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Americans Abroad Feeling the Pinch

While the Brits, French and Italians race through U.S. department stores, flaunting their almighty pounds and euros and filling their shopping bags with bargains, Americans visiting Europe are feeling like paupers.

LONDON — While the Brits, French and Italians race through U.S. department stores, flaunting their almighty pounds and euros and filling their shopping bags with bargains, Americans visiting Europe are feeling like paupers.

Although tourists and business travelers are still regularly boarding flights for Milan, Paris and London, the continued weakness of the dollar means they’re suffering sticker shock once they land. Most have begun pinching pennies, especially when it comes to shopping and the little extras that make a trip special.

“Eighteen months ago, U.S. visitors were the biggest luxury spenders in London,” said Jamie Talmage, a business analyst for Visit London, the organization that promotes tourism in the English capital, and tracks visitor trends. Now, they’re lagging behind tourists from the Middle East, Russia, Nigeria and Canada — basically anyone with oil money. They’re still coming, but they’re cutting back on shopping, buying fewer souvenirs.”

John Oliboni, who owns a souvenir stall near Piccadilly, agreed. “I’ve seen a lot less Americans this year, because the exchange rate is so high,” he said.

But it’s not just souvenirs they’re cutting out.

“Do not, under any circumstances, go out to dinner in London,” said one tourist who visited the city during Thanksgiving break. “The prices are ridiculous. Now is not the time to visit London — unless you have family there, or you’re a hard-core traveler who can’t stay away.”

And while they may still be traveling to London, the number of American tourists is declining: In the first six months of 2007, the number of U.S. visitors dropped to 1.1 million from 1.2 million in the corresponding period last year.

But it’s not only London where the Americans are feeling the pinch. Hoteliers in Milan said their clients are cutting corners for the first time in recent history.

“Guests from the U.S. have changed their habits and pay more attention to fares and prices. They’ve also begun asking for special offers — which they have never done before,” said a spokesman for the Principe di Savoia, one of Milan’s top hotels.

The Four Seasons is reporting similarly frugal behavior. Business travelers, who are usually more immune to prices because of their expense accounts, have even started cutting corners.

“Those who used to stay in a junior suite now ask for a deluxe room,” said Olivier Gerber, marketing and sales director at the hotel, which is in the heart of Milan’s shopping district. “Many American guests also ask us to charge their credit cards immediately, in order to prevent larger currency changes.”

In November, the Four Seasons saw the number of its U.S. arrivals plummet 23 percent year-on-year. Similarly, the Carlton Baglioni hotel has seen a five percent drop in U.S. tourists over the past six to eight months. “We expect the situation to worsen in 2008,” said Stefano Innocenti, sales director at the hotel.

In Paris, meanwhile, U.S. tourists seem to be increasingly shocked by the price of meals and entertainment. “Customers now ask if breakfast is included. You know they’re looking at prices carefully,” said a spokesman for the Ritz in Paris.

A spokeswoman for the Paris Ile-de-France Tourist Information Center said a group of American tourists were shocked by the 100-euro price tag for a Moulin Rouge show. The prices haven’t changed in a while, she said, but the dollar-euro exchange is making them look expensive.

But one group of Americans that appears to be relatively immune to the collapse of the dollar abroad are the super rich. Indeed, some hoteliers said they were bracing themselves for a downturn in tourism but are witnessing just the opposite.

“We thought the Americans would be hit by the weak dollar, but we’re breaking record after record for occupancy,” said a spokesman for Claridge’s hotel, where the average room can cost 600 pounds, or about $1,200, per night. “And, they’re spending $21 on a cappuccino. We’re busy and we’re hoping it will continue.”

A spokeswoman for the Firmdale Group, which owns a clutch of hotels in central London, including the Covent Garden Hotel, the Soho Hotel and The Pelham, said they haven’t seen a decline in their American clientele. “People still need to travel. Americans are accepting the pound just as we do when we travel to Stockholm,” she said. Prices at the hotels vary but, for example, the Covent Garden Hotel costs between $400 and $600 per night.

Nevertheless, those in the tourist industry aren’t optimistic about 2008. “I think weakness in U.S. tourism is as much about the dollar as the state of the U.S. economy right now, and the first half of 2008 doesn’t look good,” said Talmage of Visit London. “Things should improve in the second half, but don’t forget it’s an election year, and Americans tend to stop traveling in November.”

— With contributions from Chantal Goupil, Paris; Francesca Vuotto, Milan, and Natalie Hughes, London

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