JThe fall in the pound may stifle British holidaymakers in the face of prices if they decide to go abroad. But a slice of the travel industry sees a silver lining in storm clouds.
Tour operators welcoming visitors are quietly calling it their best month for bookings since October 2019, as American tourists take advantage of the fall in the pound sterling.
Gathered at a conference 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 huge topic of conversation in a sector that “has had its own recession over the last couple of years”.
The second-largest pre-pandemic inbound tourism market, China, is still closed, but by far the biggest source of visitors is usually the United States – and numbers are rebounding rapidly after their restrictions were relaxed in June. And the average American tourist already spends three times what an average British holidaymaker will spend on domestic travel.
“Anything that encourages travel from the United States helps,” Croft said. American tourists spent £4.2 billion in 2019, a figure that could rise next year with the strength of the dollar.
“It was $1.37 a pound a year ago. Now – well, I haven’t checked in 10 minutes,” Croft said. “But in recent days, more and more people have been depositing money for next year, money in people’s banks right now, with the commitment that they are coming.”
The pound fell to a record low against the dollar on Monday, just above $1.03, and was hovering above $1.10 on Friday.
Lana Bennett, managing director of Tours International, a family-owned bespoke travel company that primarily caters to US visitors, said: “After all that we’ve been through for us, this is pretty good news. We’re seeing more inquiries, there’s a lot more certainty, more excitement – people want to firm things up and take full advantage of it.
The prospect of King Charles III’s coronation had also stung the US market, she said. However, rising inflation, energy costs and staff shortages in UK hotels and tour operators were a challenge: “Rates are going up – that is offsetting us. We have to make sure the supply is prepared.
Meanwhile, outbound tour operators cringe. Travel association Abta said the agents and operators it represents had yet to report a drop in bookings, and there remained considerable pent-up demand in Britain for overseas travel after two years of Covid restrictions.
A spokesperson said: ‘Customers have repeatedly told us that holidays are one of the last things they will cut back on when looking to ease financial pressures.
Early booking could lock in prices for hotels and flights that operators had secured – and all-inclusive packages were a “stress-free option”, the Abta spokesperson added, for those worried that the value of their pounds no longer fall.
For Brits planning to head west, the cumulative cost of their next vacation is likely to be significantly higher than in 2019, when 4 million British visitors traveled to the United States.
Ian Taylor, editor of leading trade publisher Travel Weekly, said even a travel chief executive he spoke to this week had ruled out taking his family on vacation to the United States.
He said: “It will have an impact but more nuanced than people imagine. The Eurozone is also in recession and Turkey is cheap. But for the United States and the Caribbean, it will certainly be expensive.
Paul Charles, chief executive of travel consultancy PC Agency, said the impact of the economic crisis would take time to show, at a quiet time of year, but there had been strong forward bookings .
Although there were no immediate signs that bookings would dry up, he predicted further offers to encourage UK customers to fly out. “Winters can be harsh on tour operators, so they need a good summer – but they’ve had an amazing one this year.”
Some have expressed concern though, such as Virgin Atlantic’s Shai Weiss, who said this week that Liz Truss and Kwasi Kwarteng’s mini-budget was “harming consumers” – even though he believed holidays remained “the sacred thing “.
Airlines are facing huge extra dollar costs, for fuel and aircraft purchases – and so transatlantic airlines, like inbound operators, are pinning their hopes on soaring US customers.
While domestic consumers are reeling from rising mortgage rates and soaring inflation, for visitors, as Weiss said: “The UK is on sale… Come and see the new king, half price.”