TThe falling pound could leave UK holidaymakers choking on prices next time they go abroad. But part of the travel industry is seeing a silver lining in the storm clouds.
Tour operators who cater to visitors are quietly calling it their best month for bookings since October 2019 as US tourists take advantage of the sterling’s plunge.
At a conference convened in Aberdeen this week, there was renewed optimism from executives whose businesses have been battered during the pandemic.
Joss Croft, UKInbound’s chief executive, said the economy was a big talking point in a sector that “has had its own recession over the last two years”.
China, the second-largest market for inbound tourism before the pandemic, is still closed, but by far the largest source of visitors is usually the US – and numbers are recovering quickly after their restrictions were eased in June. And the average American tourist is already spending three times what the average British holidaymaker would spend on a domestic trip.
“Anything that can incentivize travel from the US is helpful,” Croft said. American tourists spent £4.2 billion in 2019, a number that could rise next year with the strong dollar.
“A year ago it was $1.37 a pound. Well – well, I haven’t checked in 10 minutes,” Croft said. “But in the last few days, more people have been depositing hard dollars for the next year, money into people’s banks, with promises that they will come.”
The pound fell to a record low of just over $1.03 against the dollar on Monday and hovered above $1.10 on Friday.
Lana Bennett, Managing Director of Tours International, a family-run bespoke tour company that primarily serves US visitors, said: “After everything we’ve been through for us, this is pretty good news. We’re seeing an increase in requests, there’s a lot more certainty, more eagerness – people want to solidify things and take full advantage.”
The prospect of the coronation of King Charles III. also teased the US market, she said. However, rising inflation, energy costs and staff shortages at British hotels and tour operators were a challenge: “Prices are rising – that is a counterweight for us. We need to make sure supplies are prepared.”
In the meantime, outbound tour operators are gritting their teeth. Travel association Abta said the agents and tour operators it represents have yet to report a drop in bookings and the UK still has significant pent-up demand for outbound travel after two years of Covid restrictions.
A spokesman said: “Customers have repeatedly told us that vacation time is one of the last things they will cut back as they try to ease the financial pressure.”
Booking early could secure rates on hotels and flights that operators had secured – and all-inclusive packages are a “hassle-free option,” added Abta’s spokesman, for those worried the value of their pounds could sink further.
For Brits considering a trip west, the cumulative cost of their next holiday is likely to be significantly higher than it was in 2019, when 4 million British visitors traveled to the US.
Ian Taylor, the editor-in-chief of leading specialist publisher Travel Weekly, said even a tour guide he spoke to this week ruled out taking his family on a planned US vacation.
He said: “It will have an impact, but more nuanced than people imagine. The Eurozone is also in recession and Turkey is cheap. But it will certainly be expensive for the US and the Caribbean.”
Paul Charles, chief executive of travel consultancy PC Agency, said the effects of the economic crisis would take time to show at a quiet time of year, but there had been strong advance bookings.
Although there were no immediate signs that bookings were drying up, he predicted more offers to encourage British customers to fly away. “Winters can be cruel for tour operators so they need a good summer – but they’ve had a fantastic one this year.”
But some have raised concerns, like Virgin Atlantic’s Shai Weiss, who said this week that Liz Truss and Kwasi Kwarteng’s mini-budget is “harming consumers” – even as he was confident holidays remain “the holy thing”.
Airlines are incurring huge additional dollar costs for fuel and aircraft purchases – and so transatlantic airlines, like inbound operators, are pinning hopes on increasing customer numbers from the US.
While domestic consumers are reeling from rising mortgage rates and rising inflation, for visitors, as Weiss put it, “The UK is for sale… Come see the new king at half price.”
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