“Exploring the Future: Insights from the World Travel & Tourism Council”

Over £60BN at risk

London, UK: The World Travel & Tourism Council (WTTC) has today issued a severe alert to the UK Government: the successful Travel & Tourism sector in the UK is poised for stagnation and prolonged decline.

On the eve of the UK Government’s inaugural Visitor Economy Advisory Council, the international tourism organization disclosed figures indicating £60BN¹ is at stake over the forthcoming decade, through lost tourism revenue.

While projections suggest short-term stability, the long-term forecast appears bleak as the UK falls behind European rivals.

The Travel & Tourism industry in the UK directly employs nearly the same number of individuals as the NHS². It contributed £280BN to the UK economy in 2024 (10.3%) and supported over 4.1MN jobs (11.3%)³. Additionally, it provides approximately £100BN each year to the Treasury via tax revenues, yet consecutive governments have displayed minimal interest in the Travel & Tourism sector.

 

The potential for expansion is substantial. Global Travel & Tourism is forecasted to grow 3.7% annually over the upcoming decade, compared to 2.4% for the overall global economy⁴. 

 

Nevertheless, in the UK, the future looks concerning. Over the next five years, the UK is projected to experience one of the lowest growth rates in international overnight arrivals. It is expected to lag behind other leading European tourism countries such as Spain, Germany, and Italy, which have positioned Travel & Tourism as central to government policies.

 

WTTC has outlined several critical areas demanding swift government action to unlock the full potential of the sector:

• UK Travel & Tourism enterprises are already feeling the effects of the recent rise in National Insurance contributions, and VAT rates exceeding the European average. With rising Air Passenger Duty (APD) and the introduction of an ETA, a visa waiver which could increase from £10 to £16 per visitor, the UK is pricing travelers out of the destination in favor of others.
• VisitBritain, the organization assigned with promoting tourism in the UK, is significantly underfunded in comparison to its global counterparts, many of which receive double the governmental support. Increased funding is essential to continue luring visitors, ensuring economic benefits extend beyond London.
• International travelers are favoring other European destinations, deterred by the removal of tax-free shopping in 2021, which could account for an estimated £3BN5 to the UK economy.
• The Treasury has suggested implementing a central “hotel tax” that would discourage travelers, potentially lead to job losses, and cause major hotel investors to seek alternatives.

Without focused reforms, these obstacles will persist in hampering competitiveness and drive high-value travelers away from selecting the UK.

Julia Simpson, WTTC President & CEO stated, “The UK stands at a pivotal moment. The Government seeks growth, and its Travel & Tourism sector has the potential to deliver this. As one of the largest employers in the country next to the NHS, contributing £280BN to the UK economy in the previous year, the sector has been misunderstood and inadequately treated by successive governments.

“The Government cannot solely rely on taxation to overcome its debts; it must invest to foster growth. UK taxes are higher than many of its competitors – VAT, absence of tax-free shopping, employer National Insurance, APD, and now a forthcoming hotel tax, render the UK costly to operate in and visit. 

“Promotion of tourism in the UK is significantly underfunded, and it’s presumptuous to believe tourists will consistently choose the UK. I commend the initiative of the new Minister for Media, Tourism, & Creative Industries, Rt Hon Sir Chris Bryant MP, to convene leaders at the Visitor Economy Advisory Council to address this and ensure Travel & Tourism continues as a significant driver of economic growth. 

“The new government has a unique chance to alter the path of Travel & Tourism in the UK. In spite of the industry’s resilience, prolonged governmental inactivity is having detrimental effects. We appreciate the new government’s commitment to exceeding 50 million visitors by 2030, but this can only materialize with appropriate policies in place.”

Travel & Tourism is not only a fundamental pillar of the UK economy – it’s a crucial engine for tax revenue, job creation, and regional development. Yet systemic challenges threaten to diminish its potential and undermine the country’s leadership in global tourism.

price Competitiveness: A Global Low

The UK is ranked an alarming 113th out of 119 nations for price competitiveness, according to the World Economic Forum’s 2024 Travel & Tourism Development Index. Major issues include high VAT, absence of VAT-free shopping, increasing aviation taxes, and expensive visa requirements – challenges further exacerbated by relatively low government investment in marketing and regional tourism.

UK: Falling Behind Competitors 

The UK’s heavy reliance on US visitors magnifies this issue. As the largest source market in 2019 and 2023, US visitors represent a substantial portion of overall spending.

However, this reliance makes the industry susceptible to economic and policy fluctuations in a single market. Broadening source markets is vital for resilience and sustained growth.

Policymakers must take swift action. The decisions made today will determine whether the UK flourishes as a global tourism leader or becomes an afterthought amidst escalating international competition.

-ends- 

 

Editor’s Note 

  

Projected Growth for Overnight International Arrivals
Country	2029 vs 2024 (CAGR)
Australia	9.1%
Switzerland	7.4%
Japan	7.4%
Germany	5.9%
Italy	5.7%
Spain	4.9%
Ireland	3.2%
United Kingdom	3%
France	2.3%

Source: Oxford Economics 

 

Based on recent projections from Oxford Economics, France stands out as the top destination globally, welcoming nearly 100 million visitors annually, whereas the UK received slightly less than 42 million. 

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