The number of people visiting the UK has fallen for the first time in seven years, it was today revealed.
There were 31.9 million foreign visits to Britain last year, a 2.7% fall on the 2007 number, The Office for National Statistics (ONS) said.
The total was the first drop in visitor numbers since the terrorist attacks of 11 September in America.
The report revealed UK tourists also made fewer visits abroad last year.
Tourism bosses blamed the global economic crisis which started to bite in earnest in autumn last year as a major factor for the fall in visitor numbers.
They also painted a gloomy picture this year as the credit crunch continued to subdue typical spending habits.
But the UK saw an increase in visits from the French who overtook Americans as those making the most visits to our shores.
The fall in numbers did not stop visitors from spending while in the UK, with £16.3 billion being splashed, representing an increase of 2.3% on the 2007 figure.
Sandie Dawe, chief executive of Visit Britain, the national tourism agency, said: "The decline in visitor numbers in 2008 was certainly not unexpected.
"The figures illustrate the continuing challenges of maintaining Britain's popularity as a destination as the global economic downturn began to bite and in the face of increasing competition from rival destinations.
"There are positive signs for the start of 2009 as a weak pound offers value for money that other countries cannot match.
"However, we still expect 2009 to be equally challenging and will be doing all we can to remind international visitors of the many quality experiences they can enjoy here."
London remained the top destination for overseas visitors with 14.8 million trips to the capital last year.
Edinburgh with 1.2 million visits, Manchester with 0.9 million visits, Birmingham with 0.8 million and Glasgow with 0.6 million made up the rest of top five.
Visits to the UK were divided evenly between those on holiday, those visiting friends and family and people on business trips.
Americans spent the most while in the UK with a total of £2.2 billion, representing 14% of all spending by visitors.
Brits ignoring the credit crunch ventured abroad visiting perennial favourites Spain and France, followed by the US, the Irish Republic and Italy.
Around two thirds of Britons travelling abroad were on holiday.
The combination of the foot and mouth outbreak and the 9/11 terror attacks saw the number of visitors to the UK dramatically fall in 2001.
But a concerted effort by the tourism industry saw visitor numbers to the UK soar in the following years as it became an increasingly popular destination.
The biggest fall in visitors to the UK last year took place in the last quarter of 2008, coinciding with the global financial crisis that originated in the US.