Big Ben clock tower, located at the Palace of Westminster and Parliament complex, is viewed from the London Eye on September 11, 2016, in London, England. The collapse of Great Britain appears to have been greatly exaggerated given the late summer crowds visiting city museums, hotels, and other important tourist attractions.
Big Ben, London George Rose—Getty Images

Thanks Brexit! Here's How Much Cheaper It Is for Americans to Visit the UK Now

Oct 05, 2016

This week the value of the British pound hit a 31-year low compared to the U.S. dollar, all part of the continued fallout of the UK's decision to leave the European Union. It's been predicted that Brexit, as Britain's decision to ditch the EU is commonly called, will result in deep discounts on everything from British exports to professional soccer players for those spending American dollars or euros.

In fact, it's simple for U.S. travelers to take advantage of the newly more valuable American dollar right now. Today, one British pound is worth $1.27. Two years ago in this month, by contrast, one British pound was worth $1.60. In other words, everything that an American tourist in the UK buys on a vacation nowadays—hotels, taxis, fish and chips, high tea, and so on—is effectively discounted by more than 20% compared to the same bills in 2014.

We did some math to show just how much less travelers would spend by visiting the UK today, rather than in the recent past.

3 Nights at 5-Star Hotel: $3,535 vs. $4,440

Travel & Leisure rates the The Stafford London as the best hotel in the city. As you'd guess, lodging doesn't come cheap. Scoping out some dates in the near future, we found that a couple staying three nights in a basic queen room would run a total of £858. That's the equivalent of $1,094 in U.S. dollars today. If you were paying the same amount two years ago, however, it would have been nearly $300 more: $1,373.

If you splurge on the Governors Suite at the Stafford, meanwhile, the cost would be £2,775 for three nights. That's equal to $3,535 today, but would have cost $4,440 with the October 2014 exchange rate.

Read Next: The British Pound is Getting Killed. You Should Care

Hostel: $34 vs. $42

Travelers staying in lower-end accommodations in the UK will get a less significant discount compared to those opting for top-notch lodging, but there will be some savings nonetheless thanks to the plummeting value of the British pound. At the Generator Hostel in London, for instance, we found rates of £26.40 per night for dorm accommodations, and £136 per night for a private room that fits three people. That's the equivalent of roughly $34 and $173 today, respectively, and would be $42 and $218, respectively, with the exchange rate from two years ago.

Afternoon Tea: $87 vs. $109

The best afternoon teas in London, as selected by the Telegraph, cost £35 to £68. The latter is the going rate for a special champagne tea at the Ritz, but note, the dress code before making reservations: "Gentlemen are required to wear a jacket and tie (jeans and sportswear are not permitted for either ladies or gentlemen.") At today's exchange rate, the range is the equivalent of $45 to $87, rather than $56 to $109 with the 2014 rate of exchange.

Burberry designer fashion store, New York
August Snow—Alamy

Luxury Fashion

The assumption is that the plunging value of the British pound will mean goods imported to America from the U.K.—including merchandise from luxury U.K. brands like Burberry and Ted Baker—will be significantly cheaper in the future. But there's so much up in the air at this point it's impossible to put a timetable on when British goods will get a price cut in the U.S. Nor can anyone truly guarantee that Brexit will actually result in broad downward pricing trends for Americans making purchases of U.K. goods on U.S. soil. Among other reasons that British merchandise not get cheaper in America, British companies that import materials to create their goods are likely to face higher production costs--and these costs will probably be passed along to consumers.

"Overall, there’s a lot that we don’t know, or can’t know, at this point," Mark Hamrick, senior economic analyst at Bankrate.com, said via email. "That includes how smoothly this U.K./E.U. divorce goes from here, whether other countries follow, what the terms are for both countries and the level of financial markets disruption."

What we do know for certain is that Americans visiting the U.K. (and much of Europe) immediately after the Brexit vote and, likely, at least over the next few months will see their spending power go much further on a wide range of service and merchandise, including the hottest luxury brands. Racked pointed out that shoppers immediately were the beneficiary of a discount of 10% or so in terms of American dollars in London's luxury stores if they were buying right after the Brexit vote.

Cadbury Creme Eggs
Anthony Devlin—PA Wire/AP

British Chocolate

For the same reasons cited above, shoppers utilizing the stronger power of the American dollar will see their money go further on classic tourist purchases like chocolate and tea if they happening to be visiting the U.K. right now. But there's a special reason British chocolate might be cheaper for consumers down the road.

As the BBC reported in early June, the E.U. requires that chocolate products contain at least 30% cocoa, compared to only 10% in the U.S. Pro-Brexit campaigners also argued that E.U. trade deals have resulted in tariff escalation, and that Easter eggs and other chocolates would be cheaper in the U.K. if Brexit happened.

The gist is that, if U.K. chocolates are allowed to be sold with lower cocoa concentrations, and if tariffs are removed in the post-Brexit world, British chocolate could be dramatically cheaper for the countries importing it, and for British consumers as well. Then again, the quality of the chocolate could be a lot lower too.

View of downtown Geneva and the iconic 'Jet d'Eau' fountain, a huge water jet situated in Geneva.
Allan Baxter—Getty Images

European Travel in General

Travelers have grown accustomed to bargain flights within Europe, but Britain's decision to leave the EU is likely to make it more difficult and expensive to hop around on the continent. Still, the overwhelming effect of Brexit for Americans is that travel to Europe will be much more affordable, simply because of the exchange rate heavily skewed in our favor.

As Travel and Leisure pointed out, the American dollar is roughly 20% stronger compared to the British pound at this time last year. That means that pretty much everything purchased by American travelers in the U.K.—pints at the pub, takeout food, museum admissions, hotels—just effectively got a fat price cut. The discounts are just as widespread, though not quite as steep, in countries where the euro is the currency.

This May 26, 2016, photo shows a home for sale in Carlsbad, California.
Lenny Ignelzi—AP

Mortgage Rates in America

Mortgage rates hit a three-year low just before the Brexit vote, and lenders began slashing their terms further on Friday amid plunging stock prices.

"Here in the U.S., mortgage rates were low before the vote and have since gone lower," said Bankrate's Hamrick. "That’s helpful for anyone in the market for a home purchase or contemplating a mortgage refinancing."

Estate agent's "Sold," "Let By," and "For Sale" signs stand outside a residential apartment complex in the Clapham district of London, U.K., on April 16, 2015.
Simon Dawson—Bloomberg via Getty Images

Real Estate in London

The devalued British pound, combined with general uncertainty in London and the UK, is being viewed as a buying opportunity by foreigners with interest in real estate in London and throughout the country. "There is clearly some bargain-hunting going on among people looking to take advantage of the currency change,” Fionnuala Earley, residential research director at Hamptons International, said to the Financial Times.

While many real estate agents report increased interest—and offers—for properties in London, others say several buyers have pulled out of deals at the last minute because of all the upheaval. Some investors are also now trying to renegotiate get lower prices and better terms on nearly closed deals.

Bottles of whisky on display in the Diageo Claive Vidiz Collection, the world's largest collection of Scottish Whisky on display at The Scotch Whisky Experience on September 3, 2015 in Edinburgh,Scotland.
Jeff J Mitchell—Getty Images

Whiskey and Wine

The U.K.'s whiskey makers don't need to import much of anything from abroad to create their product, meaning that going forward it's highly likely Scotland's heralded whiskey should be less expensive when it's imported to the U.S. "Whiskey prices will be cheaper," Miron Woinicki, a professor of international economics at Vanderbilt University, explained to Vice. "When the pound is going down in value in relative terms, the dollar will appreciate against the pound. So British goods will be less expensive. Scotland doesn't import anything to produce whiskey."

Meanwhile, years of a strong U.S. dollar versus the euro have meant that European wines are generally less expensive for American consumers. "The market for bottled wine imports [in the U.S.] shows rising import volumes and falling import expenditures and prices, which is what the textbook analysis would suggest for products with an inelastic demand," the Wine Economist explained earlier this year. As the value of the U.S. dollar continues to increase compared to the euro, its buying power will only grow as well.

Traders work on the floor of the New York Stock Exchange (NYSE) on June 27, 2016 in New York City. Markets around the globe continue to react negatively to the news that Britain has voted to leave the European Union. The Dow Jones industrial average was down over 200 points in morning trading.
Spencer Platt—Getty Images

Stocks

Generally speaking, Brexit and increased strength of the U.S. dollar are bad for U.S. companies that export goods abroad. This, as well as the overwhelming uncertainty in the stock market and the global economy, has resulted in a broad sell-off by investors that began on Friday and continued into this week.

The silver lining is that we could be in the midst of a terrific buying opportunity for investors. "This is a good time to work up a list of stocks that you wish you would have bought before they got too expensive," my MONEY colleague Paul J. Lim wrote. "Any significant drop in shares caused by geo-political jitters later this summer could signal an opportunity to pounce."

Alexis Sanchez celebrates scoring a goal for Arsenal, heading the ball past Wayne Hennessey whilst under pressure from Pape Souare of Palace during the Barclays Premier League match between Arsenal and Crystal Palace at Emirates Stadium on April 17th, 2016 in London, England.
David Price—Arsenal FC via Getty Images

Professional Soccer Players

Many of the world's top soccer players are imports to English Premier League teams, and it's these players who have effectively been hit with pay cuts thanks to Brexit and the devalued British sterling. "Foreign players converting salaries to their home currencies will notice they get less for the pound," the Associated Press reported.

"I think it's damaging for the Premier League," Cesc Fabregas, a Spanish national who plays for the league's Chelsea squad, said of Brexit. "It'll be harder to sign players, and the salaries will change if the pound gets close to the euro."

The flip side is that leagues and team owners outside of the U.K. now have a better chance of scooping up English Premier League players for less money. "From a spending standpoint, owners from around the globe won’t have to pay nearly as much for Premier League players," the International Business Times noted.

For that matter, it'll also be significantly cheaper for a foreign investor to buy a Premier League club as well. So if you ever wanted to own your own elite professional soccer team, here's your shot.

Burberry Coat: $1,651 vs. $2,072

A classic woman's mid-length Heritage Trench Coat from Burberry is listed at £1,295 in the UK. That's $1,651 in U.S. dollars today, but $2,072 with the 2014 exchange rate

Pub Meal: $71 vs. $90

Visitors interested in touring the countryside are likely to find themselves in a traditional British pub like the Rose & Crown in Snettisham, named one of the UK's top 10 by the Good Pub Guide. We added up the cost of a typical meal, including soup (£5.50), fish and chips (£13), pudding (£6.50), and a pint of ale (£3), and then doubled it assuming you are dining with a friend. The total comes to £56. That's about $71 in today's dollars, but would have been closer to $90 if this was 2014.

Read Next: Is Now the Time to Book a Trip to Europe?

One-Week Vacation: $2,677 vs. $3,360

We estimate that a middle-of-the-road couple vacationing in the UK can easily expect to spend about £300 per day, once you add up expenses like food, taxis, attractions, souvenirs, and lodging at a halfway decent hotel. So, without including airfare, the ballpark cost of seven nights abroad comes to £2,100. That bill would have run you $3,360 in 2014, but only $2,677 today. In other words, the whole trip is $683 cheaper thanks to the current exchanges.

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