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Tale of Two Cities: The Strength of the Pound Against the Dollar Has Made
 a Christmas Spending Spree in the Big Apple a British Traveler's Paradise;
London Extremely Expensive for American Travelers

By Hugo Duncan, Evening Standard, LondonMcClatchy-Tribune Regional News

Nov. 8, 2009 -- There has never been a better time for the British to go shopping in New York -- but for Americans there has rarely been a worse time to visit London.

The strength of the pound against the dollar has made a Christmas spending spree in the Big Apple a British bargain hunter's paradise.

But it has made London ever more expensive for American travellers who have seen the cost of visiting the capital soar in the last 12 months.

It is a tale of two cities and put simply, the greenback is being pummelled and Americans are struggling to keep up.

"It's just killing us," said Jon Herman, a pensioner from Idaho who makes a daily trek with wife Dinah from a Pimlico hotel to the local Post Office to change their currency.

"Every day we come back here we're getting less and less. We're only changing a little bit at a time because we're on a budget and we're hoping the dollar will improve but it just keeps getting weaker. We're already having to change our plans and scale down what we wanted to do."

Visitor numbers and booking levels among Americans are down and shopkeepers, restaurateurs, hoteliers and taxi drivers who have long benefited from big-spenders from across the Atlantic are all feeling the strain.

"The value of the dollar is a concern to the tourist economy in London," warned James Bidwell, of Visit London, although an influx of wealthy visitors from Russia, eastern Europe and the Middle East has softened the blow.

The pound has risen 11 percent since November last year from $1.90 to more than $2.10 -- its highest against the greenback since 1981, more than a decade before sterling bounced out of the European Exchange Rate Mechanism in 1992. Tourist rates are even less favourable for visitors with US dollars. An American exchanging $100 on the High Street can expect to get back around £43 to £46, while the return at airports such as Heathrow can be worse.

Not only have Americans suffered a loss of spending power, but they have also had to deal with inflation-busting price hikes to travel around the capital by Tube. Cash fares for a single journey in Zone 1 have gone up from £3 to £4 since last year -- a massive rise of 33 percent in sterling but 47 percent in US dollars. Paying by Oyster Card is cheaper, as Transport for London regularly points out, but while some tourists take advantage of the discounts, many still pay by cash.

Small price hikes at attractions such as the London Eye and Tower of London have also been made harder to bear by the strength of the pound against the dollar. Shopkeepers have also been hit.

Malcolm Pinkerton, a business analyst at the London Retail Consortium, said: "There are fewer American tourists here than in recent years and the ones that are here have weaker spending power and are spending less.

"Russians and visitors from the Middle East were here during the summer but have now gone. You would usually be getting Americans here now but the numbers are down. You also have to consider the current economic climate in the US and the current consumer climate, which is very weak. They are cutting back spending and now that the dollar is so poor they have been put off visiting Britain even more so."

The dollar has also tumbled against a host of other currencies. The euro is at record highs against the US currency making travel from mainland Europe to Britain increasingly expensive for Americans.

But it is not all doom and gloom -- London is still a top destination for travelling Americans and the recent NFL match at Wembley between the Miami Giants and New York Giants tempted nearly 10,000 over the Atlantic.

"Despite the value of the dollar, America is still the number one market for overseas visits to London," said Bidwell, of Visit London. "Last year was a near all-time high for spending by US visitors to the city so we know we're still the destination of choice."

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To see more of the Evening Standard, or to subscribe to the newspaper, go to http://www.thisislondon.co.uk.

Copyright (c) 2007, Evening Standard, London

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