Sterling is set for another rocky year on the international exchange markets and could achieve parity with the euro.
Speaking at the Tourism Society Prospects for 2010 event last week, VisitBritain head of research and forecasting David Edwards said ongoing economic issues on the Continent, including Greece’s continued difficulties, will impact the pound.
He said: “Sterling is still going to remain weak throughout 2010. It could be a very interesting year for exchange rates.”
Edwards’ comments were supported by Worldchoice chairman Colin Heal who added: “All the indications are that the pound is not likely to increase against the euro, indeed, if interest rates are raised [in the UK] it is possible that it may even succumb to parity.”
Edwards said ongoing currency problems could help drive domestic tourism this year following its success last year. In 2009, 20 million Brits took a domestic break compared with eight million in 2007.
He said: “Domestic tourism will remain strong, but we’ll need to really stay on top of it if we are to beat the exceptional growth we saw in 2009.”
Heal added trading will remain difficult in 2010 for agents with the economy, unemployment and the looming general election all depressing the market.
He predicted a further decline in visitor numbers to the US, although both Egypt and Turkey will remain popular with Brits.
British Air Transport Association secretary general Roger Wiltshire said the UK will be slower to recover from the recession than both Europe and the US; UK air passenger traffic fell 10% in 2009.
Meanwhile, Royal Caribbean Cruise Line associate vice-president and general manager UK and Ireland Jo Rzymowska predicted a 6.5% increase in UK cruise passenger numbers to 1.65 million for 2010, with sailings from UK ports remaining particularly popular after 700,000 consumers used them in 2008, compared with 300,000 in 2002.
She added: “The majority of cruisers want to go out of the UK as they don’t want [to go to] airports, they can take more luggage and it’s more convenient.”
Rzymowska admitted the cruiseline had suffered following a single digit drop in onboard sales as people tighten their belts. She said: “This is probably an area where people have slightly cut back. The other area is extra excursions.”