The plunging pound may cause British holidaymakers to choke at the prices if and when they next choose to go abroad. But one slice of the travel industry is seeing a silver lining in the storm clouds.
Tour operators catering for visitors are quietly calling it their best month for bookings since October 2019 as US tourists take advantage of sterling’s tumble.
Gathering at a conference in Aberdeen this week, there was renewed optimism from executives whose businesses were battered during the pandemic.
Joss Croft, the chief executive of UKInbound, said the economy was a huge topic of conversation in a sector that “has had its own recession for the last two years”.
Inbound tourism’s second biggest pre-pandemic market, China, is still closed off, but by far the biggest source of visitors is usually the US – and numbers are rebounding fast after their restrictions were eased in June. And the average American tourist already splashes out three times what an average UK holidaymaker will spend on a domestic trip.
“Anything that can incentivise travel from the US is helpful,” said Croft. American tourists spent £4.2bn in 2019, a figure that could increase next year with the strong dollar.
“It was $1.37 to the pound a year ago. Now – well, I haven’t checked for 10 minutes,” said Croft. “But in the last few days more people have been putting down hard dollars for next year, money into people’s banks right now, with the commitment that they are going to come.”
The pound fell to a record low against the dollar on Monday of just above $1.03, and was hovering above $1.10 on Friday.
Lana Bennett, the chief executive of Tours International, a family-run bespoke tour firm catering mainly for US visitors, said: “After everything we’ve been through for us it’s quite good news. We’re seeing a spike in inquiries, there’s a lot more certainty, more keenness – people want to get things firmed up and take full advantage.”
The prospect of the coronation of King Charles III had also piqued the US market, she said. However, rising inflation, energy costs and staff shortages at UK hotels and tour operators were a challenge: “The rates are going up – it counterbalances for us. We need to ensure the supply is prepared.”
Meanwhile, outbound tour operators are gritting their teeth. The travel association Abta said the agents and operators it represents had not yet reported a booking decline, 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”, Abta’s spokesperson added, for those who fear the value of their pounds may tank further.
For Britons considering heading west, the cumulative cost of their next holiday is likely to be significantly more than in 2019, when 4 million UK visitors went to the US.
Ian Taylor, the executive editor of the leading trade publisher Travel Weekly, said even a travel chief executive he spoke to this week had ruled out taking his family on a planned US holiday.
He said: “It will have an impact but more nuanced than people imagine. The eurozone is also in recession, and Turkey is cheap. But to the US and the Caribbean, certainly it’s going to be expensive.”
Paul Charles, the chief executive of the travel consultancy the 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.
While there was no immediate sign of bookings drying up, he predicted more deals to encourage UK customers to jet away. “Winters can be cruel for travel operators, so they need a good summer – but they have had an amazing one this year.”
Some have expressed concern, however, such as Virgin Atlantic’s Shai Weiss, who said this week that Liz Truss and Kwasi Kwarteng’s mini-budget was “hurting consumers” – even if he was confident that holidays remained “the sacred thing”.
Airlines face huge additional costs in dollars, for fuel and aircraft purchases – and so the transatlantic airlines, like inbound operators, are pinning hopes on soaring custom from the US.
While domestic consumers reel from mortgage rate rises and soaring inflation, for visitors, as Weiss put it: “The UK is on sale … Come and see the new king, half price.”