While the struggling British pound has become a woe to Brits wanting to travel abroad, it has also made the United Kingdom an appealing destination for tourists, especially from the United States.
The pound sterling has been dropping in value against the dollar for months, and it plunged drastically — following the government’s mini-budget announcement to increase the borrowing to pay for tax cuts — to $1.0327, a record low since Britain shifted to the decimal system in 1971.
Patricia Yates, CEO of UK national tourism agency VisitBritain, said: “With the pound offering good value for international visitors, we have got a timely opportunity to influence destination choice and drive bookings, capitalizing on those markets where we see growth including the USA, our largest and most valuable market, competing hard to ensure the undecided choose Britain.
“The USA has been one of the strongest markets to recover, with flight arrivals and bookings to Britain nearing pre-pandemic levels,” she added.
Joss Croft, CEO of UK inbound, a trade association that represents almost 300 UK tourism businesses, said, “Current exchange rates make the UK an even more attractive destination for international visitors.”
Inbound tourism, the UK’s third-largest service export, was worth more than£28 billion ($31.6 billion) to the economy in 2019. As such, additional visitors and their spending in Britain will aid the UK’s export recovery and growth, Croft said.
“We have received reports from our members that they have seen an increasing number of new bookings from American clients for 2022 and 2023,” he added.
Dimitrios Buhalis, deputy director of the international center for tourism and hospitality research at Bournemouth University in the UK, said, “The weakening of the British currency will encourage foreign travelers to visit the UK in the near future.
“We expect travelers from the United States, but also from many other countries, will take advantage of that,” he said. “We also expect countries that primarily operate with American dollars to increase their investment in tourism and hospitality assets in the UK.”
Larry Yu, a professor of hospitality management at George Washington University, said: “The UK had been the third top destination for US tourists before the pandemic. It has been a popular destination for US tourists due to cultural proximity. Now the stronger dollar will motivate the Americans to enjoy their holidays in the UK.”
On the other hand, Yu said he believed that the UK’s outbound tourists to the US will be affected due to the increasing costs of travel in the US. “While the UK has been one of the top markets for the US, the value-oriented UK tourists will substitute destinations other than the US for their overseas travel,” he added.
While travel experts agreed that the weak pound can boost the UK’s inbound travel in the short term, they also believe that the UK could lose its competitive edge in the long term.
“Although the exchange rate may result in a short-term boost, we can’t assume this will continue in the long term, as international tourism is very competitive,” Croft said. “If we are to retain our crown as a world-leading tourist destination, we need to ensure that the UK has competitive visa, immigration and border systems and invests in the promotion of Britain abroad, and that visitors receive a first-class welcome.”
Yates said Britain cannot build a resilient tourism industry on the back of a weak pound. “Tourism is an extremely competitive global industry. People have a lot of choice and there are plenty of places that will always be cheaper than us.… We will continue to promote Britain as an exciting destination as we compete for international visitors and economic growth in the longer term,” she added.
Buhalis, of Bournemouth University, said he believed that a strong currency is a prerequisite for the industry and the market to be healthy and sustainable.
“The UK’s tourism is very resilient, even at times when the British pound is very strong, and the diversity of attractions, facilities and activities will ensure that long-term UK tourism and hospitality will be successful,” he said.
