London, UK – The World Journey & Tourism Council (WTTC) immediately 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 Financial system Advisory Council, the worldwide tourism physique revealed knowledge that reveals £60BN1 is in danger over the following 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 instantly employs virtually the identical variety of individuals because the NHS2. It contributed £280BN to the UK financial 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 progress is appreciable. World Journey & Tourism is anticipated to develop 3.7% yearly over the following 10 years, in comparison with 2.4% for the broader international financial system4.
Nonetheless, within the UK, the longer term appears troubling. Over the following 5 years, the UK is anticipated to have one of many lowest progress charges in in a single day worldwide arrivals. It’s set to lag different European tourism powerhouses, reminiscent of 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 enhance 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 severely under-funded when in comparison with its rivals all over the world, 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 prolong past London
- World travellers are selecting different European locations, attracted by the tax-free purchasing 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 traders 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 progress and its Journey & Tourism sector gives simply that. As one of many nation’s largest employers alongside the NHS, contributing £280BN to the UK financial system final yr, the sector has been misunderstood and poorly handled by successive governments.
The Authorities can’t tax its manner out of debt, it wants to speculate to develop. UK taxes are greater than a lot of its rivals – VAT, no tax-free purchasing, 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, & Artistic Industries, Rt Hon Sir Chris Bryant MP, to get leaders around the desk on the Customer Financial system Advisory Council to deal with this and guarantee Journey & Tourism can proceed to be a serious engine to financial progress.
The brand new authorities has a singular alternative to vary 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 could solely be achieved with the suitable insurance policies in place.
Journey & Tourism isn’t just a cornerstone of the UK financial system – it’s an important driver of tax income, job creation, and regional improvement. But systemic challenges threaten to undermine its potential and erode the nation’s international tourism management.
Worth Competitiveness: A World Low
The UK ranks a stunning 113th out of 119 international locations for worth competitiveness, in response to the World Financial Discussion board’s 2024 Journey & Tourism Growth Index. Key points embody excessive VAT, lack of VAT-free purchasing, rising aviation taxes, and dear visa necessities – challenges additional compounded by comparatively low authorities funding in advertising and marketing and regional tourism.
UK: Dropping Floor to Opponents
The UK’s overreliance on US guests compounds this challenge. As the most important inbound market in 2019 and 2023, US guests account for a big share of spending.
Nonetheless, this dependence leaves the trade susceptible to financial and coverage adjustments in a single market. Increasing supply markets is important for resilience and sustained progress.
Policymakers should act decisively. The alternatives made immediately will decide whether or not the UK thrives as a world tourism chief or turns into an also-ran within the face of rising worldwide competitors.
Forecast Progress for In a single day Worldwide Arrivals
2029 vs 2024 (CAGR)
Australia: 9.1%
Switzerland: 7.4%
Japan: 7.4%
Germany: 5.9%
Italy: 5.7%
Spain: 4.9%
Eire: 3.2%
United Kingdom: 3%
France: 2.3%
Supply: Oxford Economics
In line with Oxford Economics newest estimates, France is probably the most visited nation on the earth with virtually 100MN guests per yr, while the UK had just below 42MN.
