Weaker pound forces Britons to tighten holiday budgetJanuary 10th, 2009 - 9:38 am ICT by IANS
London, Jan 10 (Xinhua) Julia Foster from Essex, a county on the southeast coast of England, is still pondering whether she should spend an already booked holiday in March in the French resort of Nice.A trip to France is not uncommon for her - she visits the country at least three times a year on long holidays or one-day trips - this year, however things are different.
Britons have begun to feel the effects of a depreciating pound caused mainly by sharp cuts in interest rates as part of efforts to bring about an economic recovery in the country.
The latest reduction reduced the basic rate to 1.5 percent, the lowest since the Bank of England came into existence in 1694.
“Before the devaluation of the pound, it was good value for money to visit France, but now, it is no longer cheap. I can even find cheaper champagne in British supermarkets.
“I have not made up my mind to visit Nice, and may cancel my plans as I don’t want to go to the euro zone, at least not as much as I used to. The US is not a good choice either,” Foster said.
The pound has lost nearly 30 percent of its value since late 2007 and is now nearly equal to one euro.
Foster enjoyed her last European holiday in Prague, instead of Paris, not only because of the attractions, but also because the pound is still more valuable against the Czech Koruna. The Czech Republic is not due to adopt the euro until 2015.
According to the Office of National Statistics, the number of visits abroad by British residents fell six percent from August to October 2008 to 16.4 million, compared to the previous three months.
Meanwhile, the devaluation of the pound has failed to bring an influx of foreign visitors due to the global economic downturn. It has forced the Americans, which make up the largest number of visitors to Britain every year, and tourists from France, Germany, Ireland and Spain to cutback on trips abroad.
Britain’s national tourism agency VisitBritain has forecast a year-on-year 2.7 percent decrease in the number of visits to the country in 2008 to 31.9 million, and a further drop of 0.7 percent to 31.7 million in 2009.
From August to October 2008, the number of visits to Britain by overseas residents decreased four percent to 7.8 million from the previous three months.
Britain has been warned it may face a difficult year and even see its recession continuing into 2010. In the face of further economic woes, Britain is hoping for a boom in tourism, which has now become a more important contributor to the economy.
The country is looking increasingly toward emerging markets such as China and India for potential visitors.
In 2007, the number of visits in Britain by the Chinese rose to 130,000, with the money spent by them reaching $274 million. The appreciation of the Chinese yuan against the pound by 33 percent since late 2007 has enabled Chinese visitors to feel more relaxed while paying their bills in Britain.
Omega, one of the leading travel agencies in the country with a business focus on Chinese customers, has confirmed that its tourism and hotel businesses are faring well despite the downturn.
“It has made no difference to our bookings, especially for business and student trips,” said a customer service representative who gave her name as Ava.