Introduction. The tourism industry affects the development of both individual countries and the world economy as a whole. With the expansion of international trade and other forms of international economic relations, raising the level of culture and education, tourism is developing rapidly. Significant impact on the activities of the tourism sector is caused by exchange rate fluctuations. As the tourism industry cannot adjust the exchange rate on its own, it has to adapt to currency fluctuations. Thus, the role of the tourism industry in the formation of foreign currency is significant, so the question of the impact of the tourism industry on the formation of foreign currency is relevant today.
The purpose of thepaper is to determine the role of the tourism industry in the formation of foreign currency.
Results. International tourism is the most numerous commodity in world foreign trade, and for some countries it is already the most important export sector and foreign exchange earnings. As the world is currently experiencing a global health, social and economic emergency with the COVID-19 pandemic, travel and tourism are among the most affected sectors with local aircraft, closed hotels and travel restrictions in almost all countrieіs. The exchange of foreign currency is associated with the purchase or sale of currency other than their own. The rate at which the currency of one country can be converted into the currency of another country is the unit price in terms of another currency in which the exchange takes place. For the tourism industry, a “strong” currency makes its country less attractive, while travel to countries with a “weak” currency is encouraged. A further fall in the dollar against the euro will mean that Europeans, inspired by the purchasing power of the euro and the low dollar, will be much more likely to visit the United States and countries whose currencies are pegged to the dollar as tourists.
Conclusion. Thus, on the basis of the conducted analysis it is possible to define that really, there is an interdependence of development of tourist branch and formation of foreign currency in the country. Particular attention should be paid to further study of exchange rate changes and their impact on the intensity of tourism development. In countries where the local currency is pegged to the US dollar, the depreciation of the dollar will also depreciate the local currency. Changes in exchange rates affect the level of price competition in countries, as well as the growth rate of national income.
Tourism Firms’ Vulnerability to Risk: The Role of Organizational Slack in Performance and Failure
