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Yasser Chehade, a twentysomething engineer who lives in Hamburg, Germany, wants to come to New York for a summer vacation to look at the city's famous skyscrapers.
But he won't be visiting this year. The combination of high prices and an unfavorable exchange rate is prompting him to trade Manhattan buildings for the beach in Turkey, Italy or Spain. Those destinations, he says, are cheaper, closer and easier to book.
"There are other places for the moment that are more comfortable to visit," Mr. Chehade explains.
His decision to pass up New York is common this year. A dip in international travel to the city, sparked by economic woes abroad and unfavorable exchange rates in many countries, is creating tough times for city firms that rely on foreign tourists. Especially anxious are the 50 or so local vendors of tour packages, known as receptive tour operators, who sell their products to overseas travel agents.
After several years of record sales, business has dropped anywhere from 5% to 25% for these companies this year compared with 2000, according to executives at several firms that operate in this niche of the city's $16.7 billion tourism industry. International visitors account for 18% of New York's tourists.
"Nobody uses the...