A Comprehensive Report: Tourism's Significant Role in the UK Economy

This report provides a comprehensive analysis of the tourism sector's impact on the UK economy. It begins by defining tourism and its various forms, including cultural, business, and leisure tourism. The report then presents statistical data illustrating the sector's direct and indirect contributions to GDP and employment, highlighting its role as a significant driver of economic growth. It explores the reasons behind the rapid increase in tourism, such as globalization and improved infrastructure. The report further examines how tourism creates income, preserves culture and heritage, attracts foreign investment, and diversifies employment opportunities. It acknowledges the role of technology in boosting the tourism business. Additionally, the report also addresses the negative impacts of tourism, such as environmental concerns, price mechanism distortions, and potential exploitation of workers. Overall, the report concludes that tourism is a major force driving the UK's economic condition, while also acknowledging its challenges.

How tourism contributes towards the
UK economy?

TABLE OF CONTENTS
Discussing how tourism is affecting economy of UK.....................................................................1
REFERENCES................................................................................................................................7

Discussing how tourism is affecting economy of UK
Firstly, what is the concept of tourism? Tourism can be said as travelling undertaken by
people for having a great time. It includes activities such as camping, sightseeing, adventures etc.
The purpose of tourism could be business, leisure, any other purpose. This concept is
increasingly becoming popular in United Kingdom. Development and growth of tourism industry
in the country is contributing significantly and it is clearly reflecting in the nation's statistics
related to employment rate, GNP, GDP, living standard of people working in this industry.
Illustration 1: Contribution of travel and tourism in UK economy in 2017
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(Source : Economic contribution of the travel and tourism industry in the United Kingdom (UK)
in 2017, by sector (in billion U.S. dollars), 2019)
The above chart is showing the economic contribution made by travel and tourism sector of UK
in the year 2017. It can be seen that sector's direct contribution to GDP is 93.5 billion in Us
dollars. This is the major part of GDP's total valuation. Indirect contribution to GDP amounted
even bigger which is 266.1 billions from which it can be interpreted that travel and tourism
business in the country is one of the largest and significant driver of economic growth.
There are various reasons why tourism is increasing rapidly in United Kingdom. The very
first and foremost reason is globalisation. Better relationships and opened economy have to
increased connectivity between different countries is one of the main reason of increased
international al tourists in country. Development of communication and transport infrastructure
have increased the pace of tourism business of tour operators in the State. Purchasing power of a
person has increased globally which is a contributing factor in growth of tourism not only in
United Kingdom but all over the world. Modern generation and its mentality have led to increase
in number of tourist around the country (Brouder and et.al., 2016).
The tourism are of different forms such as cultural tourism which includes sightseeing,
exploring cultures of different places, learning about the ethnicity of UK and its surrounding
areas. Another is business tourism which is related to people travelling to places for attending
seminars, conferences, meeting or launch events of product and services or for any other
business purposes. Leisure tourism in which people prefers luxurious facilities. Nowadays, food
travelling, journalists travelling etc. are becoming popular. Organisation involves in this industry
are providing their best to the people from breadth taking luxurious accommodation facilities to
holidays packages which are easily and conveniently affordable by average earning people.
Tourism sector is considered as the most profitable and high earning sector of United
Kingdom. The Tourism ministry of country also largely emphasis on development of tourism
and hospitality infrastructure in state as this sector have the highest of capability of bringing
foreign currency. This factor is of the national importance for the government of the UK.
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Illustration 2: Forecast of Overseas Vistors to UK
(Source: Tourists to UK forecast to spend record levels in 2018, 2017)
The above bar chart, discloses the forecast figures of overseas visitors in the year 2018 by
the Visit Britain which is the tourist development authority of the country. It can be seen that
number of international tourists are increasing year after year and the organisation estimated 41.7
million of tourists visiting the country in 2018. The country was ranked third globally for its
tourism and hospitality sector generating immense wealth for its nation.
Now, the question arises that how this particular sector is significantly affecting country's
economy? The answer would be identifying factors that are developing and improving because
of growth of tourism in country.
From the few years, tourism sector have enlarged the employment opportunities in the
country and accounts for more 9 % of total employment. Such employment opportunities to the
people have increased the living standards of them. It has led them to afford the necessities of
life. Britain is expected to have a tourism sector which would have the value of around (£) 257
million in the year 2025 (Britain's visitor economy facts, 2019). Another factor how tourism
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affects the economy is the creation of income in the country. Earning of valuable foreign
exchange, and income contributes to the economic growth by the way of increased GDP and
GNP of United Kingdom.
Tourism in a way preserve the culture and heritage of nation for promoting the heritage
or cultural tourism. This is of national importance in the sense that social life is conserved. Also,
tourists prefers scenic beauty and natural wildlife parks which forces the organisations and the
legislative authority in preserving and conserving the environment and maintaining
sustainability. The subordinate benefit of this preservation is the enhancement of country's
image, enjoying reputation of being a responsible nation towards nature globally. This itself
promotes the tourism sector of UK. More popularity of tourists destination attracts the foreign
investment by the way of opening of the biggest hotel and restaurant chains etc. This contributes
to the creation of income in the country.
This sector has diversified the employment in the state which is considered as one of the
crucial positive impact on the local economy of the country. This diversification has led to
elimination of burden over other sectors of the economy which are industrial, agriculture etc. It
has provided proper balance to the economy of United Kingdom. It has promoted the
manufacturing of goods locally, providing an opportunity of developing the small producers to
make money. These local manufacturers have also been provided with new markets and large
customer base. This is due to the growth of tourism sector as more visitors are coming to the
country and utilising the services and goods of their chosen destinations in the country (De Vita
and Kyaw, 2017).
Technology has played a significant role in the growth of tourism business of UK. Proper
connectivity in terms of Internet, communication and transport facilities have boosted the
number of travellers. Organisations in travel and tourism sector are increasing improvising their
services to their domestic and international customers. Online reservations of hotels, other
ancillary activities are becoming popular these days. This have impacted the sales and
profitability of this sector in economy. Customers are getting more convenient in approaching
the exhaust places in UK as the information are easily over the web. Other economic benefit are
development of roads, airports and developing labour intensive culture (Vanhove, 2017).
For example : London is the all time favourite destination of people in their visiting list.
This is because of the natural beauty, culture, ethnicity, hospitality, food culture the place offers
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to its tourists and travellers. A person cannot thinking of planning a trip to UK without visiting
this mesmerising place. Be it the history of place, spectacular tower of London, its famous tower
Bridge, availability of world's biggest hotel chain in the city attracts customers.
The popularity of London has largely impacted its local economy. Large number of
investor are attracted for expanding their business in city, more employment has generated in
hospitality organisations due to this, it has increased the living standards of the local people
residing in London, it has resulted into the development of strong public infrastructure in the
form of large airports, solid roads, internet connectivity etc. This has also impacted the
development of outskirts of London as visitors are always in search of exploring exotic places.
This has led to creation of income in the nearby places in the London which has resulted in the
overall economic development of the country (Page and et.al., 2017).
However, there are some negative impacts on the economy because of the over
exploitation of resources by tourism sector in United Kingdom. The biggest negative effect of
tourism is its detrimental effects on environment. Hospitality firms are opening ups their
ventures in the most exotic places which is hampering the natural beauty and creating pollution
in those places. It leads to the disturbances in the price mechanism of local goods as vendors
charge more from tourists that yields them greater profits. This induces local producers to rise
their prices. People working in the travel and tourism industry are being exploited to a large
extent. Industry demands long and unusual working hours and provides very low wages to the
people working in it. Moreover, the jobs provided by tourism sector are highly responsive to
seasonal demands which creates the uncertain employment. Tourism's another considerable
negative impact is the leakage of income to foreign organisations operating in UK. Revenues
earned by this sector includes multinational organisations through which the income generated is
transferred to other nation (Mayer and Vogt, 2016).
Therefore, it can be concluded that tourism industry of United Kingdom is acting the
major force in driving country's economic condition towards a rising direction. Various stats
shows that this sector's direct and indirect contribution to economy is inevitable. It has created a
boom of employment opportunities for people, it has contributed in improving living standards
of citizens of country. However, over exploitation of natural and scarce resources by the firms in
industry is serving a major threat to UK in terms of loss of sustainability, detrimental effects to
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environment. It has created seasonal employment and of course led to exploitation of people by
demanding long working hours at very low wages.
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REFERENCES
Books and Journals
Brouder, P and et.al., 2016. Tourism destination evolution. Routledge.
De Vita, G. and Kyaw, K. S., 2017. Tourism specialization, absorptive capacity, and economic
growth. Journal of Travel Research. 56(4). pp.423-435.
Mayer, M. and Vogt, L., 2016. Economic effects of tourism and its influencing
factors. Zeitschrift für Tourismuswissenschaft. 8(2). pp.169-198.
Page, S. J and et.al., 2017. Case study: Wellness, tourism and small business development in a
UK coastal resort: Public engagement in practice. Tourism Management. 60. pp.466-477.
Vanhove, N., 2017. The Economics of Tourism Destinations: Theory and Practice. Routledge.
Online
Economic contribution of the travel and tourism industry in the United Kingdom (UK) in 2017,
by sector (in billion U.S. dollars). 2019. [Online]. Available through
<https://www.statista.com/statistics/298260/economic-impact-of-the-travel-and-tourism-
industry-in-the-united-kingdom/>
Britain's visitor economy facts. 2019. [Online]. Available through
<https://www.visitbritain.org/visitor-economy-facts>
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