The World Journey & Tourism Council (WTTC) right this moment issued a stark warning to the UK Authorities: the UK’s profitable Journey & Tourism trade faces stagnation and long-term decline.
On the eve of the UK Authorities’s first Customer Economic system Advisory Council, the worldwide tourism physique revealed knowledge that reveals £60BN1 is in danger over the subsequent 10 years, in misplaced tourism enterprise.
Whereas forecasts point out short-term stability, the long-term outlook is weak because the UK loses floor to European opponents.
The UK’s Journey & Tourism sector immediately employs virtually the identical variety of folks because the NHS2. It contributed £280BN to the UK economic system in 2024 (10.3%) and supported over 4.1MN jobs (11.3%)3. It additionally contributes c.£100BN yearly to the Treasury in tax revenues, but successive governments have proven little curiosity in Journey & Tourism.
The chance for development is appreciable. International Journey & Tourism is anticipated to develop 3.7% yearly over the subsequent 10 years, in comparison with 2.4% for the broader world economic system4.
Nevertheless, within the UK, the long run seems to be troubling. Over the subsequent 5 years, the UK is anticipated to have one of many lowest development charges in in a single day worldwide arrivals. It’s set to lag different European tourism powerhouses, comparable to Spain, Germany, and Italy, which place Journey & Tourism on the coronary heart of presidency decision-making.
WTTC has recognized a number of key areas that urgently require authorities motion to unlock the sector’s full potential:
- UK Journey & Tourism companies are already impacted by the latest improve in Nationwide Insurance coverage, and better than European common VAT charges. With the will increase in Air Passenger Obligation (APD) and the introduction of an ETA, a visa waiver which may rise from £10 to £16 per customer, the UK is pricing travellers out of the UK, towards different locations
- Because the organisation charged with selling tourism within the UK, VisitBritain is significantly under-funded when in comparison with its opponents world wide, which in lots of instances obtain double the federal government funding. Extra funding is essential to proceed attracting guests, and make sure the financial advantages lengthen past London
- International travellers are selecting different European locations, attracted by the tax-free buying eliminated in 2021, which may generate an estimated £3BN5 to UK Plc
- The Treasury has mooted a central “lodge tax” that may additional deter travellers, may price jobs, and trigger main lodge buyers to look elsewhere
With out focused reforms, these limitations will proceed to stifle competitiveness and deter high-value travellers from selecting the UK.
Julia Simpson, WTTC President & CEO stated “The UK is at a important juncture. The Authorities is searching for development and its Journey & Tourism sector presents simply that. As one of many nation’s largest employers alongside the NHS, contributing £280BN to the UK economic system final 12 months, the sector has been misunderstood and poorly handled by successive governments.
“The Authorities can’t tax its approach out of debt, it wants to take a position to develop. UK taxes are larger than lots of its opponents – VAT, no tax-free buying, employers Nationwide Insurance coverage, APD, and now a possible new lodge tax, making the UK costly to function in and costly to go to.
“Tourism promotion within the UK is chronically underinvested and it’s smug to assume vacationers will all the time come to the UK. I applaud the initiative by the brand new Minister for Media, Tourism, & Artistic Industries, Rt Hon Sir Chris Bryant MP, to get leaders around the desk on the Customer Economic system Advisory Council to sort out this and guarantee Journey & Tourism can proceed to be a serious engine to financial development.
“The brand new authorities has a singular alternative to alter the trajectory of Journey & Tourism within the UK. Regardless of the trade’s resilience, years of presidency inertia are taking their toll. We welcome the brand new authorities’s dedication to surpassing 50 million guests by 2030, however this may solely be achieved with the fitting insurance policies in place.”
Journey & Tourism isn’t just a cornerstone of the UK economic system – it’s a significant driver of tax income, job creation, and regional growth. But systemic challenges threaten to undermine its potential and erode the nation’s world tourism management.
Value Competitiveness: A International Low
The UK ranks a stunning 113th out of 119 nations for value competitiveness, in keeping with the World Financial Discussion board’s 2024 Journey & Tourism Improvement Index. Key points embrace excessive VAT, lack of VAT-free buying, rising aviation taxes, and dear visa necessities – challenges additional compounded by comparatively low authorities funding in advertising and marketing and regional tourism.
UK: Shedding Floor to Rivals
The UK’s overreliance on US guests compounds this problem. As the biggest inbound market in 2019 and 2023, US guests account for a major share of spending.
Nevertheless, this dependence leaves the trade weak to financial and coverage adjustments in a single market. Increasing supply markets is important for resilience and sustained development.
Policymakers should act decisively. The alternatives made right this moment will decide whether or not the UK thrives as a worldwide tourism chief or turns into an also-ran within the face of rising worldwide competitors.