The importance of tourism to the UK economy

Jamie Carter

Account Executive

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This week is English Tourism Week, a week dedicated to celebrating and raising awareness of the quality, range, and value of English tourism to the whole of the UK. The Government has been very keen to promote English tourism as the UK begins to recover from the pandemic. This is not surprising. English tourism makes up 80% of the UK’s visitor economy and in 2019 it generated over £100 billion. In normal years, tourism contributes at least £106 billion to the total UK economy and supports 3.8 million jobs, most of which are held by young people. By 2025, it is expected that tourism will be worth 10% of GDP. Tourism is vitally important to almost all parts of the country, from the Lake District to the Scottish Highlands, but it is particularly important to London, which usually records 30 million tourists a year.

However, the pandemic has devastated the tourism industry in the UK. With the onset of the first lockdown there was a massive 98.3% drop in air passenger arrivals between February 2020 and April 2020. Indeed, turnover in travel and tourism businesses fell to its lowest level in 2020 in May, at just 26.0% of February levels, compared with 73.6% in all other industries. This has had a huge impact on jobs and particularly on young people. In travel and tourism industries overall, people aged 16 to 24 saw the largest fall in employment of any age group between 2019 and 2020. As a result of the pandemic, it is now forecast that spending by tourists in 2021 will be half the level it was in 2019.

London has keenly felt the impact of this thanks to its reliance on tourism. Strikingly, London saw the largest fall in room occupancy of any English region from 2019 to 2020, with just 20% of rooms occupied in July 2020 compared with 90% in the same month in 2019. Thousands of Londoners work in the tourism industry and many have lost their jobs as a result of the pandemic, putting new strains on the economy. Newly re-elected Mayor Sadiq Khan has made encouraging tourists back to the city one of his top priorities, launching an ambitious new tourism campaign worth £7 million. Although the campaign has been controversial, with an unusual artwork installed as part of the campaign receiving much negative attention online.

However, it is not just London that is feeling the impact. In Scotland, large parts of the Highlands rely on tourism and it represents up to 43% of employment in areas such as the Cairngorms National Park compared with 8% in Scotland overall. Before the pandemic, the Highlands attracted six million visitors a year which was worth an estimated £1.2 billion and supported 20,000 jobs. The Highlands experienced significant losses during to the pandemic, with jobs and businesses lost across the region. Although in turn, they did notably benefit somewhat from many people going on “staycations” in the Summer of 2020 rather than going abroad.

The lack of tourism also has had knock on effects on other sectors of the economy, especially retail, sport, museums, and transport. Across the UK, these sectors rely on consumer spending generated by tourists to make up a sizeable proportion of their income. Until tourists return, they will struggle to make a profit.

The Government has taken action to support tourism, such as through the Culture Recovery Fund. The fund has awarded hundreds of millions to various cultural organisations including the Glastonbury Festival and the National Football Museum to allow them to survive the pandemic. The ultimate aim is that they will be able to reopen and recover in time to support the tourism sector this Summer.

It is clear that tourism is vitally important to all parts of the UK and to many different sectors of the economy. The pandemic has had a devastating impact with money, jobs and businesses all being lost as a result. With so much at stake, it is plain to see why the Government and the industry are so keen to make English Tourism Week a success and ensure the tourism sector is able to thrive going forward.

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