UK tourism sector booms as sterling falls

Tourists outside Buckingham PalaceImage copyright Getty Images Image caption Buckingham Palace is one of London's many tourist attrations

Tourism has been one of the most successful parts of the UK economy recently, thanks in part to Brexit.

The weaker value of the pound since the Brexit referendum vote means that the UK is now a much cheaper destination than it used to be.

Many mainland Europeans, Americans and Chinese people are taking advantage of that.

That's clear from the cacophony of different languages and accents outside Buckingham Palace, and on the streets around the Palace of Westminster.

"It's a little more economical than it was a few years ago," says one visiting American tourist.

"Thanks to the euro, London is not more expensive than in France," a French tourist adds.

Meanwhile, a German man said the euro-pound rate has "made me quite happy".

Image copyright Getty Images Image caption The fall in the value of the pound has made the UK a cheaper place for overseas tourists

Two-thirds of the international visitors enjoying London's sites, Cornwall's beaches and Edinburgh's Royal Mile are from the rest of the European Union.

The tourism agency VisitBritain forecasts there'll be a 6% rise in the number of international visitors in 2017, with large numbers coming from France in particular.

VisitBritain's director Patricia Yates says:"The currency is in our favour.It might motivate more people to come."

Numbers game

The tourism boom was helped by the Olympics in 2012, a showcase for Britain's historic towns, picturesque villages, and stunning national parks.

The latest data from Forward Keys, which monitors flight bookings, suggests international arrivals to the UK will be 9% higher for August to October this year compared to the same period of 2016.

Image copyright Getty Images Image caption The 2012 London Olympics helped spark a rise in the number of visitors to the UK

Bookings from China are up 20%, and those from the US are 23% higher, the data suggest.

There aren't just more tourists, they're also spending more when they're in the UK.

VisitBritain predicts tourists' spending will surge by 14% this year.

"Very often people budget in their own currency.They're getting more pounds for their money, and we can see their spend going up," says Patricia Yates.

Sterling has tumbled 16% against the euro since the June 2016 referendum, and has fallen 23% against the US dollar.

Over the past two years, the pound has dropped about 30% against the euro.

"There are some factors putting downward pressure on the pound, and some other things putting upward pressure on the euro," says Paul Hollingsworth of Capital Economics.

Image copyright Getty Images Image caption The weaker pound makes shopping in the UK more affordable for overseas tourists

He lists the downward forces on sterling as "Brexit and uncertainty about the UK's future relationship with the EU, the economy...and the expectation for interest rates".

"We've seen quite a Brexit bounce," says Jace Tyrrell from the New West End Company, which represents shops on London's Bond, Oxford and Regent Streets.

As shoppers carrying bags from all sort of stores rush by on Regent Street, Mr Tyrrell says, "In the past six months, there's been a 36% increase in spend here, so certainly international visitors are appreciating the value depreciation".

Stores report sales of pricey jewellery and high fashion items have been rising the most.

'Golden age'

The large American hotel chain, Hilton, has 138 hotels in the UK, and is planning to open 30 more, partly because of the tourism boost spurred by the fall in sterling.

The company says it has seen double-digit growth in the UK over the past year.

Image copyright Getty Images Image caption VisitBritain says overseas numbers will rise 6% this year

In the lobby of one of its swanky London hotels, Simon Vincent, Hilton's president of Europe, the Middle East and Africa, says we're living through a "golden age of travel".

Another factor behind the company's British expansion is demand from UK customers, as "staycation" becomes more popular.

"The domestic customer has always been an important part of our business mix, particularly in our portfolio outside of London," says Mr Vincent.

"In fact, it's the most significant proportion of our business.It's been growing well."

Bargain basement Britain?

Despite "Brexit bounce", the sharp increase in tourist numbers began before the sharp drop in the pound, and the industry says it isn't relying on currency depreciation to increase numbers further.

"We operate in a competitive global environment," says VisitBritain's Patricia Yates.

"We will never be a cheap destination, we don't want to be.We have to offer good value for the prices we're charging," she says....

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Visits to UK rise amid fall in pound

Tourists outside Buckingham Palace watching as guardsmen take part in the Changing of the Guard in central LondonImage copyright AFP

The number of overseas residents visiting the UK rose to 3.5 million in June, up 7% from the same month last year, according to official figures.

While in the UK, the visitors spent £2.2bn, a rise of 2%, the Office for National Statistics (ONS) said[1].

The increase comes as the weak pound makes the UK more affordable for visitors, but also follows terror attacks in London and Manchester.

Meanwhile, UK residents took 7.2 million trips abroad, a 4% increase.

And despite the fall in sterling they spent £4.6bn - 15% more than the same time in 2016.

April saw a record 3.7 million overseas visitors - up 19% from a year earlier - as the fall in the value of the pound made the UK a more attractive destination.

Over the April-to-June quarter the number of visitors from overseas rose to 10.75 million, up 8% from the same period a year earlier....

References

  1. ^ the Office for National Statistics (ONS) said (www.ons.gov.uk)

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Kit Kat accused of copying Atari game Breakout

kit katsImage copyright Reuters

Kit Kat's maker Nestle has been accused of copying Breakout, the 1970s computer game, in its latest marketing.

Atari, the company behind some of the most popular early video games, has filed a suit alleging Nestle knowingly exploited the game's look and feel.

Breakout was created as a successor to "Pong" by Apple founders, Steve Wozniak and Steve Jobs.

The advert shows[1] a game similar to Breakout but where the bricks are replaced with single Kit Kat bars.

In the advert, which is titled "Kit Kat:Breakout", a row of people, of varying ages and appearance, share a sofa and play a video game during their work break.In the game depicted a primitive paddle moves side-to-side to bounce a ball into a collision with the horizontal bars ranged across the top of the screen.

Atari alleges that the similarity with its original game "is so plain and blatant that Nestle cannot claim to be an 'innocent' infringer".

The legal complaint against Nestle, filed in a San Francisco court on Thursday, claims that the Swiss chocolate maker had hoped to exploit "the special place [Breakout] holds among nostalgic Baby Boomers, Generation X, and even today's Millennial and post-Millennial 'gamers'"....

References

  1. ^ The advert shows (vimeo.com)

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Wrestling bids to boost interest in China

Wrestler in mid-airImage copyright Getty Images

US-style professional wrestling is leaping off the top ropes and into the Chinese market.

From Friday, World Wrestling Entertainment (WWE) is making its video streaming service available in the mainland.

The part-sport, part soap-opera joins a long list of sports eager to tap into a new customer base.

Industry-watchers say finding local stars will be key to its success.

Local partner

WWE's service will be available through its Chinese partner PPTV, with subscribers required to download an app to access the content.

Past events have "received a great response from WWE fans in China," according to Godfrey Zeng, executive vice president of Suning Sports Media, parent company of PPTV.

China has held a number of WWE events over the years, and there's even a local WWE-style wrestling organisation, but this is the first time an entire channel devoted to WWE will be available.

The network will feature WWE's major live events and original series, as well as reality shows and classic matches.

The organisation is kicking things off by making one of its marquee events SummerSlam, which takes place on Monday, available live in Mandarin.

Crowded market

Sports ranging from mixed martial arts to Australian rules football have all been trying their luck in China.

Image copyright Getty Images

Other sports have managed to capitalise on the success of Chinese stars.

The country's huge population means that most organisations would only need a small share of the market to see a return on their investment, but some industry watchers caution that it's not as easy it might seem.

"Everyone's trying to break into China, and you've all got those much more established sports.Then you've got things like rugby, and combat sports and they're all trying to compete for the same demographic," said Mark Dreyer, who runs the Inside China Sports website.

Two-time grand slam champion Li Na[1] helped to make tennis more popular, while Chinese NBA star Yao Ming[2] made a huge difference to basketball's popularity....

References

  1. ^ Li Na (www.bbc.co.uk)
  2. ^ Yao Ming (www.bbc.co.uk)

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Alibaba surges while Walmart stalls

Alibaba signImage copyright Getty Images

Online retail giant Alibaba has again reported strong earnings, posting a 56% rise in quarterly revenue.

Net income grew by 94% to 14.7bn yuan ($2.2bn;£1.7bn;) for the three months ending June 30, compared to the same period last year.

The performance is in sharp contrast to US big box retailer Walmart, which posted a 23% drop in net income.

Analysts say the two results reflect both a global shift towards e-commerce and a broader shift towards Asia.

Alibaba's surging earnings

Investors have shown unbridled enthusiasm for Alibaba this year.The company's shares were up 5% on the results, and they are up 81% this year.

While these numbers seem almost unbelievable by US or European standards, some analysts think there's still plenty of room for growth.

"That's the challenge evaluating these companies because the market dynamics are so different than in the US and Europe," said Ben Cavender, from China Market Research Group.

He says e-commerce still only accounts for about 15% of the total retail market in China, so there's still plenty of untapped potential.

Image copyright Getty Images

Walmart plays catch-up

The news isn't all bad for the once-dominant retailer.

Store traffic is higher, but profits were down, in part because Walmart is spending money to keep pace with rival Amazon.

Walmart's US stores saw a 1.8% rise in sales compared with the second quarter of last year.

Still, its net income fell 23.2% to due to aggressive spending on e-commerce as well as costs of $788m connected to a one-time debt payment.

The Amazon in the room

Both companies are in competition with US ecommerce giant Amazon, which has also seen significant growth in the last year.

But while Walmart is directly squaring off against Amazon, Alibaba's chief executive, Jack Ma, has made it clear that he's not relying on the US market for the company's growth.

And while Amazon has a presence in China, it hasn't made huge inroads.

"They don't have the funding, they don't have the brand recognition.They don't have the product that people want at the end of the day," said Mr Cavender.

On its home turf, Alibaba might be more worried about Walmart, which has a significant bricks-and-mortar presence, and has also formed an alliance with Alibaba's local rival JD.com

Battleground South East Asia

South East Asia, with its rapidly expanding middle class, is shaping up as the next battleground for global e-commerce giants.

"All of these players are looking at where the emerging spending growth is coming from," said Mr Cavender.

Amazon Prime has dipped its toes into South East Asia by setting up shop in Singapore.

Alibaba has opted for a different route by partnering with established local players.

In June, it invested a further $1bn in Singapore-based e-commerce platform Lazada Group, and on Thursday it revealed it had invested $1.1bn in Indonesia's Tokopedia....

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