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Nose-dive in US consumer confidence hitting tourism to UK
A “nose-dive” in US consumer confidence due to financial upheavals has become a major concern for UK inbound tour operators.
The industry body UKinbound warned that there was “little prospect” of a recovery from the US for the remainder of this year.
The body, which represents more than 250 companies and organisations selling travel to the UK, said: “he USA remains our biggest concern as consumer confidence nose-dived in the wake of stock market volatility, the collapse of some major mortgage lenders and a seriously weakened US dollar.”
Ukinbound’s latest business barometer for July indicated that visitor numbers held up “relatively well” with virtually no change over the same month last year, despite poor British weather and the foot and mouth disease outbreak.
Forward bookings were slightly up, although these were mainly from Europe as attracting long haul business “continues to be difficult”.
However, UKinbound said the governor of the Bank of England had offered a “glimmer of hope” by indicating that UK interest rates may have peaked at 5.75% and could be reduced if turmoil in the credit markets continues to dampen economic activity.
“A weaker pound would help tourism exports considerably and just these hints have resulted in a softening of the pound against the euro and the US dollar. If interest rates fall, we could see further improvements in exchange rates,” UKinbound said.
The group added that the UK continues to be a popular choice for international visitors despite being one of the most expensive destinations in the world.
“We have, so far, been able to overcome this problem with the range, depth and quality of the products we offer but unless we constantly seek to improve our product offering and customer service to appeal to ever more discerning customers, our popularity is likely to diminish,” UKinbound said.
“It was therefore good to see that despite the bad press tourism receives from the environmental lobby, over 75% of members who responded to this month’s poll have in place, or are working on, corporate environmental friendly polices.”
by Phil Davies
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