March 11, 2016
Los Angeles is now the eighth most expensive city in the world for tourists and foreign businesspeople, a study released Thursday said, as a rising U.S. dollar has pushed the City of Angels ahead of pricey metropolises including Tokyo and Shanghai.
L.A. — which ranked 27th last year — is now only slightly cheaper than New York, which ranked 7th on the list of 133 cities compiled by the Economist Intelligence Unit. Singapore remains the world’s most expensive place for visitors and expats, followed by Zurich, Hong Kong, Geneva, Paris and London. The three cheapest cities were Lusaka, Zambia; Bangalore, India; and Mumbai.
The Worldwide Cost of Living survey, which has been conducted for more than 30 years, looks at prices of 400 goods and services, though it does not include the cost of accommodations.
Simon Baptist, chief economist at EIU, said in an interview that for Angelenos, the cost of goods and services in fact is not rising much because inflation has remained relatively low. But the sharp appreciation of the dollar against many other currencies since mid-2014 is making many American cities relatively more expensive for foreigners. And that could cut into the number of tourists coming to Southern California and curb their appetite for purchases.
“We know that international tourist arrival [numbers] are quite sensitive to this,” said Baptist. “They are less likely to come to the U.S., and those that do are likely to spend less.”
Los Angeles welcomed a record 6.7 million foreign visitors last year, up 3.4% over 2014, and they spent $6.4 billion, the city said.
Mexico, China, Canada, Australia and the United Kingdom were the top sources of overseas visitors. While Mexico supplies the most foreign tourists, China’s numbers are growing the fastest of any country, up more than 13% last year to 779,000.
Business travel, Baptist said, is less susceptible to fluctuations in exchange rates. “It’s less responsive to prices, and while the U.S. is expensive to travel to, there’s still lots of business to be done there,” said Baptist, who is based in Singapore.
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