UK tourists shunning the cost of the eurozone

By Will Smale
Business reporter, BBC News

Image caption,
Eastern European countries without the euro, such as Croatia, have attracted more UK holidaymakers

It wasn't just the rain-swept, cold day in London that was sending a chill wind down the back of tourism bosses from Western Europe.

Instead, as heads of the global travel industry met for their annual gathering at the giant World Travel Market (WTM) 2010 event, the damage being caused by the continuing high value of the euro was the dark cloud hanging over the representatives from eurozone nations.

With the pound and the euro now almost the same value for UK holidaymakers, the days of bargain, booze-fuelled fortnights in countries such as Spain, Portugal and Greece are presently a thing of the past for Britons looking for a bit of low-cost fun in the sun.

Add concerns about the impact of UK public sector job cuts on the British economy, and you can understand why eurozone countries that target British holidaymakers are downbeat about 2010, and apprehensive about 2011.

So much so that despite the glitz and gloss on show at the Excel centre in east London - where tourist boards from almost every country on the planet had their own exhibition stands - staff from some eurozone countries were reluctant to talk to journalists.

Despite it being press day at WTM, the Spanish Tourist Institute did not have anyone available for a one-to-one interview.

Staff at Tourism Portugal went even further, saying they had been told no-one was allowed to speak to the press.

'UK's problems'

Thankfully, Tourism Portugal's subsidiary Algarve Tourism Board did not seem to have received this message from above, and its president Nuno Aires admitted the region faces a challenge to keep up visitor numbers from the UK.

Image caption,
The euro is not a friend of British tourists

"The UK market is changing so fast, and we understand the economic problems in the country," he says.

"Plus the pound being so weak has certainly had some effect on [the number of Britons going to] the Algarve."

Mr Aires did not have an exact figure for how many British holidaymakers visited the Algarve this summer, instead saying it remained "static" compared with a year earlier.

He added while the British market was weak this year, the number of holidaymakers visiting the Algarve from Germany, Sweden and Denmark had continued to rise, which had "filled the gap".

Looking ahead, Mr Aires said he was confident the Algarve would remain a main destination for UK holidaymakers, but that offering them value for money was key.

Meanwhile, the French Tourism Development Agency said while overall 2010 visitor numbers were not out yet, Paris had "suffered a bit".

'Not just cheap'

While eurozone countries were downbeat, tourist boards and travel firms in eastern Europe were in buoyant spirits, as the weaker currencies in those countries makes them increasingly popular destinations for British holidaymakers.

Image caption,
Both Croatia and Bulgaria say they have culture as well as cheap prices

The main destination of Balkan Holidays is Bulgaria, whose currency currently exchanges at 2.30 leva to £1.

Miodrag Macura, director of Balkan Holidays, says price is a key advantage for the firm, which has seen a 6% increase in British holidaymakers so far this year.

"We certainly do benefit from the attraction of low prices in countries such as Bulgaria. Especially now the euro is so strong," he says.

"The price of a pint of beer, for example, is typically just 80p in bars in Bulgaria's coastal resorts.

"But it is not all about good prices. Bulgaria is a very beautiful country with great beaches, and lots to do."

Croatia (£1 equals 8.6 kuna) was equally pleased to report a rise in UK holidaymakers this year.

The country's Minister of Tourism, Damir Bajs, said the number of British visitors had increased by between 4 and 5%.

He said Britons were now "extremely conscious about value for money", and this would continue into 2011.

Niko Bulic, director of the Croatian National Tourist Board, agreed that being outside the eurozone meant the country could offer better "value for money", but insisted there were a lot more factors involved in the country's rising popularity.

In addition to the country's picturesque Mediterranean beaches and good food, he said Croatia had worked hard to create a modern infrastructure and quality holiday accommodation.

Funding cut

But if the high value of the euro is putting off Britons from travelling to the eurozone, does it mean that - transversely - many more Germans, Spaniards and the like have visited the UK this year?

Image caption,
Mike Bugsgang says the picture is currently not bright for travel firms

Visit Britain spokesman Mark Di-Toro said that while the exact figures had not yet been released, inbound numbers from the eurozone were up this year as the UK had become a lot more affordable.

Yet while the UK is now in an advantageous position to target more tourists from Western Europe, its budget has been cut by the government by 34% over the next four years.

Mr Di-Toro said it meant Visit Britain would have to target its marketing more effectively, which it was already doing by leading the way in the use of social media sites, such as Facebook and Twitter.

For travel industry analyst Mike Bugsgang of Bugsgang & Associates, the uncertain economic times meant that all travel companies - whether overseas or in the UK - had to work harder to attract cash-strapped British customers.

"All the trends suggest the prospects for the travel industry are not grand," says Mr Bugsgang. "The likely impact of the government spending cuts and public sector redundancies will be large.

"At the same time, Britons still want their holidays, whether overseas or in the UK.

"And value for money isn't the only issue for people when money is hard to come by - they want a company they trust."

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