Weak Dollar Lets Foreign Tourists Spend Big in D.C.
Monday, June 16, 2008
When the Turkish tourists arrived at their chic Foggy Bottom hotel with empty suitcases and a few hours of free time, the first thing they asked was how to get to Pentagon City. Twenty-four hours later, they headed back to the airport, their luggage bulging with bargains.
A Scandinavian journalist, on each of his three trips to Washington this year, made a similar beeline for Trader Joe's to stock up on cashews and other treats that are cheaper in the United States.
International travel agents are increasingly on the prowl for VIP accommodations and special experiences to sell to clients. Some hoteliers are responding with private rooftop dinners overlooking the White House, back-of-the-house visits to Smithsonian museums and limousine tours of Virginia's wine country.
If there is a silver lining to the battered U.S. economy, the hotel and hospitality crowd may have found it. International travel to the United States -- increasingly with a high-end flavor -- appears to be on the rise. Foreign tourists typically spend two or three times what Americans do on U.S. vacations, and the weak dollar creates an incentive to splurge even more. For gateway cities such as Washington, New York and Orlando, international tourism may not be completely negating the effects of the domestic downturn, but it is softening the economic blow.
One of the ways the hotel industry hopes to weather the slowing economy is by maximizing revenues from foreign travelers, Marriott International chief executive Bill Marriott said in an MSNBC interview last week during a hospitality industry investment conference at New York University.
"There's a whole new bunch of travelers over there, China, India . . . Russia," Marriott said.
The number of international visitors to the United States increased 15 percent in the first three months of this year from 2007, and rose by 7.2 percent in the District, according to the Commerce Department. From January through April, the number of international passengers arriving at Reagan National or Washington Dulles International airports increased nearly 11 percent, to 1.8 million, from last year, according to the Metropolitan Washington Airports Authority.
The mid-Atlantic continues to be the top U.S. destination for overseas travelers, according to the International Trade Administration, a federal agency that tracks tourism and travel trends.
The D.C. region's challenge, some tour operators say, is living up to the expectations of leisure travelers who might choose it over more luxury-oriented and expensive destinations such as Dubai or Paris.
"Many of our members are now looking at U.S. East Coast destinations such as Washington, D.C. as a great alternative option to European city break destinations for their long weekend trips," said Zia Bapuji, London regional manager for TenLifestyle Management, a membership-based concierge vacation service. Within the U.S. markets, "not only are they looking for higher grades of hotels, but within these high-end hotels they are also looking for upgraded room types."
A recent report by the Ernst & Young Global Real Estate Center projected that this boom in high-end international tourism could produce a nearly 6 percent increase in revenue per available room, a standard metric for room rates and occupancy growth in the hotel industry. Hotels are reaching out to wealthy travelers with offers such as Marriott and Renaissance hotels' "Passport to New York City, Boston and Washington D.C." It includes "personalized concierge services . . . and a new, 21-inch wheeled American Tourister suitcase delivered to your room and ready to be filled with purchases from the many world-class shopping destinations in the city of your choice," the promotion says.
The Ritz-Carlton in Georgetown has seen reservations for international travelers more than double this year, hotel officials said, with most of the increase coming from Britain. At the Willard Hotel, where the clientele is mostly business travelers, concierges are booking more docents for private tours and hiring limousines for shoppers, who return to the hotel laden down with bags from Neiman Marcus, Tiffany's, Bloomingdale's and Apple stores.
Aaron Gillespie, director of sales and marketing for the Melrose Hotel, an upscale hotel in Foggy Bottom with rooms that run from $189 to $429 per night, began focusing last year on increasing international leisure clientele. The effort has benefited from the introduction of new direct airline service between Dulles and Qatar, Beijing, Seoul, Dublin, Doha, Rio de Janeiro and Madrid.
"They're going for higher-quality experiences, not necessarily extended stays, and their spending is usually quadruple the amount American tourists will spend," Gillespie said
A group of 10 visitors from Turkey recently arrived with extra empty suitcases and asked him for shopping suggestions. He directed them to several locations and gave them instructions on how to get there by Metro. They chose taxis instead. "Price was not an issue," he said.
German tourists, for whom the United States is the No. 1 vacation destination, are increasingly booking through travel agencies and concierge services, according to Klaus Henschel, managing director of Lufthansa City Center, one of the leading German travel agencies. The Washington region in particular has been a beneficiary, Henschel said in an e-mail, because of its driving distance to so many attractions.
"Our clients love to take a car and go on the scenic byways to experience the country even when the fuel prices now show $4.50 per gallon," Henschel wrote, "which is, by the way, still half the price Europeans have to pay for gasoline."