Before holding a Danube River Cruise incentive program, Doug Henson, senior vice president and chief marketing officer, Shenandoah Life Insurance Co., Roanoke, Va., purchased euros in May 2004 at a price of $1.08 U.S. to one euro. By the end of the year, the value of the euro had jumped to around $1.33. “It's absolutely amazing,” Henson says.

If the dollar's decline continues, some planners worry that the price of European incentive programs will be too high for their budgets. But there are ways to mitigate your risk.

Contingency funds are a must for European meetings, advises Todd Zint, assistant vice president, meeting planning, NFP Insurance Services, Austin, Texas. Zint has a program going to Ireland and London in 2006 and has recommended a contingency fund of 3 percent to 5 percent to protect against the “currency conversion challenge.” If the dollar weakens further, the company has monies available to help cover the extra costs. And if the dollar strengthens, the company can use the extra dollars to enhance the program.

Another strategy is to consider European hotels that offer guaranteed U.S. dollar rates. For example, Monaco offers dollar guarantee packages that lock in prices in U.S. dollars through July 2006, depending on the hotel.

Or, you may want to consider purchasing currency futures. Both Chuck Lane, director of public relations and incentive travel for Humana in Green Bay, Wis., and Richard Granger, assistant director, conference planning, Hartford Life, Hartford, Conn., say their companies have gone into the currency futures market to hedge against the risk of a declining dollar.

With a futures contract, traded on an exchange like the Chicago Mercantile Exchange, the buyer agrees to purchase a specific amount of a specific currency at a fixed price in U.S. dollars on a certain date in the future. When that day arrives, the buyer pays the specified rate, no matter how the currency may have fluctuated.

Locking in a price in advance makes sense if you think the value of the U.S. dollar is going to keep falling against the euro. But there is, of course, always the risk that the dollar could increase in value (and your futures contract would work against you). It's a good idea for your company's financial officers to do some due diligence before deciding that currency futures are a good investment for a future meeting.

For more information about trading currencies, including dollars and euros, go to the Chicago Mercantile Exchange Web site at www.cme.com.