Mia Taylor
Last updated: Thursday, July 18, 2024 at 3:45 PM
The tourism-related trade deficit between the United States and Europe is at its highest in more than 20 years.
Cash-rich Americans are flocking to continental Europe in droves, driving the tourism trade deficit to $27.3 billion in 2023, Reuters reported, citing data from the Bureau of Economic Analysis.
This is the largest travel deficit between the US and Europe since the 2000s and is 66% higher than the 2022 travel deficit between the two regions just a year ago.
This news comes after decades of balanced relative tourism trade balances between the United States and Europe. Moreover, in 1999, the United States had a tourism trade surplus of $1.4 billion, meaning that Europeans spent more on U.S. travel in Europe than Americans did.
Reuters reported that the deficit is likely caused by a variety of factors, including a strong dollar and higher prices for goods and services in the U.S. Prices for things like hotels and restaurants are all cheaper across Europe.
But the news outlet argues that the strong dollar is only part of the reason for the widening deficit in foreign tourists to the US: With the US economy doing well, Americans have plenty of money to spend, which means there are more American tourists heading to Europe for vacation than Europeans visiting the US.
This reality created a tourism trade deficit of 7 million people last year, the largest deficit since 2012, according to the National Travel and Tourism Bureau.
American tourists to Europe are helping to boost the continent’s economy, and real estate data provider CoStar predicts that the average nightly rate for a hotel in Italy will rise 42% between 2019 and May 2024 to $210, Reuters reported.
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