UK outranked by rival destinations for tourist spending

Tourist spending in the UK represents just 1.6% of the economy, almost a quarter below the European average of 2.1% of GDP.

The UK was ranked 23rd in a study of 34 countries that looked at spending by tourists – including inbound travellers – as a percentage of that country’s Gross Domestic Product (GDP) by national accountancy group UHY Hacker Young.

Furthermore, the UK was ranked last out of all 34 countries studied for the percentage change in tourist expenditure over the years studied, with a 9% fall from $45.5 billion to $41.5 billion between 2015 and 2016.

However, it has recovered recently and VisitBritain forecasts tourists to spend a record level in 2018.

The researchers highlighted how the UK is often unable to upgrade tourist infrastructure capacity as quickly as many emerging markets, so it struggles increase tourism expenditure.

The UK is struggling to increase airport capacity, with Heathrow already operating at 98% and plans for a third runway have only just been finalised by government ministers after more than decade of debate.

By contrast, China is heavily investing in the infrastructure needed for large numbers of international visitors. Beijing Daxing airport is set to be the largest airport in the world when it opens in 2019 and Guangzhou’s new airport has expanded to accommodate 100 million passengers a year.

Martin Jones, UHY Hacker Young partner, said: “Tourism is a major battleground in the global economy – and the UK is lagging behind.

“The drop in sterling has helped to attract tourists to the UK since the Brexit vote.

“However, unless the government quickly builds the capacity needed to welcome large numbers of tourists the country will not be able to take full advantage of the impact of the fall in sterling.

“More developed economies, including many in European countries, can often find it a slower, more difficult process to increase tourism capacity.

“As globalisation continues and more people get the opportunity to travel more widely, tourism is likely to become an even more important source of jobs and a catalyst for business creation and growth. Governments need to recognise the opportunities it brings.”

Picture of tourists in Bath: ©VisitBritain/Joanna Henderson.