UK Tourism at New Highs
The weakness of sterling was behind a surge in the number of tourists although the number of business visitors declined. The big increase in visitors from North America, from 483,000 in June of last year to 650,000 this year, was "clearly buoyed by the particularly sharp drop of the pound against the dollar since mid-2016", according to Howard Archer, chief economic adviser to the EY Item Club.
The number of visitors from Europe rose by 2% to 2.241 million.
The weaker value of the pound since the Brexit referendum vote means that the UK is now a much cheaper destination than it used to be. Many mainland Europeans, Americans and Chinese people are taking advantage of that.
Long-haul flight bookings to the UK from the start of this month to August are up 10% on the same period last year. Visitors from two countries in particular are driving the boom. Bookings from the US are up 19% for June to August year on year, while those from China are up 29%.
The decline in sterling makes it cheaper for foreign visitors to come to the UK, but more expensive for Britons going the other way. However, UK residents took a June record of 7.2 million trips abroad, up 4%. Importantly, with the fall in the value of sterling putting them at a disadvantage, the amount they spent leapt by 15% to £4.6bn.
Today a pound buys only €1.13 compared with €1.29 two years ago. Its value against the US dollar has fallen from almost $1.60 two years ago to $1.29 today.
American visitors have returned in their droves – US tourist numbers declined after 9/11 in 2001 but are now finally starting to recover. They are high spenders so business owners like them. Not only do they go to London, they travel around and explore the regions. Even smaller hotels in Wales are reporting they are seeing American visitors. They are great visitors to have.
By contrast, the Chinese tend to favor shopping in London. It is reported that 70% of shoppers visiting Burberry's flagship store in Regent Street are tourists from China. Harvey Nichols in Knightsbridge has Cantonese- and Mandarin-speaking staff. This year Chinese tourists are expected to spend more than £1bn in the UK compared with around half that four years ago. Even though Chinese visitors tend to spend a lot, they are motivated by value. They love British history and culture but there has to be good shopping, too.
Despite recent terror attacks, Britain can continue to expect a huge influx of foreign visitors , especially from the US and China. The anticipated increase in tourists is a welcome relief for an industry that feared recent terror attacks might diminish the UK's attractiveness to visitors, particularly as, after attacks in Paris and Nice, France saw a dip in tourist numbers. The fall in the value of the pound is thought to be the chief attraction to overseas visitors.
Even though many tourists would have booked their flights before the recent terror attacks, cancellations have not yet been seen so there's a confidence that people are continuing to come. Visitors are apparently shrugging off the threat of terrorism and many are taking advantage of bargains created by a pound that's been weakened by Britain's impending divorce, or Brexit, from the EU.