Saying ‘bon voyage’ has become more expensive

Saying ‘bon voyage’ has become more expensive

Weak U.S. dollar affects students’ budgets in all areas

By Maria Beerens

Despite the hit the dollar has taken at the international level,
the main impact on students, apart from bruised nationalistic
pride, seems to be on travel abroad.

For the last four months, the dollar lost 18 percent against the
Japanese yen and 10 percent against the German mark. This means
that whoever is traveling abroad will have to pay 18 percent more
for goods in Japan and around 10 percent more in Europe.

So far this year, the European tour prices for 18- to
35-year-olds in the Associated Students UCLA (ASUCLA) Travel
Service jumped by eight percent because of the reduced dollar
value, said Lucie Lena, association travel service manager.

The 1994 brochures of the two major tour operators for Europe,
Contiki Holiday and Europe American-European Services Unlimited
(AESU), have not been reprinted. The agency, however, informs
students about the higher prices.

In spite of that, the tour operators will still continue to sell
because they are so popular, Lena said. But in comparison to tours,
air and rail prices to Europe have remained the same.

Many students still continue booking trips to Europe because it
is an important experience, they said.

"I have never been to Europe before, I think it’s worth it,"
said Hone Yu, a chemistry and materials science major. "My parents
are paying for the trip. I do realize, though, that it is more
expensive. Maybe I won’t spend as much over there."

Those more concerned with prices, however, realize that a trip
to Europe or Asia will put a much larger dent in their wallets.

"I wouldn’t want to be traveling now," said John Gray, a
first-year MBA student at Anderson Graduate School of Management
(AGSM).

However, many people are more concerned with international
issues in business and economics.

"People who like to travel will travel less. People who own
hotels in America will be glad," said Joshua Coval, a business
economics doctoral student.

Students in the economics and business areas are aware of the
international market situation. And they worry about America’s
position as the world’s economic power.

It is a psychological matter for Americans and many tend to get
upset when the nation slides in international status, Gray
said.

"We Americans would like to have a stronger dollar. We are the
strongest economic power; we want to have a strong currency," added
another MBA student, David Hudson.

According to economists, a weak dollar will increase the amount
of exports, because U.S. products are cheap for the rest of the
world. The reason is that foreign monies can convert into more
dollars than before.

In turn, imports will decrease because U.S. dollars can only be
exchanged for a smaller amount of foreign currency, making imported
items expensive for Americans.

But the high point to this situation may be a reduction in
America’s trade imbalance with its main trade partner, Japan.

"It is a way of abrogating our debt. Japanese investments in the
United States are very high. Five billion dollars of export
earnings will be lost because of the pace of devaluation," said
Edward Leamer, professor of international economics at AGSM.

However, experts worry that the dollar’s continuous decline not
only is reducing U.S. purchasing power abroad and adding
inflationary pressure in the domestic economy, but that the dollar
will lose its status as the world’s favorite reserve currency.

"There is a decline in our economy and inflation is going up.
American government has to rebuild the American economy internally.
But what if we fail?" said Lisa Jild, a third-year communications
student.

"If you look in a larger scale, UCLA is a public institution and
it is affected by this. We are backed by government funds. And we
feel the inflation through the bowl of rice that costs 10 cents
more in the student restaurant," Jild said.

But many students may not fully realize the significance of the
dollar’s weak position on the international market.

"Most Americans don’t know what yen is. If it is not on MTV,
they don’t know it," economics professor Leamer said.