UK Tourism shedding its world place

The World Journey & Tourism Council (WTTC) right now issued a stark warning to the UK Authorities: the UK’s profitable Journey & Tourism business 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 information 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 rivals.

The UK’s Journey & Tourism sector straight employs nearly the identical variety of individuals 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. World 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.

Nonetheless, within the UK, the long run appears 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, akin 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 current improve in Nationwide Insurance coverage, and better than European common VAT charges. With the will increase in Air Passenger Responsibility (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 critically under-funded when in comparison with its rivals world wide, which in lots of instances obtain double the federal government funding. Further funding is essential to proceed attracting guests, and make sure the financial advantages lengthen past London
• World travellers are selecting different European locations, attracted by the tax-free procuring eliminated in 2021, which may generate an estimated £3BN5 to UK Plc
• The Treasury has mooted a central “resort tax” that may additional deter travellers, may price jobs, and trigger main resort buyers to look elsewhere

With out focused reforms, these obstacles 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 crucial juncture. The Authorities is searching for development and its Journey & Tourism sector gives simply that. As one of many nation’s largest employers alongside the NHS, contributing £280BN to the UK economic system final yr, 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 greater than a lot of its rivals – VAT, no tax-free procuring, employers Nationwide Insurance coverage, APD, and now a possible new resort tax, making the UK costly to function in and costly to go to.

“Tourism promotion within the UK is chronically underinvested and it’s conceited to suppose vacationers will all the time come to the UK. I applaud the initiative by the brand new Minister for Media, Tourism, & Inventive Industries, Rt Hon Sir Chris Bryant MP, to get leaders around the desk on the Customer Economic system Advisory Council to deal with this and guarantee Journey & Tourism can proceed to be a significant engine to financial development.

“The brand new authorities has a singular alternative to vary the trajectory of Journey & Tourism within the UK. Regardless of the business’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 correct insurance policies in place.”

Journey & Tourism is not only a cornerstone of the UK economic system – it’s a significant driver of tax income, job creation, and regional improvement. But systemic challenges threaten to undermine its potential and erode the nation’s world tourism management.

Value Competitiveness: A World Low 
The UK ranks a surprising 113th out of 119 nations for worth competitiveness, in accordance with the World Financial Discussion board’s 2024 Journey & Tourism Growth Index. Key points embrace excessive VAT, lack of VAT-free procuring, rising aviation taxes, and dear visa necessities – challenges additional compounded by comparatively low authorities funding in advertising and regional tourism.

UK: Dropping Floor to Opponents 
The UK’s overreliance on US guests compounds this difficulty. As the biggest inbound market in 2019 and 2023, US guests account for a big share of spending.

Nonetheless, this dependence leaves the business susceptible to financial and coverage modifications in a single market. Increasing supply markets is important for resilience and sustained development.

Policymakers should act decisively. The alternatives made right now 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.