Visitor numbers in London have declined as tourists prioritize Europe for VAT free shopping. Photo: Jason Alden/Bloomberg
At the sumptuous Indian restaurant Mayfair Benares, this week should have been a time for celebration.
“Our Michelin plaque has just arrived,” proudly says Samir Taneja. This is the second time that the chef, regarded as one of London's brightest culinary names, has received one Michelin star.
But Taneja thinks of something else. “The owner has to take the hit on some of our dishes,” he admits.
Benares, like other high-class restaurants, is not immune to a sharp increase in food prices. Taneja was reluctant to offer higher prices to customers for fear that they might scare some off altogether.
These efforts may be in vain.
“When I hear that foreign visitors are going to other European countries because of regulations like tourist tax, I really get worried,” says Taneja. «We were hoping it would be a great summer for us.»
Now he is less confident.
Restaurants and retailers in London are beginning to feel the same pressure as politics begin to dampen demand for travel to the UK capital.
Elsewhere in Europe, cities are getting bigger and bigger. crowds.
While the number of tourists arriving in the UK fell by almost a quarter last year, France has seen a sharper increase, with the number of visitors to Paris only 13% lower than in 2019.
Such countries Like Italy, Spain and Portugal will see record tourism revenues this summer.
How the UK lags behind its European competitors
Martin Williams, chief executive of M Restaurants, which runs the Gaucho chain, says it's no surprise that restaurants like Paris and Milan look «infinitely more appealing and accessible.» tourists.
For months, industry leaders have been urging the government to reintroduce tax-free shopping for foreign visitors.
Ministers cut relief when the UK left the European Union, saying it would save the Treasury 2 billion pounds sterling per annum and have a limited impact on costs.
However, many rely on income from tourists that the move was scored over its own gates.
According to Global Blue, US tourist spending in France and Spain has more than tripled this year compared to the same period in 2019. Spending in the UK rose by just 1% over the same period.
The reasons are easy to understand.
Visitors to Paris, where foreign tourists can still shop without VAT, can save hundreds on buying a new Gucci or Yves Saint Laurent bag, or thousands on jewelry. Many people choose this.
Tourism falling behind
Even British tourists are now going abroad for their luxury goods, Burberry reported earlier this month, shopping in countries where they can also benefit from VAT schemes.
Number weekend and holiday trips from London to Paris on Eurostar are now 15% higher than in 2019.
But the problems for London go much deeper than just the tourist tax.
Williams says the mayor of London and the government as a whole «have found themselves completely out of the loop when it comes to understanding how to make the capital attractive for both domestic and international tourism after the pandemic.»
For those looking for a city break, the cost of a trip to London has never been higher.
At high-end restaurants, £200 per person is now the norm for customers, up from £100 in 2017, as food inflation and staff costs drive up prices, according to guidebooks. .
The Telegraph's analysis of London's two- and three-Michelin-star restaurants shows that the average tasting menu costs £191.
2605 UK Inflation
Once considered a much more expensive city to dine in, the gap between it and London has begun to narrow, although visitors to the British capital remain far less open to higher prices.
“London is not Paris, it is not Tokyo and never will be,” chef Jason Atherton said last month as he slashed prices on his own menu for fear the British would not come.
Fares to London are also on the rise. The UK capital was named the second most expensive city to drive last year, behind only Hong Kong, simply because of fuel prices and traffic jams in the city.
Combined with policies to reduce emissions and reduce traffic, such as the Sadiq Khan Ultra Low Emissions Zone (Ulez) and congestion fees, the cost of driving a car in London has skyrocketed.
3005 London's most expensive driving
The regime has helped create «ghost towns in central London,» the chief executive of furniture retailer Heal's said last month. “I make no secret of it,” said Hamish Mansbridge.
“We are seeing a significantly lower number of visitors than before the pandemic, and this is a problem. You have congestion fees, parking difficulties, subway strikes, train strikes, a cost-of-living crisis, and then Ulez.
«You call it like they're actively trying to discourage people coming downtown London.”
Mansbridge correctly suggests that public transport is becoming a less attractive mode of travel.
Earlier this year, travelers were hit by a 5.9% increase in average train and underground fares, the biggest rise in London transport in over a decade. This has cemented the UK capital as the most expensive place to use public transport in Europe.
ULEZ expansion plan in London
Such an increase may not alienate wealthy foreign visitors, says one retail insider, but many luxury goods stores have become dependent on UK visitors since the pandemic. These buyers may find it cheaper to fly to Europe for a short break.
“Just look at the posters that French department stores put up here, focusing on the British,” says the head of retail. “And the depressing thing is that it affects restaurants, hotels, car rentals, all of that. We are losing it all.”
The recent wave of strikes is scaring away local tourists from visiting the capital.
Williams says that every day of strike — whether it's train drivers, subway workers or teachers — «costs the restaurant sector hundreds of millions of pounds in lost revenue.»
He warns that «the government has not been able to get involved and solve the problems that have arisen for six months.»
Ministers are under increasing pressure to look deeper into these problems as a whole .
Harrods boss Michael Ward has long been urging the government to develop a tourism strategy. “The lack of it is felt,” he says.
«Without serious thought on how to keep the UK as an attractive destination, we risk hurting the many different sectors that benefit from tourism spending.»
To Mayfair, Benares, Taneja hopes that this summer tourists will continue to visit its doors. “These are customers who book months in advance, so it’s not all that bad for us at the moment,” he says.
He admits that luck plays a role, but for now, praise helps him. “There are fewer people around,” Tanezha admits. “But for now, I think we manage to catch them.”
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