Downturn in London tourism industry

London investors could be feeling the pinch with the official London tourism authority, Visit London, predicting that tourism levels in the capital will fall in the next few years.

Last year, over 25 million people visited London and contributed nearly £16.6 billion towards the travel and tourism industry ensuring that property investors with stakes in hotels and properties had good returns on their investments.

However the credit crunch looks like it is starting to bite and the current economic climate means that Visit London believe that the number of visitors to the city will fall by 2.7 percent in 2008 to around 24.8 million visits, and by a further 1.2 percent in 2009 to around 24.5 million visits. Visitors are also expected to spend less than in previous years when inflation is taking into account. It should be noted that these figures only take into account those people who stay in the capital for at least one night and do not take into account day-trippers.

The drop in numbers is both in the domestic and international tourism market, with one of the largest predicted downturns in the American market as a weak dollar means many Americans are not looking to travel or spend so much money. Japanese tourism is also predicted to fall.

The Euro has strengthened against the Pound however this alone has not been able to persuade large enough numbers of Europeans to visit London to offset the loss in the American market. Russian, Indian and Middle Eastern tourism is expected to grow slightly.

Most of the tourism industry has seen a small downturn in numbers and spend, and the trend is expected to continue. Bookings for hotels and other holiday accommodation are said to be soft. Despite this, it could be good news for some property investors – if the tourism market continues to be less than buoyant, property prices may well fall and if this is the case, there may be plenty of property bargains to be snapped up.

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