The UK travel and tourism industry serves three separate markets: domestic
tourism by UK residents within the UK; outbound tourism by UK residents
travelling abroad; and inbound tourism by overseas residents travelling
to the UK. In 2008, total expenditure on UK travel and tourism, combining
these three markets, increased by 2.5% to £74bn. However, there were falls
recorded in the number of trips made (down by 3.3% to 218.3 million) and in
the number of bed nights spent (down by 1% to 1.32 billion). The outbound
market is the largest by expenditure and bed nights, while the highest
number of trips made is reported for the domestic market.
The global recession has seriously affected the UK travel and tourism industry
and the market is currently facing its most difficult trading climate for many
years. Falls in the numbers of air passengers — especially first-class and
business passengers — have badly affected the airline industry and reductions
in room and bedspace occupancy levels have had a serious impact on the
hotel market. Many of the leading tour operators have also been forced to
reduce the number of holidays they offer customers. Furthermore, the train
operator National Express is to have one of its franchises, the London to
Edinburgh East Coast Mainline service, taken back into public ownership by
the Government, owing to falling passenger numbers and the financial losses
the company is now making on the route.
The industry is greatly concerned about the forthcoming increases in
Air Passenger Duty (APD), which is a passenger-based tax charged to the
aircraft operator and based on the number of passengers, the destination
and the class of travel. The duty is set to increase in November 2009 and
again in November 2010, and it will push up the cost of air travel and act
as a disincentive — especially to long-distance travel. It will also make the UK
unique, in the sense that no other country has anything like the same
degree of air travel taxation.
The British Tourism Framework Review was commissioned by the Secretary
of State for Culture, Media and Sport in 2007 and followed the Government’s
decision to reduce VisitBritain’s funding in real terms for the years 2008/2009
to 2010/2011. Published in February 2009, the British Tourism Framework
Review proposed a ten-point agenda to help realise the full potential of
Britain’s visitor economy. These ten points included: redefining the role
of VisitBritain; creating a new English tourism-led body (VisitEngland);
and developing UK-wide tourism Internet platforms aimed at supporting
the industry and the national tourist boards.
2009 is expected to be another difficult year for the UK travel and tourism
market, with all sectors (inbound, outbound and domestic) affected by the
worldwide recession. The market in 2010 is expected to remain difficult,
although some slight improvement is projected, and it may be 2011 before
a more substantial recovery is witnessed. The 2012 London Olympics should
provide a welcome boost to both the inbound and domestic sectors of the
travel and tourism market.
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