An Analysis of Current Practices and Key Challenges in Visitor Economy

This report provides an overview of the visitor economy, focusing on its impact on GDP through tourism, hospitality, and event industries. It highlights London as a key destination within the UK, examining its contribution to the visitor economy and the challenges it faces, such as taxation, travel market fl...Read More

CURRENT PRACTICES IN THE
VISITOR ECONOMY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Presenting Visitor Economy........................................................................................................3
Describing the destination.......................................................................................................4
Presenting the challenges of visitor economy.............................................................................6
Recommendations........................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCE................................................................................................................................10

INTRODUCTION
Economy can be defining as large set of inter related production and consumption activity
such as goods and services by different agent. Moreover, market economy allow goods to
follow freely in the market on the basis of demand and supply. The present report is based on
visitor economy that is describe as increase in the GDP through tourism, hospitality and event
industry. The tourism economy is based on the destination that contributes in increasing the
profit of this sector as well as developed the nation. Furthermore, the study will discuss on
London the UK all in one destination and how it has developed the visitor economy.
Lastly, it will throw light on the key challenges faced by the country as well as recommend to
overcome the issues.
MAIN BODY
Presenting Visitor Economy
Visitor economy can be defining as the concept that highlights the various effect of
tourism in the local economy it focusses on the direct and indirect consumption (Kim, Liu, and
Williams, 2021). It helps in increasing the GDP of the county. Along with this, it covers the
tourism economy such as development of society, sustainable use of tourists and inputs and
production process. Moreover, the visitor economy build by the tourist spot and destination.
Visitor economy can be defining as the allocation of resources in order to satiny the demands
of the customer. The visitor economy plays very important role in developing the nation
such as it boost the revenue of the country. By creating thousands of jobs, develops
infrastructure and build the culture exchange between the domestic an international tourist.
However, it not only builds the hospitality and tourism sector by also other industry.
Such it creates job in the agriculture, communication, educational and health sector. That
contributes in developing the nation and enhancing the life of the people that are living in the
society (Duignan and Pappalepore, 2019). Along with this it also helps in increasing the
revenue of the small company and it is very profitable for the local shops, restaurant and
shopping centres. In addition to this, it also helps government in collecting the revenue man
builds the infrastructure of the country such as roads, building and hospital. Furthermore,
the good infrastructure contributes in increasing the smooth flow of goods and services in
the country. As well as increase the local people experience and provide them with the various

opportunity for growth. Along with this, global event organizer plays major role in attracting
large tourist and it earn large Revie through the registration fees, sales and media promotion.
The tourism brings diversity and culture in the hosting country. Furthermore, it helps the
business sector in sustaining as it helps in increasing the production of the goods and
services.
However, the disadvantage that country can be more over reliance on tourism for their
economy. It can create negative effect such as global pandemic has damage the visitor
economy. Moreover, it also increases the low quality of employment as this Job are seasonal and
low paying. Along with this, local workers are not able to get the proper income this it affects the
local economy. The country has to invest more on the infrastructure in order to attract more
and more tourist (Buhalis, Andreu and Gnoth, 2020). Furthermore, the benefit of visitor
economy has are only enjoyed by the international and famous country and the lower
countries are not able to take the advantage of this economy. In addition to this, the government
only focus on the hospitality industry and tourism for increasing the GDP and other industry
is not given more importance such as hospitality and educational sector. In addition to this, the
major disadvantage that country face is social culture as it affects the globalisation technology.
Thus, tourism plays major role in visitor economy as well as impact negatively and positively.
The model of visitor economy is consist of interrelated equation such as behaviour
relationship consist of nation account. This factor contributes in overall all economy in terms
of employment and values added. Moreover, it can have measured by macro comics, visitor
economy related to demand and supply. In order to identify the accurate contribution in the
country.
Describing the destination
London is one of the famous tourist sector of the UK. London is famous for its rich
history and have attractive tourist place. Such as River Thames, White tower and Buckingham
Palace. Moreover, the tourism of London has contributed every year 14.9 billion pounds in
the economy of the country (Minor and et.al., 2021). However, tourism has been developed in
UK through countries such as Wales. London and England. The City attracts many visitor
due notable tourist spot as well as rich culture. The country has museums and galleries
and majority of the tourist is given free entry. Along with this, for increasing the visitor
economy London has develop the tourism strategy such as targeting the premium market

and developed the tourist sport in order to attract visitor. The major priorities are to make
the culture of the London more rich and accessible in the world. Addition lay, the
country has decided to organized global event in the off season in order to maintain the
revenue (Connell and Page, , 2019). Furthermore, it has also used media promotion in order to
increase the demand at international level. The country has also decide to make the food
more compelling part of the sector as well as to unlock MICE business. Along with this, the
country has also decided to provide the visit with the right of information in the future. That
includes visitor app, information centre, guided sings and language provision. The country has
decided to develop the safe infrastructure such as airports, hotels, public wife and realm this
will contributes in increasing the satisfaction of the tourist. There are some positive and
negative effect on the London due to the visitor economy such as it has contributed in creating
territory jobs that has lead in increasing the local sector of the country. The country has
earned more revenue due to the visitor economy as compare to other factors. Majorly it helps
in keeping the local tradition as alive visitor are more often enjoy the culture of the country
(Tom Dieck and et.al., 2018). Furthermore, the country can make use of the revenue to
develop the infrastructure such as schools, hospital so that basic needs are provide to the
people that re living in the society. The money can be used to protect the environment as
tourism will increase the pollution in the country or state. Along with this, it helps in
developing the local state such as small industries are benefited as it contribute s in grow
mg the demand of food and crafts. That result in improving the overall economy of the
country.
However, the negative impact on the London was that the jobs are often poorly
paid are seasonal in nature that has resulted in poor growth of the economy. The major
investment goes in the hand of the private sector as most of the hospitality and tourism
sectors are owned by private individual. And the taste and preference of most of the
customers are high class hotels. Through the visitor economy the hospitality sectors are
more profited compare to other business (Duignan and Pappalepore, 2019). Moreover, the
natural environment are damaged due to increase in this sector. Likewise overcrowding and
traffic jams that result in damaging the environment of the country and the domestic
public are not able to enjoy their life. Along with this, the major threat such as Coved -19 has
affected the London and it’s visitor economy as the country was shut down and being a

tourist spot. It was more reliable on the tourism sector that has bring the downfall for the
country.
Presenting the challenges of visitor economy
There are various challenges that are being faced by the visitor economy such as
taxation, travelling market, infrastructure issues, security and cross border regulation. The
country can face issues that can be negatively impact on the growth of the country such as
downfall in the local business. The major threat that has been faced by economy
recently is impact of coronavirus that has revelry affected the tourism sector. And many
countries were no able to earn profit form last 1 year. Moreover, in 2020 there was drop of 300
to 500-billion-dollar loss in year of 2020 that is one third of the revenue earn in 2019. It has
result in the economy crises in the world (Cheer, 2017). Along with this, it has changes the
practices of hospitality sector such as poor risk management, viral globalization. The visitor
was afraid to travel due to viral infection although many country was lockdown for so
many months. However, the countries that were mainly depended on the tourism has faced
the hard time and has not earn enough revenue to deal with the pandemic threat. Along with
this, this threat has allowed the tourism sector make innovative products and services in order
to run their business in the market. Although the government must also not only depend on the
tourism sector for increasing their economy (Connell and et.al., 2017). But it should also
develop the small industries and other busies in order to earn more revenue and develop the
country. Along with this, In UK the major travel and tourism contributes 6.7 % of GDP in the
visitor economy. Since the pandemic and government restriction this sector has faced the huge
downfall.
However, the another challenge the visitor economy face is cost of vacation and
inflation. The rate of currency always fluctuate and due to that it impacts negatively and
positively on the tourism sector. Moreover, the inability of identifying the value of the
currency that means that long term price range of the tourism will be hard to find. The
decrease in the currency rate will reduce the purchasing power of income and capital gain
derived from any return. Along with this, it will increase the inflation rate and it will impact
the life style of domestic people. That will result in decreasing the tourism of the domestic
sector and lower down the visitor economy (Connell and Page, 2019). Further if the country
will not earn enough revenue form the economy then there will be no development in the

infrastructure of the country. That will increase the dissatisfaction for the people living in
the society. Moreover, the countries that mainly depends on the tourism earn revenue on
seasonal bases and due to that countries are not able to set the stable business. Due to raise
in the inflation rate the resurgent sector has increase the cost of their services. Along with
this, transportation companies have been hit hard. In addition to this, the airline services have
severely impacted as it mainly depends on the fuel and food and because of that it has
lower down the services and increase the prices (Grimmer and Vorobjovas-Pinta, 2019). Thus,
due to expensive price visitor avoids travelling and it results in creating negative impact on
the visitor economy.
Along with this, the tourism sector is heavily as and has to pay the fixed amount of
capital to the government. There is various tax that has been levied on hospitality, airlines
such as luxury tax, transportation tax and service tax. All this charges hamper the growth of
this type of industry. Moreover, it helps in increasing the visitor economy as due to paying
tax the government earn the revenue. Along with this, the government should lower the rate
in order to develop this sector in the local area as it will contribute in uplifting the economy.
In addition to this, the travel industry has high risk of the terriost and it affect the loss in the
business but also the total economy of the country (Kim and Hall, 2020.). The improper
law, terries attack do not attract the visitor and the image of the country also goes down.
Due to bad image in the international market no other state wants to collaborate for the business
and that lower down the growth of the economy. Along with this, the tourism sector is
also affected by the natural disaster such as earth quack such crises are unexpected and
due to that interface with the ability to operates.
The another challenge that country has to face is to spend high capital in building up
the infrastructure such as Roade, hospital and other tourist attract places in order to attract
more and more visitor. The host country has to sufferer form the leakage as more it earns the
double it has invest on the development. The major leakage reason is international
companies and multinational cooperation as well as the tourism sector (Page and et.al., 2018).
Moreover, for earning the higher tax rate form the tourism sector and to improve the visitor
economy the government has to invest more on the development. such as odes and safe
environment likewise proper hotel services, airport that is very expensive. For example, for
building the third airway road at Heathrow the government has to spend billions of pound.

Thus, it is very expensive for the small countries f or increasing their visitor economy
(Kim and Hall, 2020). However, if the government will invest in this area than the other
critical areas such a s education and hospital will not be developed and the countries will miss
the opportunity for earning form this sector. For instance, if the government build high quality
of educational and hospitality services it will contribute in increasing the visitor economy. As
due to quality services the visitor will be attracted more. In addition to this, the country
will face issues such as increase in price it will impact the local market. Makeover, increasing
the cost due to visitor will negatively affect the domestic people. Due to lower income the
people will be forced to leave the country and that will damage the economy of the
country (Kim, Liu and Williams, 2021). In addition, to this, the economy depends on the local
community such as the county that major sources of earning is tourism should try to develop
the alternative sources of financial income. As there are many risk associated with this
factor and because of that it can create loss in the economy.
Recommendations
 It is important to obtain the data in order to know the visitors. It is vital to gather
information in order to know the targeted audience. Destination can use website or any of
the online tool in order to know their audience well. By conducting interviews also on
can get information about their visitors and also they prefer which destination, this is
called as offline research (Moghadam and et.al., 2020). Once data is obtained about the
visitors then it can be used in making development in the economy so as to attract more
visitors.
 Seeking for partnerships, destination should be look for the partnerships with those
organisation which have same interest so that trust can be develop. Partnerships can be
done with restaurants, travel agency, local authorities, hotels etc. in order to attract
organisations for partnership, destination has to come up with marketing strategies. Then
goals and objectives can be discussed with partner organisation I order to target visitor
interest in the target country.
 Creating attractive destination website. Often visitors research on interest about the
destinations before making their travel plans (Avraham, 2020). So it is important to make
the website which is focusing on the target country solely in order to attract more
audience. Website must be filled with attractive images and videos so that curious readers

can be attracted towards the destination. Website must have consists of the detail
information of the destination so that visitor can plan accordingly. Website should have
properly mention hotel and restaurant options, eating and drinking place etc. also make
sure that website is friendly enough so that visitors can easily operate it.
 Engagement marketing, it is used in order to engage visitors and encourage them to visit
the destination (Irfan, Rasli, Sami and Liaquat, 2017). There are various marketing tools
which are available in the market which can easily attract more visitors. This can be done
through content marketing or social media marketing. As social media have large number
of users so that is why it will be easy for the destination to target their potential audience.
Promotion through social media is also cheap and easy. Now there are offline modes also
through which destination can do promotion which is word of mouth. Without putting
any efforts and costs, word of mouth can bring large number of visitors to the country.
 Destination can also use influencers for the purpose of promoting their country. The
influencers can be bloggers, celebrity, vloggers etc. as the influencers knows technique of
how to get involved with audience and also they have large audience base. Before
choosing any influencer make sure that they have more followers (Femenia-Serra and
Gretzel, 2020). as nowadays it has become easy to influence people through influencers.
Destination can also do advertisement on various travel websites. As many people visit
on travel websites on daily basis so destination can increase their visitors base by
contacting travel website.
CONCLUSION
From the above report it has been conclude that visitor economy is the amount earn due
to tourism. Hospitality and tourism industry plays major role in building the visitor economy.
Furthermore, the study has summarized about the London and its impact on the economy of
UK. Moreover, the country has made the tourism strategy in order to improve its visitor
economy. Lastly, the report has shed light on the challenges that has been faced by the
economy such as high infrastructure cost and other threat.

REFERENCE
Books and Journals
Avraham, E., 2020. Nation branding and marketing strategies for combatting tourism crises and
stereotypes toward destinations. Journal of Business Research, 116, pp.711-720.
Buhalis, D., Andreu, L. and Gnoth, J., 2020. The dark side of the sharing economy: Balancing
value co‐creation and value co‐destruction. Psychology & Marketing. 37(5). pp.689-704.
Cheer, J. M., 2017. Resilience in the visitor economy: Cultural economy, human social networks,
and slow change in the regional periphery. In Tourism, Resilience and Sustainability (pp. 61-84).
Routledge.
Connell, J. and et.al., 2017. Business engagement in a civil society: Transitioning towards a
dementia-friendly visitor economy. Tourism Management, 61, pp.110-128.
Connell, J. and Page, S. J., 2019. An exploratory study of creating dementia-friendly businesses
in the visitor economy: Evidence from the UK. Heliyon. 5(4). p.e01471.
Connell, J. and Page, S. J., 2019. Case study: Destination readiness for dementia-friendly visitor
experiences: A scoping study. Tourism Management. 70. pp.29-41.
Duignan, M. B. and Pappalepore, I., 2019. Visitor (im) mobility, leisure consumption and mega-
event impact: The territorialisation of Greenwich and small business exclusion at the London
2012 Olympics. Leisure Studies. 38(2). pp.160-174.
Femenia-Serra, F. and Gretzel, U., 2020. Influencer marketing for tourism destinations: lessons
from a mature destination. In Information and Communication Technologies in
Tourism 2020 (pp. 65-78). Springer, Cham.
Grimmer, L. and Vorobjovas-Pinta, O., 2019. From the sharing economy to the visitor economy:
the impact on small retailers. International Journal of Tourism Cities.
Irfan, A., Rasli, A., Sami, A. and Liaquat, H., 2017. Role of social media in promoting education
tourism. Advanced Science Letters. 23(9), pp.8728-8731.
Kim, M. J. and Hall, C. M., 2020. Investment crowdfunding in the visitor economy: the roles of
venture quality, uncertainty, and funding amount. Current Issues in Tourism. 23(20). pp.2533-
2554.
Kim, M.J. and Hall, C.M., 2020. What drives visitor economy crowdfunding? The effect of
digital storytelling on unified theory of acceptance and use of technology. Tourism Management
Perspectives. 34. p.100638.
Kim, Y. R., Liu, A. and Williams, A. M., 2021. Competitiveness in the visitor economy: A
systematic literature review. Tourism Economics, p.13548166211034437.

Minor, K. and et.al., 2021. Enhancing the Visitor Experience in the time of COVID 19: The use
of AI Robotics in Pembrokeshire Coastal Pathway. In Information and Communication
Technologies in Tourism 2021 (pp. 570-577). Springer, Cham.
Moghadam, F.N. and et.al., 2020. In search a medical tourism marketing pattern in Iran: The
case of cultural sensitivities. International Journal of Healthcare Management, pp.1-6.
Page, S. J. and et.al., 2018. The dark side of high performance human resource practices in the
visitor economy. International Journal of Hospitality Management. 74. pp.122-129.
Tom Dieck, M. C. and et.al., 2018. Determining visitor engagement through augmented reality at
science festivals: An experience economy perspective. Computers in Human Behavior. 82.
pp.44-53.

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