Recession puts a dent in British tourism

LONDON (Reuters Life!) - The global economic crisis took a heavy toll on travel to and from Britain last year, figures released on Thursday showed, while the first quarter of 2009 was also gloomy for the tourism industry.

People walk their dog, in light rain, on the empty beach of the south coast holiday resort town of Worthing August 23, 2007. REUTERS/Russell Boyce

Visits to Britain fell to 31.9 million, down 2.7 percent from 2007 and the first fall since 2001, when the 9/11 attacks and a foot-and-mouth outbreak dented global travel, a report by the Office for National Statistics showed.

The decline persisted into the first quarter of this year, the statistics office said, suggesting tough times ahead for holiday companies, airlines and the hotel industry.

Visits by Britons abroad also dropped in 2008, marking the first decline in two-way travel -- both from Britain and to it -- since the Gulf War in 1991.

“Undoubtedly the economic downturn has had an impact,” said David Savage, manager of the International Passenger Survey, which covers 90 percent of visits to and from Britain.

In the first quarter of this year, visits by British residents abroad fell by 21 percent year-on-year, following a 9 percent fall in the last quarter of 2008.

The decline was driven in part by a drop in the number of holidays being sold, the compilers said, with a downturn in winter destinations such as Switzerland and Austria.

Visits by travelers from the United States, where the credit crisis led to the collapse of major banking giants such as Lehman Brothers, fell sharply, pushing Americans to third from first in the ranking of top visitors to Britain.

But despite the falls in the number of visits, a favorable foreign exchange rate boosted total spending, both in Britain and by Britons traveling abroad, the survey showed.

Foreign visitors to Britain spent 16.3 billion pounds ($26.74 billion) in 2008, while spending by Britons abroad rose to 36.8 billion pounds, reaching record levels.

The pound lost 25 percent of its value against the dollar and 30 percent against the euro in 2008.

On the bright side, the survey showed that visits from France and Ireland -- the number one and two ranked countries for visitors respectively -- continued to increase in 2008.

Britain is the sixth most visited country in the world, according to the World Tourism Organization, with France, Spain, the United States, China and Italy filling the top spots.

Editing by Paul Casciato