Hoteliers and tour operators fear that tourists' spending levels in the UK will decrease even further, despite predictions that visitor levels will increase.
The concerns were highlighted by 300 hoteliers and tour operators at the European Tour Operators Association's (ETOA) Hotelier's Marketplace last week.
Attendees forecast that spending levels would remain stagnant or decline compared with 2004, despite some estimates that 10% more tourists would visit the UK.
The situation was attributed mainly to rising costs in the UK and the weakness of the US dollar, but the threat of terrorism was also a factor.
Tom Jenkins, executive director of ETOA, said: "The industry responded to the market collapse caused by the terrorist threat by slashing prices to attract people over here.
"But the weak dollar means when those tourists get here it seems very expensive, so they don't spend, as they are price-sensitive customers."
He added: "Europe is also competing with the USA for Asian clients, as both are perceived as culturally Western and are attractive because of the shopping, but the USA is now almost half the price of Europe."
by Emily Manson
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