The Plunging Pound, Terrorism in Europe, and the UK’s Tourism Boom
Brexit seems to have done a number on the value of the pound, with its value continuing to fall even below the 31-year low reported last week. Meanwhile in Europe, chaos continues to reign amid terror attacks in France, Belgium, Germany and Denmark and severe political turmoil in Turkey… And while most people are feeling the effects of such long-term uncertainty and general doom-and-gloom, there is one industry that is having a fantastic time: the British tourism industry. Cornish ice-cream stall operators, pay-by-the-rescue beach lifeguards and sellers of suncream rejoice; Britain is expecting one hell of a tourist boom.
The leisure industry, which welcomed unprecedented levels of foreign tourists and domestic tourists holidaying in the UK last year, is expecting an even more record-breaking year this year, as the plummeting pound makes the UK much more attractive to overseas visitors – and makes UK citizens relatively too poor to go away. The rapidly shrinking value of the pound means UK citizens will get more bang for their buck staying at home, while foreign tourists will be comparatively much richer and more able to enjoy their holiday in the UK. Coupled with this, the recent spike in terrorist atrocities across mainland Europe – most of which have been specifically targeting public events and celebrations – make holidaymakers much less likely to choose the EU and much more likely to stick to the UK.
The Coming Tourism Boom: Stats
The director of the tourist company VisitBritain, Patricia Yates, yesterday said that “the shaken pound is very likely to boost UK tourism, and we know from our sources and our research that online travel sites and tour companies have seen a vastly increased interest in searches such as “travel to Britain” in the past two weeks.”
She noted that leisure companies have seen a powerful surge in their business figures since the referendum, and noted that a record number of Britons were choosing to holiday at home rather than going abroad, and a huge number of inbound tourists were flying in even before the Referendum result brought the pound crashing down.
Further backing this optimism are search engine results given by the air travel company CheapFlights, which confirmed that since the referendum result, searches for airline tickets from the US to the UK doubled. Searches for flights to the UK from China leapt up 61%, while searches for cheap flights to Britain from Canada jumped up by 49%. In the same period, searches for flights from EU nations increased sharply, with an average increase of 31% led by Spain and Italy, which showed enormous search increases of 84% and 62%.
The same conditions that are causing non-UK citizens to pack their bags and head off to sunny Crosby are, however, proving prohibitive for UK residents who want to sate their wanderlust, leading to the record numbers of domestic tourists seen this year.
Speaking on behalf of online hotel room giant Roomzzz, a company operating apartment hotels (or “aparthotels”) throughout the North of England, Mark Walton said that although English hoteliers had seen business drop off in the lead-up to the referendum, the immediate aftermath had been a massive boost to the hotel business – since the referendum, UK holidaymakers have increased their bookings by 11%, while bookings from EU member states increased by 17% – a development which Walton described as “completely unexpected but very welcome.”
Giving the British public quite a lot of credit, he went on to say that he believes “British people want to holiday in the UK as a sort of vote of confidence in the nation. It’s definitely a case of people wanting to spend their money and time in their own country.” which is certainly a nicer narrative than just supposing they can no longer afford to go abroad.
Offering his own opinion, Dimitri Konavalovas, who is the chief operating officer at Hotelscombined, an online booking service, told us he had seen his search stats leap up by 13% in the weeks following the referendum – and most of that jump was British customers seeking British hotels. This he rather pragmatically attributed to the “uncertainty surrounding the value of the pound, convincing many people that it’s a better bet to stay home.”
UK Tourism success is good for the UK on the whole
The UK’s tourism and hospitality industry is inseparably linked to the health of the UK as a whole, as it is the UK’s fourth-largest employer. 10% of the entire UK workforce is employed in tourism and hospitality, and the total businesses thriving there is over 180,000.
Its representative body, the British Hospitality Association, has campaigned for years for a cut to VAT for the Tourism and Hospitality Industry, stating the competitive advantage provided would be enormous. Now, in the wake of the Brexit vote, the BHA says it is time to “seize the chance” and permanently cut the VAT they pay, possibly extending the cut to restaurants in the future, to help fuel the coming tourism boom as effectively as possible.
The collapsing pound and uncertainty across the rest of Europe has certainly played out in the UK’s favour, but it is important to remember that the tourist industry was already in a boom before the vote – in 2015, a new record was set for foreign tourists coming to the UK, with 36.1 million visitors to the country, and spending increased to an incredible £22.1 billion. That trend was continuing into 2016 before the June 23rd Vote, with the customer demographic information listed earlier in this article revealing incredible growth in UK tourism from nations including the US, China, Germany, Australia, Spain and Italy, making the beginning of 2016 a record-breaker in its own right.
The first quarter of 2016 also smashed the record for most spending on domestic holiday trips lasting two days or less – “overnights” or long weekends. Visitors on these short trips spent £1.8 billion between January and March, an increase of an incredible 23% on the same stretch in 2015.
With the tourist industry reacting with some of their best deals ever, airlines adapting to offer tempting tickets to customers interested in visiting the UK, and more Britons than ever before choosing to holiday at home, this summer is a good one to visit Britain.
And that’s not even mentioning the heat.