Tourism's Contribution to the UK Economy: An Economic Analysis

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Essay
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Discuss how tourism contributes to the UK economy
Tourism is the most developing industry these days as people plan trips very frequently to feel
fresh from the work pressure and stress. Hence, spending holidays by visiting new places is a
new trend these days. People spend a lot of money in traveling and tourism sector and the
income of tourism sectors contributes to the economy of the country. The UK Tourism industry
is considered one of the most successful industries all over the world. The tourism industry of the
UK stands at 5th position in the terms of largest industries in international visitor expenditure.
This industry consists of more than 206,000 businesses, contributes 9% of UK GDP and 9.6% of
employment in the UK. The UK tourism industry comprises the number of large industries
engaged in offering the products and services for the purpose of meeting the tourism needs of
visitors or travelers (Cheng, 2016). This industry mainly includes food and beverage serving
activities, water and air passenger transport, cultural activities, road and rail passenger transport,
visitor accommodation, and rental services for transport equipment.
Tourism sector creates employment for the people of UK. The income earned from the tourism
industry sector can be utilized by the Government of UK in developing the infrastructure and
providing the improved facilities. Tourism sector helps in promoting cultural awareness and in
the preservation of local traditions and culture. The foreign currency can become a help to local
people. The attractions can be secured from the income earned from the tourism industry.
Tourism sector helps in generating foreign currency. It helps in creating new job opportunities
and stimulates income, trade, and entrepreneurship. It also helps in generating a greater
collection of revenues and taxes. Tourism sector also helps in increasing regional development.
The tourism sector has some negative impact as well on the economy of the country. Tourism
sector adversely affects the environment of the country as it increases air pollution, because air
travel plays a vital role in the tourism sector. The negative impact also includes people employed
at low pay, in unhygienic and poor working conditions (Scott, et. al., 2016). Tourism destroys
local traditions and culture and benefits to the hotel industries, travel agents, and airline
companies more than it benefits the local companies. The companies in UK face competition as
foreign companies build new hotels in the UK for providing accommodation to the tourists.
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Tourism is the most important sector which affects the economy of the country as it is used to
generate foreign currency in the market. This sector reflects the beauty of various places. The
tourism sector has various threats of security.
The United Kingdom possesses potential in order to improve the condition and economy like
employment availability from the tourism sector. The tourism in the UK has been decreased
because there is an increased VAT, duty on air passenger, and visa charges, whereas some of the
countries have decreased the prices. As per the reports, it can be evident that the tourism sector
contributes largely to the UK economy. This contribution can be seen in the economic and
employment context. In terms of employment, the tourism sector has been considered as the
rapidly growing industry of the UK.
It can be estimated that the contribution of UK tourism would increase to more than £257 billion
by the year 2025. Considering this, the tourism industry has been successfully earning more than
£106 billion every year. Concerning about the size, the industry of travel and tourism is
approximately five times larger than the size of the automotive manufacturing industry. The
tourism industry contributes to more than £35 million directly to the UK GDP which implies the
five times of the total GDP of automotive manufacturing (Horner and Swarbrooke, 2016). Not
only this, but this industry also generates the income more than the mining as well as the
chemical manufacturing sector. The continuous growth in the tourism industry has been realized
that ultimately improving the UK economy. The tourism industry of UK contributes in the fastest
way than the other industries to the UK economy. The revenue generated through the tourism
industry by the UK economy is of utmost importance. This income not only contributes to the
UK economy but also to the development of the entire country in an indirect manner.
The tourism industry of the UK is considered as the labor-intensive industry that provides
employment for the high-skilled, unskilled and semi-skilled personnel. It is an avoidable concern
that the tourism industry offers a wide scope of employment to the UK economy. It helps in
improving the employment rate in the UK by providing a large number of job opportunities. As
per the reports, the tourism industry successfully generated more than 1,550,000 job
opportunities in the year 2016. This number reported a growth of more than 4% in 2017 and
reached successfully to more than 1,755,000 job opportunities. The tourism industry provides job
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opportunities in relation to airlines, hotels, travel agents, leisure services and others. In terms of
employment, the tourism industry is generating job opportunities as equal to the financial sector
of the UK.
The increasing trend of travel and tourism signifies the continuous contribution of employment
by the tourism industry to the UK economy. The reports of Deloitte show that England tourism
directly impacts the UK economy by providing more than 1.4 million jobs till 2013. This figure
implies the portion of 5% of the total jobs of the UK economy. This clearly indicates that the
tourism sector of the UK is significant for the continuous growth and development of the UK
economy (Budeanu, et. al., 2016). Considering the direct as well as indirect impact, the number
of job opportunities by the tourism industry reached 2.6 million that implies 9% of the total jobs.
As an example, it can be said that booking of one hotel room leads to the employment generation
of about 8-9 people. Apart from the internal employment, the tourist industry also provides
employment opportunities outside the industry including water supply, airport and roads and so
on.
The key contributors of the tourism industry to the UK economy are mainly comprised of
domestic tourism, inbound tourism, outbound tourism, and international tourism. The role of the
tourism industry has been widened from the attractive destinations to the significant contributor
in the UK economic growth. The key role of the tourism industry is the creation of tourism
demands by tourist attractions and travel. The UK tourism industry contributes to the generation
of foreign exchange without the exhaustion of natural resources to the large extent. Also, it does
not involve the utilization of the exporting of any type of goods. Further, the tourism industry
plays a significant role in the development of the UK infrastructure. The infrastructural facilities
of the UK get developed with the increased business of the tourism industry such as water
supply, airports, and roads and others (Andraz and Rodrigues, 2016). The local population also
gets to enjoy the newly developed or improved existing infrastructure. The infrastructure
development leads to the promotion of the greater diversification of the economy.
Due to this reason, the tourism industry also affects the other industries of the country in a
positive manner. It indirectly contributes to the development of other industries as well that
ultimately makes a positive impact on the UK economy. Therefore, it can be said that the
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economic expenditure of the UK tourism industry leads to the stimulation of the other economic
activities of the country. The construction of infrastructure opens the employment gates for the
unskilled as well as the skilled labors. In the UK, the tourism industry has been assisting in the
maintenance of international peace and understanding as well. It helps in the promotion of
international peace by enhancing the appreciation and awareness regarding the culture and
traditions of other countries. This helps in the enhancement of the cultural enrichment and
exchange.
It would not be wrong to regard the tourism of UK as a ship that bridges the gap of international
understanding through the diversification by bringing the people of different cultures and
traditions altogether. Apart from this, the tourism industry in the UK also contributes towards the
preservation of cultural heritage of the UK. Tourism is used by the people for the promotion of a
country’s cultures and traditions as well (Vanhove, 2017). It can be seen that a large number of
tourists in the UK are interested in visiting the cultural heritage of the UK. This leads to the
maintenance and development of the cultural heritage for attracting the vast number of tourists
from all over the world. There is an indirect contribution of the tourism industry in the
preservation of the environment as it discourages the industrialization at the large scale.
Therefore, it can be said that the tourism industry plays a significant role in the development and
growth of the UK economy from different perspectives.
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References
 Andraz, J.M. and Rodrigues, P.M., 2016. Monitoring tourism flows and destination
management: Empirical evidence for Portugal. Tourism Management, 56, pp.1-7.
 Budeanu, A., Miller, G., Moscardo, G. and Ooi, C.S., 2016. Sustainable tourism,
progress, challenges and opportunities: an introduction.
 Cheng, M., 2016. Sharing economy: A review and agenda for future research.
International Journal of Hospitality Management, 57, pp.60-70.
 Horner, S. and Swarbrooke, J., 2016. Consumer behaviour in tourism. Routledge.
 Scott, D., Gössling, S., Hall, C.M. and Peeters, P., 2016. Can tourism be part of the
decarbonized global economy? The costs and risks of alternate carbon reduction policy
pathways. Journal of Sustainable Tourism, 24(1), pp.52-72.
 Vanhove, N., 2017. The Economics of Tourism Destinations: Theory and Practice.
Routledge.
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