Will the Weak Euro Make a Big Difference to Tourism?

One of the most obvious areas to be affected by the rise and fall of the exchange rates between Sterling and the Euro is the tourism industry. First thoughts would inevitably turn to holidays being cheaper for Brits, as the Euro becomes worth less and less against our own currency. As the saying goes though, “there are two sides to every story”. The saying could have been written to describe the effect the weakening Euro can have on tourism as far as the UK is concerned.

Euro / Photo licensed under the Creative Commons, created by Images Money

Better Out Than In?

Many in the UK have been feeling pretty smug over the last couple of years, as Europe struggles to get a firm hold on the future of the single currency. There is no longer any dispute over whether the UK was right to decline entry into the single currency. However, it is becoming more and more apparent that our fortunes are inextricably linked with the health, or otherwise, of the Euro Zone and its member states.

The Advantages of a Weak Euro for UK Tourists

The Association of British Travel Agents recently remarked that there has never been a better time to go to Greece, but the reasons for that advice go much deeper than simply the exchange rate. Greece, which is struggling to elect a new government at the moment, is sitting on the brink of a financial abyss. This means that although holiday prices for British tourists are barely any lower than normal, they can take advantage of the desperation of Greek businesses in the face of such difficult times. Special offers abound throughout Greek resorts as businesses fight for their share of vital tourist income. So, the combination of the weak Euro and the intense competition amongst desperate Greek business owners can make for a very cheap time, for UK tourists going to the resorts at the moment. To a lesser degree, similar situations can be found in other Euro Zone countries such as Spain, Portugal, Italy and Ireland.

The Effects of a Weak Euro on the UK Tourism Industry

Unfortunately, the weak Euro has the opposite effect on tourists that would normally come to the UK for a holiday or a short break. They are finding it increasingly expensive, when they look to convert their ailing Euros into UK Sterling. If the Euro continues to decline against the Pound, many who may have previously have come to the UK from Euro Zone countries, could give it a miss and choose destinations within the Euro Zone so that they have no worries about exchange rates.

Wider Considerations

Another factor to consider is the effect the increasing uncertainty about the Euro has on the confidence of the would-be traveller. The issues being raised by the Euro’s uncertainty is also spreading an element of fear amongst holidaymakers. Since the financial gloom descended upon us some several years ago, quite a number of holiday firms and airlines have gone to the wall. The crisis facing the Euro only makes it more likely that other operators will fail before too long.

Only recently, holiday giant Thomas Cook needed a £200 million bail out, after seeing its shares slump dramatically as bookings fell by a third at the end of 2011. The effect this will have on the wider tourism industry has yet to be realised, but a struggling Thomas Cook can hardly help consumer confidence in them, or any other tourism operator for that matter.

Summary

So, while the Euro weakening against the Pound may be great for UK tourists going to the Euro Zone in the short term, it may not be such good news for the industry as a whole as the crisis deepens. A lack of tourists visiting the UK could be to the detriment of our economy as a whole, which could mean that UK consumers may not have the disposable income to take advantage of the strong Pound on holidays abroad in the future.

Guest post provided by ITC Classics luxury holidays, for holidays with a touch of class.

Tags: abyss, better time, british tourists, british travel agents, brits, cheap time, difficult times, euro zone, greek business, greek businesses, greek resorts, holiday prices, indust, intense competition, rise and fall, single currency, tourism industry, uk tourism, uk tourists

Category: Travel Tips