Currency Shifts: Weak Dollar Helps, Hurts

For Americans exhibiting in or attending foreign tradeshows, the weakest U.S. dollar in decades is a double-edged sword. It means steep airfares, hotel rates, registration fees and shipping bills. On the other hand, most U.S. products are more accessible and affordable to foreigners than they've ever been, so exhibiting overseas could be worth it.

It also is a tough call for association meeting participants thinking of extending their contacts overseas, because they don't necessarily have products to sell. Of course, they also don't have booths or products to transport.

Michael Payne, executive vice president of SmithBucklin, said the plight of the U.S. dollar is complicated right now because it is entwined with the quickly rising cost of fuel, airline capacity cuts and other issues for meeting attendees and planners. Still, the dollar is a good yardstick for meeting attendees traveling in and out of the United States.

Payne said, “People coming to the U.S. are benefiting in buying power when currencies like the British pound are worth about twice what the dollar is, and the euro is worth about $1.65.”

He added, “I'm just surprised that more people aren't coming here, even though travel to other destinations in the world is increasing. Meeting attendance here should be higher than it is.”

One reason, Payne said, is the continuing difficulty foreigners have obtaining U.S. visas.

He noted that some American cities, such as New York and Houston, have seen an increase in foreign visitors while others, such as Orlando, have seen a downturn.

Some U.S. meeting business still is going overseas, despite the dollar's performance.

“Association meetings don't tend to get canceled,” Payne said. “On the other hand, corporations may send fewer of their employees.”

He noted that on a recent trip to France, he paid $8 for a bottle of water.

“Europe is pricing itself out of the incentive market,” Payne said, “and that business is growing even more for Canada, Mexico and the Caribbean.”

In an attempt to lure American visitors, some overseas destinations – but not all – are cutting prices. In Beijing, most five-star hotels are sold out for the upcoming Summer Olympics but, as of press time, others still had vacancies. In Europe, hotels and restaurants are discounting prices even more.

Airline capacity is another important issue affecting attendance at meetings both in the U.S. and overseas. Payne said it will become even more of a problem once the summer travel season ends and airlines begin making the drastic cuts in flights they've already announced.

What's the solution?

Along with his other responsibilities at SmithBucklin, Payne is president of the Intl. Assn. of Airport Duty Free Stores, which brings attendees from 60 countries to its annual IAADFS/Duty Free Show of the Americas, held in Fort Lauderdale, Fla.

“I will refocus on the value of coming to our show,” he said. “There are real cost-effective reasons to come in terms of seeing 1,000 buyers in three days, networking and business opportunities.”

Carol Fojtik, a senior vice president at Hall-Erickson who organizes both meetings and tradeshows, agreed the exchange rate should be making this a great time for overseas participation in U.S. events.

“However, there are a few concerns preventing soaring numbers in international attendance,” she said. “Visas allowing entry to the U.S. are not easy to obtain in some countries, and international participants are finding it difficult to sell to U.S. companies because the exchange rate makes purchases from overseas cost-prohibitive right now.”

Still, some overseas firms do view the present circumstances as a once-in-a-lifetime, cost-effective marketing opportunity for them. What they invest now may help them develop the relationships that will result in sales later when the economic climate for American buyers improves, Fojtik said.

For their part, Americans are being very picky about what international events they attend and to what extent they take part, she added. Americans going overseas are finding the exchange rate is choking their ability to have a large presence – if any.

Robert Dallmeyer, president of RD Intl., has worked for several years with U.S. exhibitors interested in seeing their products and services on display in European shows.

“I see the current euro-dollar conversion as a big plus for American meeting and conference planners, as well as exhibition organizers,” Dallmeyer said. “Now is the time to grow European participation in all of our North American events.”

As for potential U.S. participants in overseas events, he recommended a philosophical approach. “Nothing is forever,” Dallmeyer said. “I've seen so many exchange rate fluctuations over the years. This, too, will pass.”

Meanwhile, he suggested alternatives: trains and discount airlines rather than the more familiar legacy airlines, three-star hotels instead of four-star ones and, he added, be sensible.“If a mocha latte at Starbucks in Los Angeles costs $3.50, it's going to cost $3.50 in Brussels (Belgium) or Geneva,” Dallmeyer said. “You can treat yourself and pay the additional 50 percent or deny yourself by getting a black coffee.”

Peter W. Nathan, president of PWN Exhibicon Intl., who specialized in producing standalone meetings and exhibitions in overseas locations, said the weak dollar also has played a significant role in reducing U.S. visitors attending events.

“On the other hand, foreign visitors coming to our shores to attend conferences and seminars have the advantage of the exchange rate,” he said. “As it is, those that are able to secure visas have a jolly good time attending events at a much-reduced cost.”