The total value of tourism to the UK is set to rise by more than 60% to £188 billion over the next decade, says an independent report commissioned by VisitBritain. Research from Deloitte and Oxford Economics forecasts that the favourable exchange rate, the lure of the 2012 Olympic and Paralympic Games and the appeal of our world-renowned attractions, should ensure the sector grows at an above-average 3.5% per annum between now and 2020…
The total value of tourism to the UK is set to rise by more than 60% to £188 billion over the next decade, says an independent report commissioned by VisitBritain.
Research from Deloitte and Oxford Economics forecasts that the favourable exchange rate, the lure of the 2012 Olympic and Paralympic Games and the appeal of our world-renowned attractions, should ensure the sector grows at an above-average 3.5% per annum between now and 2020.
The number of jobs supported by tourism over that period is predicted to rise by 264,000 – from 2.63 million now to 2.89 million.
This means the total economic contribution of the Visitor Economy – covering firms directly and indirectly involved in tourism – is poised to expand faster than retail, chemicals, transport, the gas and electricity utilities and manufacturing. Only construction and financial and business services look more promising.
Overall, the in-depth 102-page report prepared for VisitBritain, the national tourism agency, is optimistic. But it warns that Government intervention will be the ‘’key’’ to success because a range of market failures need to be tackled.
These include co-ordinating marketing to help small and medium sized tourist businesses who cannot afford to do it themselves, enabling rural firms who face higher costs of operating to adopt innovative technology, and supporting the many districts across the UK that rely disproportionately on tourism as an important source of jobs for low skilled and part time workers.
The industry also needs help to improve its ability to predict what facilities will be needed for the tourists that are likely to turn up, to ensure the modernisation of hotels and venues is done in a way that retains their original appeal and authenticity and to adapt more swiftly to new trends such as the growth in older "grey pound" tourists.
The report calculates that the total economic contribution that home and overseas visitors make to the UK is currently £115 billion a year. It predicts that if all goes well the figure is set to rise to £188 billion a year in 2020, an increase of more than 60%.
Deloitte and Oxford Economics predicts spending by overseas visitors will almost double from £16 billion now to £31 billion in 2020 (2). These figures make tourism Britain’s fifth biggest industry and third largest foreign exchange earner.
Tourism is currently benefiting because the pound has weakened considerably against both the dollar and euro in the last three years, making Britain a good deal for foreign visitors. The report suggests that a further 10 per cent depreciation in the pound relative to other international currencies could attract an extra 1 million international visitors to the UK in 2011 and 2012. These visitors would be expected to spend an extra £300 million in both years.
The report also shows that tourism is disproportionately important in rural areas and for part time female workers.
Christopher Rodrigues, Chairman of VisitBritain, said: "This detailed and rigorous report from Deloitte is enormously encouraging. It demonstrates that the industry has the power to deliver a huge amount of extra wealth and jobs to Britain in the coming decade, with the total value of tourism to the British economy looking set to rise 60% between now and 2020.
"This makes it clear that tourism, already Britain’s fifth largest industry and third biggest earner of foreign exchange, is going to be central to the health of the British economy for years to come. The continuing low level of the pound and the approaching Olympics in 2012 give us a tremendous opportunity to promote Britain’s attractiveness as a destination to the rest of the world."
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
