Dollar slide spurs British invasion

NEW YORK (CNNMoney.com) -- The U.S. currency is king no more, but not everyone is spilling tears over the dollar's decline.

One clear winner from the falling dollar: The $518 billion U.S. tourism industry. A weak dollar makes it more expensive for Americans to jaunt to London or other parts of Europe, but it also makes the U.S. a bargain destination for visitors from overseas.

That's crucial for the travel and tourism industry, which is a major force in the service-oriented U.S. economy. The industry's contribution to the economy ranges from 4 percent to 11 percent, depending on how broadly the sector is measured, according to a recent report from the World Economic Forum.

The dollar has declined against the pound the last five years, but just how far it's fallen came into sharper focus this week, when the British currency rose above $2 for the first time in nearly 15 years. The euro, meanwhile, is at a two-year high against the dollar. (Watch why the dollar could keep getting weaker -- 1:59)

Fueled by the strength of their currency, European travelers have flocked to the United States in recent years. British tourists, in particular, have descended upon U.S. shores with the aim of relaxing and enjoying their buying power.

"It's very popular for them to come over on these big buying trips. You can't blame them, it's so inexpensive for them," said Chris McGinnis, editor of Expedia Travel TrendWatch.

International arrivals from the U.K. hit 4.2 million last year, according to the Commerce Department's Office of Travel and Tourism Industries. And when Canada and Mexico are excluded, more international arrivals to the U.S. originated from the U.K. than anywhere else last year.

In New York City, the most popular destination for travelers from the U.K., the large influx of British travelers over the years has even helped drive a campaign to formally name a neighborhood in the heart of the city "Little Britain."

The British invasion has helped support travel and tourism in the U.S., since visitors spend money on everything from hotel rooms to restaurants, Broadway shows, concerts and other attractions.

It isn't only New York that has benefited from the surge. Other popular destinations for European tourists include Orlando, Las Vegas and San Francisco, according to the Commerce Department.

The average European spends about $1,500 a person on a trip here, according to Allen Kay of travel industry group TIA, formerly known as the Travel Industry Association of America.

The steady stream of tourists has been crucial for the tourism industry, which has struggled since the September 11 attacks, he said. More stringent travel restrictions have hurt the industry. Overseas, perceptions of the U.S. have also weakened, adding to the problem.

"The value of the dollar has been bailing us out for the past few years. I don't know where we would be if we didn't have the huge advantage of being a real bargain for U.K. visitors," Kay said.

But while the number of visits from British tourists has held above the 4 million mark for the past three years, arrivals appear to have peaked. Total visits actually slid 4 percent last year from 2005.

"Preliminary data indicates that the growth in U.K. international travel is shifting from North America to intra-EU, Asian, Middle East and Oceania markets," the Commerce Department said in a recent report analyzing travel trends.

The dollar's further decline, then, perhaps couldn't come at a better time - at least for the tourism industry.