Tourists are individuals or groups of people who depart from their normal environment for aduration period of more than twenty four hours and less than one year for leisure purposes,business purposes or any other purposes that they can only get from their tourism destinationsfor example wildlife, old building s, historical sites, etc.Through these movements tourists exchange their domestic currencies to the foreigncurrencies of the countries which they intend to visit and for this reason there is the exchangeof the euro and the pound.The euro which is symbolized () and coded (EUR) is a currency that is used as the officialcurrency by seventeen members of the twenty seven European Union members and they arereferred to as the euro-zone. While the pound symbolized (£) and coded (GBP) is used as theofficial currency of the United Kingdom and her overseas territories and they are referred to asthe Sterling zone. Thus whenever a tourist intends to visit either the euro-zone from thesterling zone and vice-versa there has to be the exchange of the euro to the pound and thisdepends on the rates of exchange between the two currencies on the day.
Tourism and rates of exchange
Exchange rates between two currencies is a major determinant of the number of tourists willingto visit a country within the euro-zone or the sterling zone because they consider how much of the other currency they will get after exchanging it with their domestic currency, this mostlydepends on the exchange rate regime that has been adopted by the government and include.Fixed exchange rate regime-this is where the government fixes the rates at their value of choiceand incase it increases or falls the government interferes to maintain the fixed rate, this attimes may discourage tourism as the fixed rate might be too high compared to their domesticcurrencies.Flexible exchange rate regime- this is where the exchange rates depends on demand and supply,this is better preferred by tourists as it varies from day to day and they can time when it isfavorable against their currency and they can easily take advantage.Floating exchange rate regime-this is where the exchange rate depends on the foreignexchange market, its favorable to tourists because it varies in time and at some point it will bein the favor of their currency and they can decide whether to visit the county.