Number of visits from overseas drops 2.7% to 31.9m, as Britain’s tourism spending deficit widens to a record £20.5bn

The number of overseas visitors travelling to the UK on holiday or on business has fallen for the first time in seven years – although in a boost for the tourism industry, they are spending at record levels.

British tourists also made fewer visits abroad last year, confirming the trend of “staycationing”, or holidaying at home, as a result of the credit crunch. Britons venturing overseas in the recession are choosing to visit the perennial favourites Spain and France, followed by the US, the Irish Republic and Italy.

The figures for 2008, published today in the annual Travel Trends report from the Office for National Statistics, showed there were 31.9m foreign visits to Britain last year, a 2.7% fall on the previous year.

This was the first drop since 2001, when a combination of the outbreak of foot and mouth disease and the September 11 attacks in the US led to a dramatic slump.

The figures are compiled from the ongoing international passenger survey, involving interviews with more than 250,000 people a year travelling to and from the UK via major airports, ports and tunnel routes.

Tourism chiefs blamed the global economic crisis, which started to bite in earnest in the autumn, as a factor for the fall. The decline was most severe in the last quarter of 2008, when visits fell by 13%.

Overseas visitors spent a record £16.3bn in Britain in 2008. UK residents made 69m visits abroad, down 0.6% on 2007, with the downturn most marked in the last quarter, when the figure fell by 9%. At the same time, UK visitors spent a record £36bn overseas, leading to a record tourism deficit of £20.5bn.

David Savage, a co-author of the report, said: “Spending in the UK is holding up very well. The increase in spending is due to the exchange rate. People will come here with a budget and the difference works in our favour.”

London remained by far the top destination for overseas visitors, with 14.8m trips to the capital last year. Edinburgh had 1.2m visits, Manchester 900,000, Birmingham 800,000 and Glasgow 600,000. Visits to the UK were divided evenly between those on holiday, those visiting friends and family, and people on business trips.

After a sharp drop in visits from the US (3m, down from 3.6m in 2007), France took first place in the table of countries whose residents made the most visits to the UK. The Irish Republic rose to second. But the big spenders were the Americans – who splashed out a total of £2.2bn, representing 14% of all spending by visitors.

Sandie Dawe, the chief executive of Visit Britain, the national tourism agency, said: “The decline in visitor numbers in 2008 was certainly not unexpected. The figures illustrate the continuing challenges of maintaining Britain’s popularity as a destination as the global economic downturn began to bite and in the face of increasing competition from rival destinations.”

She said there were positive signs for the start of 2009, with a weak pound bringing “value for money that other countries cannot match”.

She added: “However, we still expect 2009 to be equally challenging and will be doing all we can to remind international visitors of the many quality experiences they can enjoy here.”