Tourism's Contribution to the UK Economy: A Comprehensive Analysis

Desklib provides past papers and solved assignments. This report analyzes tourism's contribution to the UK economy.

Tourism contribution in the UK
Economy
1

TABLE OF CONTENTS
Introduction......................................................................................................................................1
Discussion........................................................................................................................................2
Conclusion.......................................................................................................................................6
References........................................................................................................................................7
2

Introduction
Currently, the travel and tourism industry is the largest civilian industry that is majorly
contributing to the UK economy by providing quality tourism and hospitality services to
customers. The current topic will discuss that how the travel and tourism are directly or
indirectly contributing in different sectors in the UK such as employment and GDP and hence
enhancing overall growth and development of the economy as well as the country. The topic will
discuss the different components of travel and tourism which are contributing to the UK
economy that includes business and leisure travel & tourism and domestic & foreign travel and
tourism.
1

Discussion
Currently, the travel and tourism industry in the UK is directly as well as indirectly contributing
to the growth of the economy and the country. The industry deals in different commodities and
services for satisfying needs and expectations domestic as well as foreign customers or tourists.
Direct contribution to the economy
The travel and tourism industry in the UK directly contributes in the UK economy by making
internal spending in the different commodities and services that include accommodation, food &
beverages, transportation, entertainment, attractions and cultural sports and recreational services.
The direct contribution of the travel and tourism to the economy can be assessed by identifying
total spending by the residents and non-residents for the leisure as well as business purposes.
Also, government in the UK individually make spending on the travel and tourism by spending
on the cultural heritage visitor attractions and recreational (Antonakakis et.al, 2016). The
industry also majorly directly contributes to the UK economy by spending on food & beverages,
hotels, restaurants, airlines, travel agencies and other leisure services.
Indirect contribution to the economy
Apart from the direct contribution by the travel and tourism industry on the UK economy, the
industry also indirectly contributes in the economy by spending in different sectors, commodities
and services. The industry indirectly contributes by making investments in different activities
such as the construction of new hotels, restaurants, and purchase of aircraft, airport, etc. The
government spending in travel and tourism also majorly contributes in the economy by making
investments in the different activities such as security services, aviation, administration, tourism
promotion & marketing, etc. (Antonakakis et.al, 2017). The travel and tourism also contribute in
the economy by making domestic purchase from suppliers of commodities and services such as
food& beverages, cleaning agents for hotels services, IT services for travel & tourism agencies
and catering services and fuel for airlines.
The travel and tourism industry in the UK also make an induced contribution in the economy of
the country by making spending for direct and indirect employees those who are associated with
2

the industry. The industry spends on direct and indirect employees for providing different
commodities and services such as food & beverages, clothing, housing, transportation services
and other household goods. The industry hires employees for providing different tourism and
hospitality services to tourists during tour and travel so that needs of expectations tourists can be
fulfilled efficiently and effectively (Getz and Page, 2016).
Total contribution to the economy
The travel and tourism industry is making an overall contribution to the UK economy by making
investments in different sectors, commodities and services. As per statistical report and data of
the year 2016, it has identified that the travel and tourism industry in the UK is contributing
3.4% of the total GDP and it has risen by the 2.9% in 2017. The industry has contributed to the
economy by investing and generating return from different industries such as travel agents,
hotels, restaurants, leisure industries, airlines and passenger transportation (Hadjikakou et.al,
2014). It has estimated that the direct contribution by the travel and tourism to the GDP will
grow by 2.2% P.A. by 2027. As per statistical data it has identified that the total contribution of
the travel and tourism to the GDP of the UK has increased 213.8 billion British pounds in the
year of 2017, and has increased 218 billion British pounds in the year of 2018 and also it has
forecast that contribution to the GDP will reach 265.2 billion British pounds by the year of 2028.
As per statistical data of year 2016, it has identified that travel and tourism industry in UK has
created 1,589,500 jobs in the year of 2016 that was 4.6% of the total employment. It has also
estimated that travel and tourism industry will generate 1,808,000 jobs by 2027 that will be of an
increase in 1.1% P.A (Antonakakis et.al, 2015). The growth rate of the total contribution of the
travel and tourism industry to employment in the UK account for 4.6% in 2017, 1.4% in 2018
and it is estimated that growth will account for 0.8% in the year of 2028. Tourism industry in the
UK is creating employment opportunities for local skilled people in different tourism activities
and sectors that include accommodation, transportation, food & beverages and entertainment
sectors (Kasimati, 2016).
The tourism industry hires skilled employees for providing quality tourism and hospitality
services to tourists during tours and travel. Hotel organisations in the UK employ people to serve
customers with best hospitality services so that needs and expectations of tourists can be satisfied
3

those who come to visit different natural, cultural and heritage sites in the country. The
transportation organisations hire employees to travel and tour tourists at different attractions and
historic places (Smith, 2014). Also, travel and tourism organisations in the UK appoint tourist
guides that guide tourists during tour and travel and provide relevant information about historic
event, cultural sites and natural attractions to tourists to fulfil their visit and tour purposes.
Statistical data present that domestic tourism expenditure in the UK was at 136.2 billion British
pounds in 2017, 138.3.2 billion British pounds in 2018, and it has forecast that tourism
expenditure will reach at 163.5 billion British pounds by 2028. Also, spending of the
international tourists that includes business and leisure travel spending by international tourists
was valued 28.6 billion British pounds in 2017 and 29.8 billion British pounds in 2018 (Xu, and
Fox, 2014).
Therefore, travel and tourism industry contribute to the UK economy by making investments in
different commodities and services and generating employment opportunities for local people in
the country. Also, government support the travel and tourism industry by spending on marketing
and promotion of tourism, security, aviation, transportation and developing natural, heritage and
cultural attraction sites that directly or indirectly contribute in the UK economy (Antonakakis
et.al, 2015).
Impact of the heritage tourism on the UK economy
Cultural heritage tourism can be defined as travelling to experience places, activities and
artefacts that represent fact and stories of past and present people, natural, cultural and historical
events. Cultural heritage tourism is majorly contributing in the UK economy by attracting large
numbers of domestic as well as international tourists to visit cultural and heritage sites and
spends on food& beverages, transportation, accommodation, entrainment and other tourism
services (Hartmann, 2014). More spending of domestic as well as international tourists on
visiting cultural and heritage sites will contribute more towards the UK economy. There are
various heritage attractions in the UK, and some are the National Maritime Museum, British
Motor museum, Battle Abbey, Dover Castle, the British Museum, the Queen House, etc. which
attract large numbers of tourists from different cities and nations (Shaw, 2014).
4

Heritage tourism is an important part that is contributing majorly in the UK economy by
generating income through providing travelling experiences to tourists about the historical and
cultural attraction sites (García et.al, 2017). As per statistical data of 2015, it has identified that
domestic as well as international tourists made 192 million trips to visit different heritage,
historical, cultural and natural attraction sites in the UK. During this, the heritage tourism
generated 386,000 jobs and contributed around £20.2 billion gross value added to the UK
economy. It has identified that heritage tourism in the London individually contributed £5.7
billion gross value added to the UK economy. Also heritage tourism in the England & Wales,
Scotland, and North East is also majorly contributing in the UK economy by providing travelling
experiences to tourists and visiting them at different cultural, heritage and natural attraction sites
(Graham et.al, 2016).
5

Conclusion
The current topic has discussed to identify how tourism is contributing to the UK economy and
enhancing the economic growth of the country. As per discussion, it has concluded that travel
and tourism are majorly directly as well as indirectly contributing in the UK GDP. Tourism
industry is directly contributing by making investments in various commodities and services
such as accommodation, food & beverages, transportation, entertainments, attractions and
cultural sports and recreational services. Various statistics have provided for assessing the impact
of travel and tourism on the UK GDP and employment sector. Also, various components of
travel and tourism have discussed such as leisure travel spending, business travel spending,
domestic spending and foreign visitor spending that directly or indirectly contribute to the
growth of the UK economy. The topic has also highlighted the impact of heritage tourism that
majorly contributes in UK economy by providing travelling experiences to tourists of different
natural, heritage and cultural sites.
6

References
Books and Journals
 Antonakakis, N., Dragouni, M. and Filis, G., 2015. Tourism and growth: The times they
are a-changing. Annals of Tourism Research, 50, pp.165-169.
 Antonakakis, N., Dragouni, M., Eeckels, B. and Filis, G., 2015. Tourism and economic
growth revisited: Empirical evidence from a Panel VAR approach.
 Antonakakis, N., Dragouni, M., Eeckels, B. and Filis, G., 2016. Tourism and economic
growth: Does democracy matter?. Annals of Tourism Research, 61, pp.258-264.
 Antonakakis, N., Dragouni, M., Eeckels, B. and Filis, G., 2017. The tourism and
economic growth enigma: Examining an ambiguous relationship through multiple
prisms. Journal of Travel Research, p.0047287517744671.
 García-Hernández, M., de la Calle-Vaquero, M. and Yubero, C., 2017. Cultural heritage
and urban tourism: Historic city centres under pressure. Sustainability, 9(8), p.1346.
 Getz, D. and Page, S.J., 2016. Progress and prospects for event tourism research. Tourism
Management, 52, pp.593-631.
 Graham, B., Ashworth, G. and Tunbridge, J., 2016. A geography of heritage: Power,
culture and economy. Routledge.
 Hadjikakou, M., Chenoweth, J., Miller, G., Druckman, A. and Li, G., 2014. Rethinking
the economic contribution of tourism: case study from a Mediterranean Island. Journal of
Travel Research, 53(5), pp.610-624.
 Hartmann, R., 2014. Dark tourism, thanatourism, and dissonance in heritage tourism
management: New directions in contemporary tourism research. Journal of Heritage
Tourism, 9(2), pp.166-182.
 Kasimati, E., 2016. Does tourism contribute significantly to the Greek economy? A
multiplier analysis. European Journal of Tourism, Hospitality and Recreation, 7(1),
pp.55-62.
 Shaw, G., 2014. Entrepreneurial cultures and small business enterprises in tourism. The
Wiley Blackwell companion to tourism, pp.120-131.
 Smith, S.L., 2014. Tourism analysis: A handbook. Routledge.
7

 Xu, F. and Fox, D., 2014. Modelling attitudes to nature, tourism and sustainable
development in national parks: A survey of visitors in China and the UK. Tourism
Management, 45, pp.142-158.
8