Will it be cheaper to travel in 2020? A lot depends on exchange rates
The fluctuation of the currency’s value has become a norm for most major economies, and this is following the status of the foreign exchange market. The factors that influence the currency rates include economic performance, rate differentials, inflation, and supply and demand between two currencies.
Currency depreciation and appreciation can have a massive impact on the daily lives of people—no wonder why fluctuations in currency exchange play a crucial role in the tourism and travel industry. This article might seem less travel oriented, but in fact it has a lot to do with traveling itself.
If you want a unique and more strategic look at the travel and tourism industry, you have to dig deeper into the exchange rates. Forecasts for the Aussie dollar in 2020 are saying that the currency will slightly go up; this and other data related to exchange rates from other countries can impact travel and tourism not only in Australia, but in the global economy. In recent years, the strengthening of the US dollar against most other economies has become the most notable trend. These data will give you an idea of whether planning a trip for next year is a good move for you or not.
Discover more about how the exchange rates can affect the travel industry in 2020 below.
The travel industry will become unstable due to rapid fluctuations in currency exchange rates
Currency volatilities are expected to continue to take place in different countries around the world, and this could heavily hit the travel industry. A volatile market would make the travel industry unstable for people who plan their holiday trips over a period of time.
Traveling is going to be too expensive to afford for a significant number of individuals. And since economic factors are beyond the control of governments, some countries will be less ideal for visiting than others. That said, travelers have to do their homework to research and understand the current situation of the market of a particular region before making any decision and packing for their dream holiday.
Downward progression of the currency value makes travel more affordable
Many sectors don’t welcome currency depreciation with open arms, and it’s understandable since it affects international trade and exchange, and also causes a rise in the cost of living, among others.
However, local tourism will benefit from currency depreciation as it would mean affordable accommodation, travel, and other travel-related expenses for international tourists. A more affordable travel and tourism industry is one of the few upsides of a currency value that’s progressing downward in the face of its ill effects. If you’re planning to travel in 2020, currency depreciation is one excellent indication that you’ll have an affordable trip to your destination, so keep an eye out for it.
For instance, due to the depreciation of the Australian dollar in 2017 against its US counterpart, 9 million tourists entered Australia, which is a record-high during that time. That said, Australian and international tourists alike need to compare exchange rates against other countries before deciding where to go in 2020.
The impact of currency appreciation
Once international travelers reach their destination, they have to convert their money to their destination country’s currency so they can have funds to spend on restaurants, hotels, and other tourist attractions.
When, say, the Australian dollar appreciates against other world currencies, traveling to other countries would become more enjoyable and affordable for Australian tourists since the exchange rate is going to favor them when they convert their funds. When currency appreciation happens in a particular country, more travelers from that country will likely take advantage of their substantial currency value to visit other places for sun, sea, sand, and various exotic attractions. Conversely, Australia will see a decreased number of foreign tourists booking flights and hotels in the country.
It’s clear that exchange rates have a significant impact on the tourism economy of different countries. While many other factors may affect the affordability of travel in 2020, there’s no doubt about the currency exchange rates having a place in determining the growth and sustainability of the travel and tourism sector of each country. For travelers, it would be an ideal decision to track, monitor, and predict the movements of exchange rates, and respond accordingly.
So, when you’re planning your holiday trip for 2020, make sure to take a look at the trends of currency exchange, both abroad and in your home country. This is the perfect way to understand the expenses you’re likely to have while on vacation. Of course, one thing that you shouldn’t forget is that if your country is experiencing currency appreciation, look for destinations that are showing signs of currency depreciation for your 2020 travel to become cheaper.