The number of overseas visitors to the UK dropped 5% between April and June this year, forcing hotels to raise their room rates, official figures revealed today.
The number of foreign tourists fell to 8.1m during the quarter, although the level of spending remained constant at £4.1b, according to the Office for National Statistics (ONS).
Over the same period, the number of visits abroad by UK residents decreased by 1% to 17.7m compared with the previous quarter, with spending falling by 2% to £9.1b.
During the 12 months to June 2008, the number of visits by foreign tourists to the UK fell by 3% to 32.5m (2007: 33.5m).
Tim Helliwell, head of hotels at Barclays Commercial Bank, said the fall suggests that the previous quarter's positive increase was a "short-lived boon".
"Hotels in London are offsetting this fall in occupancy with price increases of around 5%, which is protecting their margins for the moment.
"Some hoteliers have reported good trading in June and July, especially those with up to date product, which is allowing them to buck the downward trend and increase their price premium.
"However, regionally, prices are standing still and hotels are feeling the cost pressures more keenly."
Helliwell said the industry has become affected by last minute bookings, unpredictable weather and the economic uncertainty adding that many hoteliers would be looking the remainder of the year with "some nervousness".
By Gemma Sharkey
E-mail your comments to Gemma Sharkey here.