November 27th, 2009 Rising euro will stop even more Brits travelling to Europe
The travel industry has never seen so many hurdles to overcome with oil prices on the up, bird and pig flu scares and the worst recession in living memory. The pound is at an all time low against the euro and dollar and most financers believe the Bank of England is more than happy to see this happen, as this makes GB more competitive.
The falling pound has benefited British exporters, the UK domestic tourist industry and encourages people to holiday in the UK. Moreover, the Bank of England has taken a very even stance over this demise and has basically admitted this is not the worst thing that could happen.
Historically, as a percentage of population no other country sees so many holidaymaker taking a foreign holiday and this is already evident in reduced income usually seen in such countries as France, Portugal, Turkey, America, Norway, Belgium, Germany, Scotland, Egypt. It has been forcast that for 2009 over a million less Uk tourists will visit Spain and given Spain’s high dependency on tourist income this will be a a devastating blow to their finances at all levels, causing businesses to shut down and increase job losses.
The fall of the pound adding to the recent recession has already had a bad effect on income for companies operating travel services for the UK. Airport firms, travel agents and hotels close to UK airports are all admitting reduced figures for the current year and because of the fall of the pound 2010 will only get worse. All these companies will have to take clarity of these figures and you can well expect to see cheaper Manchester airport parking and Manchester airport hotel parking prices.
Another problem for everyone involved is how to second guess the currency markets, take a hotel abroad for example if they are tied to a major travel agent they need to set a price now for the 2010 season that will be competitive enough to attract customers in a reduced market, but if they charge in pounds and the pound continues to fall then they could be in danger. Or on the flipside the travel company agrees the price in euros they could also loose out on this contract.