Media Releases

Booming Share of Travel and Tourism in UK Economy: Ken Research

Posted on 03 November 2016 by KenResearch

Record breaking contribution for inbound tourism in the first quarter(2016) in London
Number of Europe country visitors increasing magnificently

Ken Research announced its latest publication on, “TRAVEL AND TOURISM IN THE UK TO 2020” which provides a detailed analysis of the UK travel and Tourism Industry. Category-wise coverage of different segments in the industry is also included in the report. In addition, detailed description of consumer trends in the report enables the reader to interpret future outlook on how the market will shape up by the end of this decade.

The UK is the world’s eighth biggest tourist destination by visitor numbers. Tourism is one of the largest and fastest growing industries in the UK. Since London 2012 Olympics and Paralympic Games, tourism has seen a growing path. The London city has shown an increase of about 20% tourists compared to the last five years. The Rugby World Cup and exhibitions at its museums and galleries are given credit for the inflow of tourists. Domestic visitor spending has also increased during the studied period. The most popular destination for Britons is Spain, with approximately one fifth of all visits abroad.

The VisitBritain (tourist board of Great Britain) comes up with schemes to promote tourism. International arrivals during 2010-2015 contributed to the UK’s travel and tourism growth at a CAGR of 3.81%. For the period over 2016-2020, inbound arrivals are forecasted to grow at a CAGR of 4.47%. The improved economic conditions contributed to the volume of domestic and outbound tourist, which rose at a CAGR of 1.99% and 3.6% respectively. By 2020, volume of outbound tourists from the UK will rise at a CAGR of 4.26% and reach 78.7 million.

The Prime Minister announced a five-point tourism plan in 2015 that will do dual work of attracting international visitors and help to create more jobs in the country. The five major aspects of the plan are: Skills and jobs, transport, a better coordinated sector, common sense regulation, and an improved welcome. ‘Rail for tourism innovation’ competition was run by RSSB’s Future Railways Programme to promote rail tourism in the UK for which the Prime Minister declared US$1.1 million. The outbound tourism is promoted by an ultra-low-coat transatlantic airline, WOW Air which plans to extend its routes for summer 2016 to more tourist destinations such as Toronto, San Francisco, Montreal and Los Angeles. The travel will be made easy for Britons as the routes will be operated from Gatwick Airport via Reykjavik.

EU countries visitors have shown a strong growth by 7% increase in visits last year and are expected to have major contribution in the coming years. The UK’s most valuable market inbound market is of the visits from North America, which also showed a 7% increase. London has its own tourism record book which is at growing path. By 2020, London will welcome 35.6 million UK and international visits to the city. The major contributor to the London economy is its tourism industry. The tourism sector contributes £36 billion to the capital every year and supports around 700,000 thousand jobs. The value of tourism to the UK economy is 9% of the GDP.

Global Tourism and Travel industry

World Travel and Tourism Council is formed to raise Travel and Tourism as one of the world’s largest industries, which supports 1 in 11 jobs and contributing approximately 10% of world GDP. It focuses on three main aspects: Freedom to Travel, Policies for Growth, Tourism for Tomorrow.

The UK has two major competitive disadvantages in Travel and Tourism industry:

Major European tourism destinations apply a Reduced Rate of VAT to tourism products (averaging 10.5%), the UK applies the Standard Rate of 20%.
The UK’s Air Passenger Duty (APD) has risen to 360% since 2007 and now is the highest passenger tax in the world.
A UK short stay visa costs immoderate compared to a Schengen visa, which allows visit to 26 countries.

If the UK reduces VAT to 5% on accommodation and attractions will create 80,000 jobs. The significant reduction or abolition of APD will provide an instant and lasting boost to the UK economic growth

Key Topics Covered in the Report: