Explore tens of thousands of sets crafted by our community.
Tourism and Exchange Rate Fluctuations
8
Flashcards
0/8
Definition of Exchange Rate
The value of one currency for the purpose of conversion to another. It affects tourism by influencing how much tourists spend abroad.
Purchasing Power Parity (PPP) and Tourism
PPP theory suggests countries' currencies should have the same purchasing power over identical goods. Exchange rates can affect tourists' perception of a destination being 'cheap' or 'expensive'.
Impact of a Strong Domestic Currency
When the domestic currency is strong, tourists find it cheaper to travel abroad as their money buys more foreign currency.
Impact of a Weak Domestic Currency
A weak domestic currency makes it more expensive for residents to travel abroad, possibly deterring them from international trips.
Exchange Rate Volatility and Tourism
High fluctuation in exchange rates can create uncertainty for tourists, potentially affecting their travel decisions and timing.
Currency Depreciation and Inbound Tourism
When a country's currency depreciates, it becomes more affordable for foreign tourists, possibly increasing inbound tourism.
Currency Appreciation and Inbound Tourism
If a country's currency appreciates, it can become more expensive for visitors, potentially reducing the inflow of tourists.
Hedging Exchange Rate Risk in Tourism
Travel companies and tourists may use financial instruments to lock in exchange rates, minimizing the risk of currency value changes affecting tourism costs.
© Hypatia.Tech. 2024 All rights reserved.
