Americans have been indulging in “revenge travel” with gusto since pandemic-era restrictions were lifted, and the dollar’s recent surge has made that even more attractive.

In fact, so many Americans have been heading to Europe that many cities are scrambling for ways to staunch over-tourism. That’s because the Federal Reserve’s aggressive rate hikes and higher-for-longer stance have boosted the dollar against top global currencies, which have slumped as other central banks are expected to start cutting rates soon.

The U.S. Dollar Index, which measures the greenback against a basket of currencies, has jumped about 4% year to date and 5.6% from a low in July 2023. The upshot is that the dollar goes a longer way abroad, making overseas vacations less expensive for Americans.

But American tourism abroad is treated like an imported service when calculating GDP, which saw disappointing growth in the first quarter due in part to a wider trade deficit. In recent months, the share of service imports allocated to travel hit the highest level since 2005, when the dollar also experienced a period of strength, according to a note from Wells Fargo on May 10.

“On the services side of trade, the United States runs a trade surplus, so if foreign travel continues to ramp up alongside a swelling goods deficit, net exports could meaningfully weigh on real GDP growth,” analysts wrote.

Wells Fargo also calculated that a similar period of dollar strength from 2014 to 2015 saw travel imports (Americans vacationing abroad) grow by about $1.1 billion, while travel exports (foreigners vacationing in the U.S.) were little changed.

To be sure, $1.1 billion worth of travel services represents a 1.5% share of the total trade balance, analysts added. But don’t let that small share fool you.

“In short, growth in foreign travel may not be enough to wildly move the needle in any given month, but over time, it has scope to be a more consequential factor for net exports than presently appreciated,” Wells Fargo concluded.