As the pound plummets, Americans are choosing to travel to the UK

With the pound plummeting, the British tourism industry is booming, and Americans who are preparing to travel have all set their destinations in the UK. However, British people who have travel plans are not so happy.

GBP/USD exchange rate plummets

On Friday, September 23, 2022, under the leadership of new Prime Minister Liz Truss, the British government announced a series of tax and fee reduction policies.

The pound slumped in response, hitting a record low of $1.0327 on Monday morning before stabilizing at around $1.07.

This means that American tourists can now exchange less dollars for the equivalent amount of pounds. According to xe.com, as of September 26, 2022, 1 US dollar can be exchanged for 0.95 pounds, which is a significant change compared to 0.85 pounds a month ago or 0.73 pounds a year ago.

The fall in the value of the pound is good for American tourists because it increases their purchasing power in the UK. While there are many places Americans want to travel to, this exchange rate is very tempting for American tourists and could drive a wave of tourism to the UK.

UK is top destination for US tourists

Thanks to a stronger dollar, Britain has become more attractive to American tourists.

Even without considering the appeal of the UK’s history, culture, cuisine and natural environment, the rapid depreciation of the pound, coupled with the surge in the US dollar, means that now is the best time for American tourists to visit the UK. According to GlobalData, the number of people traveling from the US to the UK is expected to increase by 140.7% compared to last year.

One of the key policies proposed by the chancellor was the decision to reintroduce a tax-free shopping scheme for international tourists, with shopping centres across the UK now able to compete head-on with those in Paris, Milan and Madrid.

A weaker pound could help make up for business lost from a lack of domestic tourists, who were one of the main sources of growth in retail tourism and luxury goods sales in Britain before the outbreak.

British families hit hard

As a tourist destination, the UK stands to benefit, but for British households already struggling with soaring energy bills and inflation, it is undoubtedly a cause for anxiety.

According to a GlobalData consumer survey, 93% of British respondents said they were very concerned about the impact of inflation on their household budgets. They may also soon face higher costs for imported goods and services, including fuel, cars and food.

As for travel, there are several possibilities: British holidaymakers may choose not to travel, or choose domestic travel, or they may lower their budgets, for example, by staying in budget hotels instead of star hotels.

Ultimately, the British will be the total losers, while American tourists will be the biggest beneficiaries.

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Depreciation

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