Tourism's Economic Contribution to the UK: A Comprehensive Report

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Assessment 2: Discuss how Tourism contribute toward the
UK economy
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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
Conclusion.....................................................................................................................................11
Bibliography..................................................................................................................................12
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Introduction
The activity of tourism has been popular among people all across the world for very long time
span. In the contemporary years, the rate of business travelling as well as leisure tourism along
with others, to the United Kingdom, and other tourist destinations, has increased significantly.
This has influenced the nations economically, socially, as well as ecologically. For instance, the
travel and tourism sector has contributed towards in a direct manner the economy of the United
Kingdom, in a positive way. It has created million of job, increased the GDP rate, assisted in
social developments and many others. In this study, the economic contributions Made by the
industry of travel and tourism towards the United Kingdom will be discussed. The manner in
which the concerned sector has influenced conditions of the concerned country including the
positive as well as the negative effects will be explained in this study.
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Discussion
The sector of travel and tourism has contributed largely towards the economy of the United
Kingdom. It has been found that, the spending of the inbound tourists to the concerned nation has
assisted to generate huge amount of revenue. The contributions include the direct inputs from the
tourism sector along with the indirect inputs from then related industry, such as hospitality as
well as events. As the hospitality industry, is a crucial element of the broader tourism sector, the
contributions made by the former can be included as well. On the other hand, many people travel
from one destination to another for events and other as such purpose, which also assists the travel
and tourism industry to contribute further towards the economy. According to the information,
which has been extracted from Visitbritain.org (2019), the tourism industry has been capable of
delivering an amount of around £58 billion in terms of GVA (Gross Value Added). This in turn
has accounted for about 4.1 percent of the total GDP (Gross Domestic Product) of the United
Kingdom. In the context of employment, it has been found that the tourism industry directly
supports over than 1.75 million jobs all across the concerned country.
Figure 1: Breakdown of tourist expenses in the United Kingdom by geography
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(Source: Visitbritain.org, 2019)
In addition to that, it has also been discovered that the expenses in the tourism economy of
around £113 billion support the economic activity of the United Kingdom during the year 2013.
The amount was elevated form the previous year, which had accounted for around £102 billion.
There are major economic impacts caused by the visitor economy through the means of its
interaction with various other businesses within the supply chain. It has been observed that the
entire contribution including the direct, along with indirect, as well as induced influence of the
tourism economy is parallel to an estimate of £161 billion. This can also be accounted as the
11.4 percent of the exceptional GDP of the nation during the year 2013 (Visitbritain.org, 2019).
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Figure 2: Total Amount of tourist expenses in the United Kingdom
(Source: Visitbritain.org, 2019)
The economy of the United Kingdom is also benefitted positively by domestic travelling. It has
been discovered that an amount of around £19 billion was spent on domestic overnight flights in
the year 2017. In addition to that, inbound tourists visiting England from oversees spend around
£21.4 billion in the same year, which had accounted for over than 34 million trip in total. On the
other hand, it has also been found that travellers made around 1.5 million single day trips to
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various English destinations, which has amounted to around £50.9 billion (VisitBritain.org,
2015).
It has been found that the heritage tourism is an integral element of the economy of the United
Kingdom in terms of positive contribution. During the year 2015, domestic as well as global
tourists together made many trips to visit the different cultural, natural, along with historic
heritage assets of the concerned nation, which had accounted for 193 million trips in total. This
particular niche of the tourism sector was capable of supporting around £20.2 billion in Gross
Value Added to the GDP of the United Kingdom, along with providing almost 0.4 million jobs.
In addition to that, it has also been discovered that the largest contribution made in terms of
economy in the city of London. In the concerned city, the heritage tourism industry is estimated
of providing support through a contribution of almost £6 billion gross value added
(Oxfordeconomics.com, 2019).
It has been deduced so far that domestic tourism is as important for the economic growth of the
United Kingdom as the inbound international tourism. It has been found that through domestic
tourism, an amount of £7.5 billion has been spent on domestic tourism in the UK, which in turn
has contributed towards the economy of the nation positively, providing scopes of more
developments. Additionally, it has been discovered that 60 percent of the overall contribution
from the domestic tourism is generated from the residents of the United Kingdom making single
day trips as well as going for holidays within the nation. Therefore, this implies that the heritage
tourism contributes towards the entire output of the economy of the United Kingdom. When
measure through the assistance of gross domestic products it amounts up to £7.4 billion, on an
annual basis (Heritagefund.org.uk, 2019).
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Figure 3: The key facts as well as trends in the travel and tourism sector in England
(Source: VisitBritain.org, 2016)
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The industry of travel and tourism has provided employment opportunities, within the United
Kingdom in a direct manner. In the year 2017, the concerned sector has been capable of
generating employment scopes to around 2 million people in a direct manner. The employment
opportunities created by the travel and tourism sector between the span of 2012 to 2018 is
illustrated in the figure below, along with an additional production regarding the year 2028.
Figure 4: Direct contribution of the Tourism Sector in terms of employment opportunities
in the United Kingdom
(Source: Statista.com, 2019)
During the time span of 2009 to 2014, employment in the sector of tourism has increased. It has
been found that it elevated from 2.66 million in 2009 to almost 3 million in 2014
(Tourismalliance.com, 2019). The sector is also considered as the third largest employer in the
United Kingdom, accounting for about 9.5 percent of the overall employment. In addition to
that, as it is one of the fastest growing industries, it will require more human resources in the
future; thus, tourism industry will create more job opportunities for people and contribute further
to the UK economy positively.
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Figure 5: The economic contribution of the tourism sector towards the growth of the
United Kingdom
(Source: Visitbritain.org, 2019)
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However, the travellers from various European regions have expressed themselves in a
heterogeneous manner at the time of the “Global Economic Crisis.” This occurred due to
aspects such as difference in preferences as well as willingness in terms of paying for travelling
(Eugenio-Martin and Campos-Soria, 2014). As a result, the tourism expenses reduced as well,
affecting the economy of the United Kingdom negatively. Due to the cutbacks of the tourist, the
concerned sector suffered greatly, resulting less amount of revenue generation. In addition to
that, people were also laid off from job during this time, leading to employment crisis. However,
the conditions became better with the passing of time. At present, the travel and tourism sector of
the United Kingdom is considered as the fastest growing industry contributing largely towards
the economic development of the nation.
As per the data extorted from VisitBritain.org (2015), it has been found that the tourism industry
will continue providing employment opportunities all across the United Kingdom in the future.
Additionally, according to the Deloitte Reports, it has discovered that the marginal revenue
needed for creating a job within the concerned country is estimated around the amount of
£54,000. Therefore, for each of the 1 percent elevation in the overall spending in the United
Kingdom tourism, it can be predicted that the “full time” equivalent employment will also
increased by an amount of 0.89 percent. The industry of travel and tourism is expected to grow
and expand at a yearly rate of around 3.8 percent up to the year 2025. This is considered
comparatively faster from the UK economy on the whole, with an expected yearly rate of about
3 percent per annum. This rate is much faster in comparison to the industries such as retail,
manufacturing and others.
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Conclusion
It has been deducted, from the above study that tourism has contributed towards the economy of
the United Kingdom in a positive manner. The concerned industry is one of the fastest growing
sectors within the United Kingdom contributing towards the growth of GDP and providing
employment opportunities to millions of people. It has been found that the sector of travel and
tourism has contributed for 11.4 percent of the GDP in the concerned nation during the year
2013. In the year 2017, tourism had provided scope of employment to around 1.72 million
people. The contributions had decreased during the global economic crisis. This in turn has
affected the economy of the UK negatively. Nevertheless, the situation has become better with
the course of time. It is predicted that the sector of travel and tourism will continue growing up
to the year 2025 by a rate of 3.8 percent, contributing towards the UK economy in a positive
manner.
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