New York City’s tourism industry got crushed by the dollar over the holidays.
The latest Beige Book report from the Federal Reserve showed that tourism spending in New York City was down sharply around the holidays.
“Retailers report a sluggish holiday season, with spending flat to down moderately from 2014 levels,” the report said.
“One major retail chain indicates that December sales in the region came in below plan and below 2014 levels, with particular weakness in New York City attributed to weak tourism spending … Tourism activity, which was fairly sluggish in the prior report, has weakened further. In New York City, revenue at both hotels and Broadway theatres were down noticeably from a year earlier, particularly towards the end of December.
The Beige Book is a report compiled by the Fed full of economic anecdotes from each of the Fed’s 12 districts.
Over the last year the US dollar has been on a tear against other major currencies, rising about 25% in value. The pass-through from financial markets to the impact a tourist exchanging their local currency cash for dollars is going to be on a bit of a lag, hence the late-year impact into the holidays.
And while the dollar’s appreciation has been good news for Americans travelling abroad, it makes visiting the US from abroad less attractive as local currency gets converted to fewer dollars.
New York City saw a record 56.4 million visitors in 2014, but it seems that towards the end of last year this cooled off a bit.