Please note that this analysis, based on headlines from Thursday and early Friday, is intended to provide examples. In a volatile market, there may have been shifts since the time of writing.
It's no secret. In the past four years, currency values have fluctuated dramatically around the world. While this is naturally of great concern to businesses that operate internationally, for event planners and their clients, currency fluctuations can provide opportunities for considerable savings. Hotels and event venues can take their cue from relative currency strengths about where to concentrate marketing efforts.
Last week, there were a number of significant developments and ground-breaking shifts in currency valuations:
The (US) dollar rose sharply on the results of last meeting of FOMC (Stock Market Review)
After the announcement of the results of published protocol of the FOMC's last meeting the dollar rose sharply against major traded currencies.
Implications: The U.S. dollar gained ground against the British pound, Japanese Yen, and the Euro. It would make sense for companies and associations in the U.S. to plan, conferences, incentive travel and foreign executive retreats in Great Britain, Europe and Japan.
Euro at lowest versus yen since 2000 (Financial Post)
Implication: Japanese companies with an interest in holding foreign events in Europe, would be wise to seize the opportunity to book them now.
A much more competitive Europe (FX-MM)
Safe-haven currencies such as the (U.S.) dollar, the Japanese yen and the Canadian dollar have recorded gains of roughly 4% so far this month.
Since the end of the first quarter, the yen has jumped by 13.5% against the euro, the dollar by 9%, and the pound by 6%. Some of the major Asian currencies have also jumped against the euro over this time period – the won, the Singapore dollar and the Taiwanese dollar are all up by 8% since the end of March.
Canadian dollar on 'full-fledged secular bull run' (Globe and Mail)
Canadians Headed to Europe Are in for a Windfall (Wall Street Journal)
There hasn’t been a better summer in years for that European vacation, at least measured by the buying power of the Canadian dollar right now. While the loonie has struggled to gain much recently against the U.S. dollar, it’s up 7.6% against the euro so far this year—up by 4.7% since the end of June.
Canadian Dollar Hits New High vs. Euro (Wall Street Journal)
The Canadian dollar strengthened Thursday against the U.S. dollar, erasing losses made during the intraday session, while reaching a historic high against the euro after equity markets eked out small gains on positive investor sentiment.
Implications: Canadian companies that want to stretch their budgets for incentive travel, foreign team building retreats and conferences, would be wise to look to Europe, the U.S., and destinations like the Caribbean where payments in are made in U.S. dollars or Dubai where the value of the AED is pegged to the US$. A strong 'loonie' means that locations like Dubai, Abu Dhabi and Oman are finally affordable.
Implementing Cost Savings Strategy
To realize cost savings:
- airfares need to be booked well in advance.
- companies should pay higher deposits for accommodation and to suppliers at foreign destinations when rates are in their favor (e.g. 75% - 80% instead of 50%).
If there is a change in the foreign exchange picture, the balance can be paid much earlier than when it would normally be due to avoid losses due to the declines in their currency value.
In a win-win scenario, in exchange for significantly more money up front, perhaps more favorable attrition clauses could be negotiated.
Implications for Venues
For resorts, conference centers and event venues, the pattern would be the reverse.
- For example, based on the recent headlines, current organizations based in Europe would be wise to concentrate marketing efforts on Japan, Canada and the U.S.
There are a number of tools that will help event planners and their clients monitor and track currency values. With this data, they can map out a strategy to seize opportunities for cost savings when planning business meetings, incentive travel and other corporate events:
For more currency tips, read Event Planning Tips: Specify Currency When Booking International Suppliers and Cvent's Tools for International Event Planning.