The 26-year high of the pound against the dollar is offering the trade a silver lining as tax and interest rate rises begin to bite.
With the pound breaking the $2 barrier this week, US operators and agents are expecting renewed interest in the destination after a slump in visitor numbers blamed on tough immigration controls and tax hikes.
Funway Holidays managing director Stephen Hughes said: “It’s the one positive we have had this year. It’s been tough.
“Consumers are preoccupied with interest rates, general taxation increases and Air Passenger Duty, which have held back a positive surge thus far.”
The trend is for customers to book upmarket holidays, he added. “People are not necessarily looking at cheap options.”
Premier Holidays product and reservations manager US, Canada and the Caribbean Heidi Blades agreed bookings were being driven by the top end of the market, with tailor-made sales up 6% while shopping trips to New York are up 7% .
She added: “We are seeing bigger spends and longer durations. I hope this will last but it’s a bit early to say.”
Meanwhile, multiples have taken advantage of the exchange rate to push currency sales.
First Choice foreign exchange operations manager Richard Turner said “Many clients have taken advantage of the opportunity to ‘forward buy’ dollars at the high rates. Now that the pound has hit the $2 mark, we are calling clients to give them the opportunity to save on their holiday money purchases,” he said.
- The Bank of England voted to keep interest rates at 5.25% this week after a series of rises.
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