United Kingdom
Tourism is an important economic sector in the United Kingdom. In 2019, tourism directly contributed GBP 73.6 billion or 3.7% of total GVA. The impacts of the pandemic saw this fall to GBP 34.4 billion or 1.8% of national GVA in 2020. Tourism directly supported 1.7 million jobs in 2019, with 240 944 enterprises involved in tourism activities.
International overnight visitors fell 73% to 11.1 million in 2020. This greatly impacted tourism receipts, which declined 64% to GBP 14.8 billion. There were 6.2 million international visits to the United Kingdom in 2021, with a gradual increase throughout the year as travel restrictions loosened and international travel resumed. The 2021 top source markets were the United States, Ireland, France, Spain and Germany.
The impact on domestic trips is also crucial as domestic tourism typically makes up more than 80% of tourism expenditure in the United Kingdom. Domestic tourism is not expected to recover to 2019 levels until 2023. The latest forecast suggests that international arrivals to the United Kingdom will not return to 2019 levels until 2025.
The Department for Digital, Culture, Media and Sport (DCMS) is the lead department responsible for tourism policy in the United Kingdom. It co-ordinates tourism policy across the United Kingdom, leads the relationship with the British Tourist Authority (the national tourist board) and has control over a number of distinct policy areas such as tourism marketing, heritage, arts, culture, and business events.
Engagement with other departments is overseen on an ad-hoc basis by the Tourism Minister responsible for policy which affects the overall tourism sector, including the departments for Business, Energy and Industrial Strategy, Transport, and Environment, Food and Rural Affairs, Her Majesty’s Treasury, and the Home Office. This was formalised in 2021 with the creation of an inter-Ministerial Group for the Visitor Economy.
The British Tourist Authority has a statutory duty to encourage visits to Britain and improve tourist amenities. VisitBritain markets and promotes Britain abroad through a global office network. VisitEngland undertakes domestic marketing and business support and development activities. The British Tourist Authority also undertakes tourism research, administers bespoke grant schemes and has a number of commercial revenue streams. In 2021/22, the BTA received GBP 34.2 million of funding from DCMS and GBP 18.9 million from GREAT, an international marketing campaign encouraging people to visit, do business, invest and study in the United Kingdom.
Tourism is largely a devolved competence; thus, the Scottish and Welsh Governments, and the Northern Ireland Executive, formulate their own tourism policy and have their own tourist boards. Tourism Ministers from the four nations meet once a quarter.
The Tourism Industry Council, co-chaired by the Minister for Sport and Tourism and a senior representative of Hilton Worldwide, drives engagement with the tourism sector, facilitating a two-way dialogue. Other forums include the ‘Tourism Industry Emergency Response’ group run by VisitBritain, which has met regularly during COVID-19, and the Events Industry Board, which supports the government in developing its business tourism policy.
Destination Management Organisations (DMOs) are an important part of the United Kingdom tourism landscape. However, they have no formal relationship with the national government outside of ad-hoc relationships on bespoke grant funding programmes. There is no consistent funding model for DMOs, but some are funded by Local Authorities. In 2021, the United Kingdom commissioned a review of the DMO model (see Box 2.10).
Source: OECD, adapted from the Department for Digital, Culture, Media and Sport, 2022.
In June 2021, the United Kingdom published its Tourism Recovery Plan, describing how the government will help the sector recover from the COVID-19 pandemic and ‘build back better’. This provides policies to address the challenges caused by the pandemic and sets out high-level aims and objectives for where the United Kingdom would like to be once tourism recovers.
The Tourism Recovery Plan lists a range of policy measures responding to each objective of the Plan. In the short to medium term. Key policy measures include stimulating demand via enhanced domestic and international marketing activities, for example, a GBP 10 million holiday voucher scheme administered by the National Lottery to stimulate domestic tourism in the off-season and introducing a new integrated rail pass for domestic tourists. Other measures include detailed sector guidance on COVID-19 rules, maintenance of the “Good to Go” COVID-19 secure accreditation, consultations on reforming Aviation Tax and Package Travel Regulations, and continued pan-economic support, such as business rates relief, loans and discretionary grant schemes administered by local authorities.
The United Kingdom has spent at least GBP 37 billion in support of the tourism, hospitality and leisure sectors through wage subsidy schemes, tax cuts and reliefs, bespoke COVID-19 loans and other measures.
In the medium to long term, the government has set five high-level objectives:
The benefits of tourism are spread across every nation and region. This particularly focuses on encouraging inbound visitors to see more of the United Kingdom beyond London.
A more productive, innovative and resilient sector with better use of digital technologies and data and more employment in year-round, quality jobs.
A sector that contributes to enhancing and conserving the United Kingdom’s cultural, natural and historical heritage and minimises damage to these environments.
A sector providing an inclusive and accessible offer open to all.
Some of these objectives were already being looked at pre-pandemic. For example, the 2019 Tourism Sector Deal included a section on accessibility. Others have emerged during the pandemic or due to a change in government, such as, for example, the focus on spreading visitors and the heightened focus on the green transition.
A range of measures will support these longer-term objectives, such as investment in tourism infrastructure, including attractions and transport (particularly rail and electric vehicles); reform of England’s Destination Management Organisations (Box 2.10); exploration of a ‘Tourism Data Hub’ and consultation on an accommodation registration scheme, relating primarily to regulation of the sharing economy and holiday letting market; commitment to developing a national Sustainable Tourism Plan; and an enhanced Ministerial advocacy programme for business events.