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Never Mind The Ugly Americans (Int'l Edition)


International -- Intl' Business: EUROPE

NEVER MIND THE UGLY AMERICANS (int'l edition)

Laden with overstuffed shopping bags from Ferragamo, an upscale shoe shop, Yumi Yamada, 27, stands happily surveying her purchases near Rome's ritzy Via Condotti. A Tokyo-based stewardess, Yamada headed straight to Rome this summer after hearing about how the sinking lira has made Italy a shopper's dream. "Things are cheaper now. My favorite thing about Italy is the shopping," Yamada says.

Yamada isn't alone in appreciating the benefits of weak currencies. In fact, this summer's price-sensitive vacationers have helped boost tourism to post-gulf-war records in Britain, Spain, and Italy, where currencies have slumped against the yen and the German mark this year. Even though business is flat in France and Germany, the European tourism industry overall is thriving. Airlines are reporting record numbers of passengers. Hotel occupancy is up 5% across Europe. The number of overseas visitors is set to surpass even last year's record of close to 20 million, says Robert A. Hollier, executive director of the European Travel Commission.

Currency is just one reason for Europe's tourist boom. Another is new wealth in emerging markets in Asia and Eastern Europe. As disposable incomes rise in countries ranging from South Korea and Taiwan to Russia, travelers are heading west. Rich Russians are plunking down cash to buy houses on the Costa del Sol. Tour groups from Indonesia, Korea, Taiwan, and Malaysia hustle to catch a glimpse of Big Ben and Versailles.

"BUY, BUY, BUY." And Eastern Europeans are swarming the Adriatic beaches. "They arrive by the busload, stay in luxury hotels. They eat, they drink, and they buy, buy, buy," says Gianfranco Donati of the Rimini Tourist Agency. An estimated half million Russians and Eastern Europeans have come to Adriatic coastal towns so far this year, a jump of about 300% over last year.

Europe needs to attract travelers from Asia and the former Soviet bloc to keep its industry growing. As tourists from the U.S., Japan, and other developed countries head for more exotic destinations in Asia and Latin America, Europe's share of the world tourism business is shrinking. Its $150 billion in tourism revenues last year was 47% of the world total, down from 53% five years ago.

Most of Europe's growth will come from Asia, industry sources believe. More than 800,000 non-Japanese Asians came to Europe last year. While the numbers don't yet rival the crowds from Japan, which dispatched 1.6 million visitors to Europe in 1994, they are growing in the double digits. With airline departures worldwide from Asia already increasing 15% a year, "the growth potential is enormous," says Linda Tuttiett, head of the Asia Pacific Dept. at the British Tourist Authority.

Business from Korea is especially strong. When restrictions on travel and foreign currency export were eased in the late 1980s, Koreans initially jetted off to nearby Asian destinations such as Thailand and Japan. Now, they are heading to Europe. "It took Koreans a little while to open their minds to Europe," says the Reverend Kim Ji Yoon, 28, as she races through the British Museum with a Korean tour group.

COATS AND ROCKS. The number of Koreans visiting Europe will grow some 30% this year, to 320,000, according to Korean Airlines Co. Many come on 10-day, five-city whirlwind tours. And they spend. They buy Burberry coats in London, cosmetics in France, and even diamonds in Amsterdam. In Britain last year, they spent $1,035 per visit, less than the Japanese but more than most Americans. "Korea is following the same pattern as Japan, only 10 years later," says ETC's Hollier. "Korea could well be the source of the next big boom."

The Chinese will be close behind. China sent 40,000 visitors to Europe last year. Their numbers are expected to rise 18% a year until at least 2000, as the Chinese middle class grows and the government further eases travel restrictions.

To lure more Asians to their countries, European airlines and tourist agencies are stepping up their marketing in the region. The British Tourist Authority now spends the largest chunk of its marketing budget in Asia. The Dorchester hotel in London's fashionable Mayfair district has boosted its promotional trips to Jakarta, Hong Kong, and Singapore. And France's tourist board recently opened a new office in Taipei.

Their goal is to attract more tourists such as South Korean's Mi Ji Lee, 32. Soaking up the ambience near Rome's Trevi Fountain, she says: "This is my first trip to Europe. For all the beautiful paintings and sculptures I've seen, it's worth the price." The airlines, hotels, and tour operators hope she'll come back for more. By Heidi Dawley in London, with Christina Bennett in Rome and bureau reports


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