Job losses and failing businesses forecast by Christmas

The British tourism industry will lose more than £2bn as a result of the terrorist attacks in America and foot-and-mouth disease, the British Tourist Authority said yesterday.

The BTA said there was likely to be a 15-25 per cent fall in visitors from long-haul destinations such as America and the Far East. This predicted slump in the last quarter of this year means that spending by overseas visitors in Britain – originally forecast at more than £13bn for 2001 – was now likely to be about £10.8bn, a drop of nearly 17 per cent. About £900m of the shortfall would be due to the terrorist attacks.

The BTA chairman, David Quarmby, warned that up to 75,000 jobs out of the 400,000 directly related to foreign tourism could be lost. However, he stressed that these forecasts had assumed no further escalation in international tension and no further airline cuts, which could cause an even more serious downturn.

Richard Tobias, chief executive of the British Incoming Tour Operators Association, said: "Some businesses will fail, some people will lose their jobs, and it looks like a pretty bleak Christmas."

London

Attractions such as the London Eye ferris wheel and the Buckingham Palace state apartments are without their usual queues of visitors. Madame Tussaud's, which usually has an average of 7,000 visitors a day, is down to about 4,000 a day.

Richard McKitty, sales supervisor for the Original Tour company, which offers two-hour bus tours of London, said: "There has been a massive reduction in ticket sales, probably as much as a 50 per cent drop. We have had to cut services. Morale is very low."

Bath

Hoteliers and tourism officials estimate that there has been a fall of up to 20 per cent in the number of overseas visitors.

Bath is a favourite destination for American tourists eager to see its Roman baths and Georgian architecture.

Peter Rawlins, Bath's marketing manager, said: "Our hotels have seen a rise in cancellations and a slowdown in inquiries, both for business and leisure.

"Although the downturn has come mostly from North America, other countries have also been affected, demonstrating that the loss of confidence is more widespread that just within the USA.

"The only area of possible optimism is that there are indicators of a possible growth in UK domestic tourism. A lot of people who had been planning a break overseas have decided to stay in the UK."

Stratford

The number of visitors to the home of William Shakespeare has fallen by up to 25 per cent.

Nick Walsh, of the Shakespeare Birthplace Trust, said: "We had thought that the downturn as a result of foot-and-mouth had stopped and we were beginning to see the first signs of a recovery in the last days of August but that has now been turned on its head.

"At the moment we are about 25 per cent down, although it varies. We would normally expect a quarter of our visitors to be from the States and such a drop is going to seriously affect us," he said.

"Roughly speaking, our visitors are divided 50-50 between domestic and overseas, of which the biggest single market is the USA. We have had a number of tour groups cancel and a number of VIP parties pull out as a result of the Ryder Cup being postponed."

York

The city usually receives some 500,000 American visitors a year but hotels such as the Holiday Inn are reporting a 50 per cent drop in US trade and a fall of two-thirds in American group bookings.

The consequences of the American terror attacks are far-reaching, from the cancellation of a major Ryder Cup dinner at the expensive Dean Court Hotel (the golf event has been postponed because of the attacks) to the abandonment of a five-day conference at the Grange, in Clifton, because most of the delegates, from the Middle East, were unwilling to fly.

The only consolation for York is that the effects of foot-and-mouth on US trade had already forced the local tourism bureau to concentrate on winning domestic tourists through city break offers. The Yorkshire Dales have struggled even more.

Bookings from the US have entirely dried up at small guest houses, such as the central Ascot House, where four or five e-mailed inquiries a day were still being received before the attacks. None has been received since.

Lake District

The region has experienced a dramatic fall in custom from the US – it is the Lakes' biggest foreign market, bringing in 250,000 visitors a year who spend an estimated £64m. Although no figures for all of Cumbria are available, the Holbeck Ghyll, a top-class hotel that overlooks Lake Windermere, reported receiving about 10 US cancellations, which alone equates to more than £1,000 in lost room-rate revenue.

But the Lake District is experiencing a remarkable upsurge in business from UK holidaymakers reluctant to fly overseas. Fredericka Johns, sales and marketing director of the Langdale Hotel in the Langdale Valley, reported that overall trade had actually gone up by 10-15 per cent in the last two weeks. "It has turned a miserable year [because of foot-and-mouth] into one in which we are ahead of budget. It is a miracle," she said. The picture was confirmed by the Lake District Tourism and Conservation Partnership. "Anecdotal evidence is definitely of increased bookings," said one of its officers, Kirsty Royce.

Edinburgh

The Palace of Holyrood, the Queen's official residence in Scotland – which is usually full of American tourists at this time of year – has seen visitor numbers plummet.

Traditionally, royal palaces attract a disproportionate number of US tourists and officials say numbers have fallen by 22 per cent in the last two weeks.

Frances Dunkells, a spokeswoman for the Royal Collection at Holyrood, said: "There were a lot of cancellations at the start of the year because of foot-and-mouth but in the aftermath of the New York attack there have been even more."

At Edinburgh Castle officials have recorded a 21 per cent shortfall in visitor numbers. As one of the country's most prominent attractions, the castle usually has more overseas visitors than anywhere else in Scotland, accounting for about two-thirds of all admissions to tourist sites. But only 22,302 people visited last week, compared with 29,611 in the previous seven days.

Four corporate hospitality packages organised by American companies aboard the royal yacht Britannia have been cancelled in the past week.

Highlands

At Culloden battlefield near Inverness, where the Jacobite rebellion of 1745 was crushed, the number of visitors has dropped 17.1 per cent. "We have had at least three group bookings cancelled, which have been blamed directly on the bombings," said Ross Mackenzie, the site's manager.

Urquhart castle, on the banks of Loch Ness, has reported a fall of 17.8 per cent. Likewise, Fort George was down 12.3 per cent and Inverwe Gardens has seen a shortfall of 13 per cent.

Skibo Castle in Sutherland, which provides exclusive golfing holidays for corporate clients and celebrities such as Jack Nicholson and Michael Douglas, is also feeling the strain, losing about £400,000 in cancelled bookings.