North American visitor levels, which started to recover last October after the Gulf war, have faltered over the past two months, the British Tourist Authority believes, though there are no official figures yet.
Americans are by far the most lucrative single source of income for the UK tourist industry, which is already reeling from the recession. They spent pounds 1.28bn in Britain in 1991, down 23 per cent from the record 1990 spend of pounds 1.66bn, but still five times more than the Japanese.
The latest plunge in the dollar may encourage more Americans to take their vacations at home, an increasingly attractive option since internal US air fares were slashed in June. The recent cuts in transatlantic fares may not be enough to compensate.
The Ritz Hotel in London, which relies on Americans for more than 40 per cent of its business, expects the stronger dollar to reduce tourist occupancy, though demand from business travellers may be more resilient. Radha Arora, the Ritz's house manager, said the currency change over the past few months meant that for an American a pounds 190 single room had increased from dollars 315 to dollars 380.
Geoffrey Maitland Smith, chairman of the retail group Sears, said the weaker dollar was bound to have a further depressing effect on sales at its West End department store Selfridges. But there was one positive effect for UK retailers, he said. Their buyers were able to negotiate much lower prices from Far Eastern suppliers because there were fewer competing buyers from America.
The Society of West End Theatre played down the impact of the weaker dollar, despite the fact that one in seven London theatre-goers is a US visitor.
Seats in London were still cheaper than on Broadway, it said, though the gap is narrowing. London theatre attendances are 4 per cent up on last year. Box office revenues are less buoyant because tourists are less willing to pay top prices.
According to Alan Jefferson, international director of marketing at the British Tourist Authority, Americans are trading down. 'They're not staying at the top hotels but looking for cheaper accommodation or staying with friends and relatives.'
He believes North American visitor numbers have stumbled this summer after rising sharply in the five months to May. He forecast that 2.5 million North Americans will visit this year, well below the 3 million of 1990, though up on the 1991 level of 2.25 million, when tourists stayed at home because of the Gulf war.
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