surf and Durango Steakhouse, said she and her husband aren't afraid to travel -- "We went through the war you know. Nothing scares us." -- and they feel like they are scoring some great U.S. bargains.

"It's so inexpensive here, compared to back home," Steer said.

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