Currency rise affects trips, studies and purchases abroad

The Colombian economy has been hit hard in the last year with inflation above 9% and volatility in the value of the dollar that exceeds $4,500, With this, the purchasing power of people is eroded by being “everything more expensive”.

(See: Dollar: concern about its impact on the country continues).

And, for those who want to travel, study or shop abroad, it now costs a little more.

In the case of tourism, facing the dollarized countries, the Colombian peso is losing its value. However, in the United States this increase does not seem to have harmed tourism.

For Dana Young, president and CEO of Visit Florida, a tourism promotion entity, the industry of the state It shows no signs of slowing down, despite the rising cost of living in that country.

“Colombia is a resilient market for Florida tourism, as we saw visitor growth throughout the pandemic. In 2021, Colombia was Florida’s No. 1 market with 709,000 visitors, an increase of almost 30% over 2019. In addition, Florida captured 71% of Colombian visitors to the United States in 2021, or 52 percentage points more than our closest competitor”, indicated Young.

In 2020, Miami, Orlando and Fort Lauderdale were the main destinations in Florida for the Colombian market, which we can attribute to the breadth of air travel to these gateway cities.

“For this year, between June and August 2022, the levels of scheduled direct flights look very positive”, said the director. It is noted that the city of Fort Lauderdale currently has 138,000 seats scheduled for direct flights, which represents 13% compared to the same period in 2019.

For its part, Miami has just over 320,000 seats scheduled for direct flights, which means an increase of 32% compared to 2019.

(See: The businesses that move around the dollar in the country).

In the case of Orlando, it has almost 57,000 seats scheduled for direct flights, that is, 4% more than in the same pre-pandemic period. To close, the dynamics of travel, the firm has observed a large number of ‘exchanges’ andn those in which travelers could not enjoy their vacations in the last two years and have moved them to this year, in the case of trips abroad.

On the other hand, in the purchasing scenario, if the exchange rate remains high, one of the channels that would be most affected in the medium term would be e-commerce, since many Colombians who buy products abroad or imported will have to pay higher values ​​or not make purchases.

According to Álvaro Andrés Morales, manager of economic analysis for the Colombian Chamber of Electronic Commerce (Ccce), the transfer of the exchange rate to consumer prices is not usually immediate, since many businesses usually have inventories. However, to the extent that these inventories are depleted “the consequences of the rise in the dollar will be reflected, which in turn will put pressure on consumer prices in the country”.

He also assured that “In e-commerce, in particular, we have several categories that depend heavily on imports, such as the categories of household appliances or the category of tourism. If this current depression of the peso continues, it will be reflected in costs and a slowdown in consumption.Morales explained.

(See: What is the best time to buy dollars and invest with the currency).

For its part, the Colombian Chamber of Informatics and Telecommunications (CCIT) has stated that security programs, in which software stands out, could have a significant increase for companies, since the acquisition of licenses and services must be paid in dollars.

Likewise, the fluctuation in the price of the dollar, continues to await the behavior of the Colombian currency in the field of education, for those citizens who have plans to emigrate to continue their studies at any level.

According to figures from Migración Colombia, in the first six months of the year, 44,722 Colombian citizens left the country for study reasons, 115% more than in the same period of the previous year in which 20,046 departures were registered.

The worldwide phenomenon of the rise, increases travel costs, especially in destinations that have the dollar as the local currency. For Andrés Tobón, director of operations at Ocassio, “the affectation occurs above all the prices of the processes such as the visa and the studies that vary depending on the academic program”.

For her part, María Fernanda Vega, director of internationalization at the University of America, assures that “the change in the dollar has a very significant impact. We have seen a decrease in institutional and family capacity, so that students can access an exchange program.”

(See: Textile, Shoe, and Plastic Industry Feel the Impact.)

For the costs of international universities, Paola Caicedo, an expert in foreign education, explains that, “in the case of the USA it depends on whether you have nationality or not”.

Said “For those who have the nationality, the annual price is between US$35,000 for the public university. In the case of the Colombian student, the price is around US$65,000 per year.”.

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