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 user 2006-12-04 at 10:42:00 am Views: 37
  • #16954

    Shopping as the Dollar Drops
    A hot destination for European travelers this winter: Minnesota.
    a Holiday Inn near the Mall of America, the giant shopping center just
    outside Minneapolis, foreign tourists shopped so much this week that
    the hotel had to set aside four guest rooms to hold their suitcases
    after filling up its baggage-storage room.

    Europeans are
    flocking to U.S. stores for Christmas shopping because the dollar’s
    weakness makes the U.S. look like a bargain basement to them. The
    British pound yesterday hit a 14-year high against the dollar, and the
    euro has hovered around historic highs, too.

    With more retailers
    opening globally, it’s easy for Europeans to do a little research to
    find out how much cheaper the U.S. is than their home countries. And
    travel agents, airlines and hotels are marketing heavily to bring
    overseas shoppers to the U.S. in the hope that the lure of a pair of
    Levi’s jeans that costs half what it does in Europe will override
    America’s onerous entry requirements for foreigners.

    this week, only a few hours after her plane landed in New York from
    Edinburgh, Kay Sandeman, a 22-year-old Scot, was at Rockefeller Plaza
    shopping with her mother. She was clasping a photocopied article from a
    U.K. magazine that had tips on where to find bargains in the U.S.
    “Look,” Ms. Sandeman says of the prices. “It’s almost half.”

    York City’s tourist board expects 7.3 million foreign visitors this
    year, up from 4.8 million in 2003, its low point after the Sept. 11,
    2001, terrorist attacks. The biggest single group by far are the
    British, and 95% of them say they go shopping during their visit –
    while only 39% plan to visit a museum, says NYC & Co. The Four
    Seasons Hotel in New York has seen an 18% rise in European guests this
    year. Many Europeans are also upgrading to four- or five-star hotels,
    instead of three-star accommodations, says Lisa Warner, assistant
    marketing manager for Trailfinders, a large travel agency based in

    Some airlines and tour operators are trying
    to stoke demand even more with sales, and say they can afford to
    because they’re passing along savings from a weaker dollar. Since it
    takes fewer pounds to pay for a hotel room, tour operators can lower
    the price they charge Britons in pounds. When British Airways recently
    renegotiated its contracts with a series of U.S. hotels, it cut the
    price of a night in the Lenox Hotel in Boston to £100, from £124. It
    also extended a London-New York pre-Christmas fare of £248 by nearly
    two weeks, a BA spokeswoman says.

    U.S. retailers are advertising
    overseas to grab the attention of Europeans planning their shopping
    trips. The Chelsea Premium Outlets, a chain that includes discount
    outlets in New York, Las Vegas and Chicago, is providing voucher
    booklets to 24 U.K. tour operators, double the number it offered last

    At London’s Heathrow airport yesterday morning, waiting to
    check in for a flight to New York, Donna Sinclair’s sons were planning
    their shopping. Ben, 10, wanted an iPod and Sam, 13, says he wanted
    “some cool trainers” — Britspeak for sneakers — ideally Nike Air.

    exchange rate is brilliant, it’s practically doubling your money,” says
    Ms. Sinclair, 35 years old, from Great Yarmouth. Her husband brought
    only two changes of clothing and one pair of shoes in anticipation of
    his purchases.

    This isn’t the first time Europeans have smelled
    a bargain. Clothing has historically been less expensive in the U.S.,
    and U.S. retailers tend to mark down more items than European stores.

    Morgan, a 49-year-old who lives in England, this week shopped with
    three friends on Fifth Avenue, where they picked up bracelets at
    Tiffany’s, Estee Lauder makeup at Bloomingdale’s and stuffed animals at
    the Disney Store. “It’s like a military operation,” she says. “We know
    how to do this.”

    But they missed out on a new line of jeans
    designed by British celebrity Victoria Beckham, which retail for as
    much as £325 in England but cost about half that in New York.
    Bloomingdale’s had sold out.

    Last Saturday, Patti Lee, the
    general manager of Macy’s Herald Square store in New York, met two
    British women who were shopping and who asked her for directions to a
    particular department. “They each had three or four shopping bags and
    it was their fifth trip” to New York, says Ms. Lee. Macy’s offers
    international visitors a card that offers them an 11% discount, and its
    salespeople are equipped with charts to help foreign visitors convert
    the sizes.

    Travelers returning to Britain from the U.S. are
    supposed to pay import duty and tax on all purchases exceeding £145
    (excluding limited quantities of certain items such as cigarettes and
    liquor). The European Union requires travelers to pay tax on purchases
    exceeding €175. But many don’t bother to declare their purchases.

    pound hit $1.9699 Thursday, a new 14-year high. At 4 p.m. in New York
    trading, the pound stood at $1.9659 while the euro was at $1.3244. Some
    expect the dollar to weaken further, possibly touching $2 to the pound
    on concerns about slowing growth prospects in the U.S. and possibly
    lower U.S. interest rates.

    The weak dollar is stoking demand for
    other services, too. Wendy Lewis, a plastic-surgery consultant, says
    more of her British clients are traveling to the U.S. to take advantage
    of the exchange rate. Ms. Lewis says New York is the No. 1 destination
    for Britons seeking plastic surgery, followed by Boston. “A facelift in
    the U.S. of top, top quality is $15,000 — so that’s half of what it is
    [in the U.K.],” she says.

    Some foreign tourists can afford a
    meal that might be prohibitively expensive at home. Gordon Ramsay, the
    British chef who has several Michelin-star restaurants in London,
    opened a new restaurant in New York this month. His New York outpost
    charges $110 for its seven-course “Menu Prestige,” which includes foie
    gras and apricot soufflé. The “Menu Prestige” at one of Mr. Ramsay’s
    London restaurants costs £110 pounds, or $216 at current exchange rates.

    weak dollar is even encouraging many to make a trip for the
    post-holiday sales. Trailfinders recently launched a three-night
    package to Minneapolis to visit the Mall of America in January (average
    temperature: 12 degrees Fahrenheit). The package costs £399, or $785,
    and includes a direct flight from London and three nights in a
    three-star hotel.

    The Mall of America plans to double in size in
    the next four years, and is planning to add more luxury shops and a day
    spa to appeal to European travelers, who spend more than twice what
    local shoppers do. About 6% of the Mall’s 40 million visitors a year
    are from overseas, and its executives hope to double that percentage,
    says Doug Killian, associate director of tourism for the mall.

    von Braun, a mother of two from Bonn, Germany, recently went on a
    shopping spree at the mall. She bought a corduroy shirt and a pair of
    sand-colored corduroy children’s pants at Gap. For the price of the
    pants, $17, “you can’t even get a T-shirt in Europe,” says Ms. von
    Braun, who also bought some pieces by fashion brand Juicy Couture for
    her neighbor. “Juicy Couture is prohibitively expensive back home.”