More than 25 million people visited London last year contributing £16.6 billion pounds of business making the travel related property sector such as condo-hotels and holiday apartments a good buy.
But rising inflation, faltering consumer confidence and the credit crunch is biting. 'Economic conditions have deteriorated badly since May with business and consumer confidence weakening significantly,' said Visit London, the city's tourism authority.
'We now expect overall visits to fall by 2.7% in 2008 and by 1.2% in 2009. Visit spending is anticipated to grow by less than inflation in both years,' it said in its latest quarterly report.
'Although strong visitor growth since 2005 does mean London is facing this slowdown from a position of relative strength, there are significant risks that this slowdown could be more severe than predicted,' the report added.
The decline is visible in both domestic and international visitor numbers. The downturn is most marked from the United States with a weak Dollar constraining Americans' ability to travel and spend freely.
While the Euro has strengthened against both the Dollar and the Pound, the increase has not been enough to entice substantially more European visitors and offset the decline in numbers from across the Atlantic.
The hotels and accommodation sector are witnessing weakening trade and future booking levels are described as 'soft'.
Visit London expects total visitor numbers to decline to 24.8 million in 2008 and 24.5 million in 2009. The figures register those who stay overnight, not day-trippers.
Japanese and American visitors are both expected to fall this year, while numbers for Russian, Indian and Middle Eastern tourists is expected to increase giving some hope to those who can target these markets.
