When I started at CNBC in 2001, the Australian dollar got down to 48 U.S. cents. It was fondly known as the "Aussie Peso." As you might imagine, going to the U.S. on a vacation was a pricey affair for foreign tourists. My parents visited New York that year and stayed in a dive off Times Square because it was affordable. Yes, it might have been in the heart of the action, but probably also had a questionable clientele coming and going at all hours of the night.
By contrast, for a few years between 2011 and 2013, the Australian dollar was so strong – more than one American dollar – that Waikiki Beach was chock-full of Aussie accents cutting through the tropical air like glass: "Wayne, you forgot your thongs!"*
Rapid dollar strengthening during the financial crisis in 2008 caused all manner of problems around the world, the least of which were the concerns of tourists, but now as the dollar is going through another period of marked muscle-gaining, I wonder how much international tourists will decide that the good ole US of A is not their vacation destination of choice for now.
And it's not just travel. Shares of some U.S. companies that normally benefit from foreign shoppers are hurting: Tiffany & Co is down 20% over the past 3 months. Ralph Lauren is down 27%.
But because I like to think glass-half-full, here's the silver lining: if you've had enough of scraping ice off your windshield and are daydreaming about sipping Mai Tais by the pool, your stronger dollar may mean a better deal at domestic resorts. Why? If foreign tourists stay away from US resorts, and more Americans instead go overseas armed with their almighty bucks, resorts here at home may cut prices to lure you in. At least, that's what I'm hoping!
*(Thongs in Aussie are flip-flops!)