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Press releases

UK TOURISM GROWS THROUGH A DOUBLE DIP RECESSION

14th Jan 2013


• Total tourism revenue up 12.6% to £40bn between 2007-2011- (General economy up 8%)
• Employment numbers buck the wider trend, thanks to strong growth in 2011
• Total visitors up 3.1% to 157m
• Fewer Britons holidaying abroad, down 18%
• Staycation breaks up 5.6%, as recession proves holidays are essential and not a luxury for Britons
• Two million fewer overseas visitors coming to the UK
• British seaside destinations on the decline by -5%
• UK city breaks account for 23% of domestic tourism

The first comprehensive study into how the UK tourism industry has performed during the longest double dip recession since the Second World War has been published today by Travelodge, one of the UK’s leading hotel chains.

The report reveals a resilient industry that has outperformed the general economy and led the way in terms of employment numbers. Whilst GDP grew by 8% from 2007 to 2011, during the same period the tourism industry increased its revenues by 12.6% to more than £40 billion, increased visitor numbers by 3.1% and added new jobs. This makes tourism one of the fastest growing industries in the UK.

British tourism is one of the few sectors not to have seen the number of jobs decline between 2007 and 2011, which is especially impressive when you consider that UK unemployment rose from 1.58 million to 2.64 million during that time.

The industry grew job numbers by 2,000 between 2007 and 2011, from 2.690 million to 2.692 million. Although this growth is relatively modest, at the same time manufacturing fell by -17%, construction by -15%, finance by -7% and transport & storage by -6%. The report shows that these figures are down to strong growth in 2011, when 120,000 new jobs were created.

The report shows that the UK’s appeal as a tourist destination endured during the double dip, with overall visitor numbers up by 3.1% to 157.4m. Staycations form the backbone of the tourism economy, with domestic trips and holidays increasing by 5.6% to 126.6m. This shows that Britons have reacquainted themselves with holidaying at home, and city breaks emerge as particularly popular, accounting for almost a quarter (23%) of all domestic breaks. This shows that when cities get their tourism strategy right, the results can be spectacular.

In this respect the UK’s fourth most populous city, Liverpool, is the stand out destination in terms of tourism success. Building on its status as the 2008 European Capital of Culture Liverpool leads the way with a 23% increase in visitors and a 91% increase in holidaymakers. (On average most UK cities enjoyed an average visitor increase of 2.6%. London increased its visitor numbers by 4%).

However, as the Staycation emerges as the bastion of UK tourism, the seaside continues to decline. Five previous giants of UK tourism, Bournemouth, Great Yarmouth, Blackpool, Torquay and Newquay have all experienced a slump in the number of visits – an average decline of -5% between the five.

Despite the many successes identified in the report, its findings also show that the number of trips taken by Britons overseas has declined by 12.6 million (-18.1%), from 69.4 million to 56.8 million, meaning that 5.9 million holidays and trips have come out of the market all together when you factor in the number of domestic holidays and trips. This is shy of the Government’s stated ambition for domestic trips to replace the number of missing overseas trips.

Grant Hearn, Travelodge CEO said: “Our report confirms UK tourism has successfully weathered the recession and outperformed other key sectors which is great news. However as one of Britain’s biggest business sectors it deserves the chance to unlock its true potential. We have a real opportunity within our grasp which can play a significant part in helping our economy to recover; our lack of immediate action is costing jobs, growth and investment.”

“As the UK’s fifth largest sector we are creating jobs and providing long lasting career opportunities, something very few industries in the economy can say at present. The issue we face is that tourism is quite low on the agenda for the Department for Culture, Media & Sport, therefore it is essential that the Government takes action and moves our industry to where it belongs – the Department for Business, Skills and Innovation. It is in our national economic interest and this has to happen now. We need to be treated as a serious business sector.”

The report also shows that the UK, which is the sixth biggest tourist destination in the world is lagging behind the rest of the world in terms of visitor numbers. On a global level, visitor numbers are up by 23.4%, whereas inbound visitors to the UK have fallen by two million (-6.1%) from 32.8 million to 30.8 million. The UK is losing out on attracting tourists from fast growing markets such as China, India, Brazil and Russia.

As a result of these missing visitors the report demonstrates that the Government’s target for four million new overseas visitors by 2014 will be one million short at the half way mark.

On the back of these findings the report concludes by calling on the Government to do more to ensure that its ambitions for tourism are realised and to aid’s the UK’s economic recovery. Listed below is a ten point action plan for tourism success:

1. Move tourism higher up the Government’s agenda, with the first step being to move the industry to where it belongs – the Department for Business, Skills and Innovation. DBIS has both the authority and responsibility to ensure that tourism can flourish.

2. DBIS to take responsibility for setting a national strategy and policy which includes introducing performance targets and better collaboration across the industry.

3. Reinstate a full time Minister for Tourism.

4. Create a united tourism working party with the Scottish Government, Welsh Assembly Government, Northern Ireland Assembly and the Mayor of London.

5. Develop a dedicated plan and regional tourism fund to help the national tourist boards develop a “London and beyond” strategy that considers where investment in regional tourism can deliver the strongest results.

6. Assess the business case for regional tourism zones that enjoy allowances on capital expenditure and investment in new projects.

7. Ring-fence funding for hospitality apprenticeships to drive growth and jobs in the sector.

8. Simplify the visa process for visitors from emerging markets, especially China. Some steps have been taken recently, which is good news, but a lack of further action will cost jobs, growth and investment.

9. Reduce the current VAT rate of 20% for the hospitality industry to 5% in line with our European neighbours. This will create 236,000 jobs by 2015, 475,000 jobs by 2020 and annually boost the economy by £150 million.

10. Target the investment industry especially companies who invest in pension funds and savings plans to invest in tourism business ventures as an alternative long term investment.

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