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

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Discuss how tourism contributes towards the UK economy
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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
Conclusion.......................................................................................................................................7
Reference List..................................................................................................................................8
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Introduction
Tourism can be defined as traveling or touring for the purpose of business or fun or pleasure. The
process of attracting tourists and providing all the necessary requisites to the tourists like
accommodation, food, and entertainment is also a part of tourism. Tourism can be international
or local, that is, the traveler may choose to travel to international destinations or within the
boundaries of his or her country. Tourism is a vital sector or industry and plays an important role
in the development of the country as it contributes towards the economy of the country.
In this essay, the contribution made by tourism towards the economy of the United Kingdom has
been described. The effects of tourism on the people who reside at the tourist places, that is, the
social impact of tourism have been elaborated along with the impact of tourism on the
environment have been portrayed.
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Discussion
Tourism plays a vital role in the United Kingdom as it is estimated that by 2025 the tourism
business will grow and its worth will be over two hundred and fifty seven pounds. The tourism
industry of the United Kingdom supports approximately four million jobs, that is, it accounts for
approximately 11% of the total number of jobs in the country. Tourism is crucial and makes
positive contribution towards the United Kingdom economy (VisitBritain.org, 2016). As per
records, tourism is one of the chief causes that made a positive impact on the economy of the
United Kingdom in 2012. The impact of tourism on various sectors of the United Kingdom is
inevitable as it makes a huge contribution in every sector of the country.
One of the biggest contributions of tourism on the United Kingdom economy is the generation
of employment, for example, the tourism of Stonehenge employs only local people, which make
a positive contribution towards the economy of the country. Hadrian’s Wall is another tourist
attraction of the United Kingdom that employs the local people and generates employment in the
country (Séraphin et al., 2018). It raises the standard of living of the people and provides them a
source of income. Tourism industry makes a contribution towards the infrastructure of the
country as well. The total contribution of tourism on the GDP of the country is about 10.8% in
2018.
Heritage tourism is another aspect of tourism that means the traveling to heritage places or spots
of the country. It plays an important role in the tourism of United Kingdom as in 2015 tourists
both domestic and international made about more than 190 million trips to the heritage, historical
and cultural tourist spots of the country (Mathew and Sreejesh, 2017). The heritage tourism
sector of the United Kingdom supports about 400,000 jobs in the country and contributes about
20.2 billion pounds to the Gross Domestic product or GDP of the country. The region of Wales,
North East, and Scotland is well known for heritage tourism. This sector contributed
approximately 2 % of the total output of the sector in the economic field including the direct
impact, indirect impact and the induced impacts.
Tourism also enables the country to develop and grow as it boosts the development and
maintenance of local infrastructure as well as the services. It aids in the development and
maintenance of roads and highways to facilitate the locals and tourists to have a safe and
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convenient journey (VisitBritain.org, 2015). The government of the country gives special
attention in the development and maintenance of infrastructure at the tourist spots so that the
tourists are encouraged to come again and that the services and the atmosphere makes a positive
mark on the tourists. Tourism not only generates employment but also generates income through
the expenditures that the tourists make which is about 36 to 56 billion pounds in the United
Kingdom.
The tourism sector of the United Kingdom has been the fastest growing segment since 2010 in
terms of employment. Tourism made a direct contribution towards the GDP of the United
Kingdom of about 75 billion pounds in 2017. It is expected to increase by 1.9% per annum from
2018 to 2028. The total contribution of the tourism sector in the GDP was about 213.8 billion
pounds in 2017 and is expected to rise by 10.8% per annum until 2028 (Oxfordeconomics.com,
2019). It also makes a huge contribution in the generation of employment as in 2017 as it
directly supported 1,716, 500 jobs in 2017 and it is expected that it will rise by 5.2% until 2028.
The tourism sector supported about (in total) 4,055,000 jobs, that is, 11.6% of the total
employment in the country in 2017. It is expected to rise by 12.1% until 2028. Visitor exports
created about 4.7% of the overall exports in 2017. It produced 28.6 billion pounds in 2017 and it
has been predicted that it will grow fast, that is, approximately by 2.8% per annum in ten years,
that is, from 2018 to 2028. The investment made by the government of the United Kingdom is
estimated to rise by 5% in total until 2028. In 2017, the investment made by the government was
approximately 28.6 billion, which is approximately 4.7 % of the total investment by the
government.
Tourism increases the demand of food and other facilities in the areas of tourism, which makes
a positive impact on the economy of the country since it aids the country to generate more
income. It brings more money for the country especially the area of tourism. It creates more
employment opportunities and enables the local residents to conserve their tradition and heritage.
The money so earned from the tourists aids the government of the United Kingdom to invest on
the protection of the natural background of the country (Page et al., 2017). It aids the country to
bring in foreign exchange and raises the standard of living of the people residing in the areas of
tourist attraction as it aids them to earn money and make profit by enabling to provide
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accommodation and other services like food, beverages, and other basic amenities to the tourists
thereby, assisting them to increase their revenue.
The Travel and Tourism industry specifically has a direct and indirect influence on the local or
overall economy of UK; sometimes these can frequently be largely different between countries
depending on the complex structure of the particular sector but the main thing that matters is how
well connected the travel and tourism operations are with the domestic economy. The greater the
connection or linkage is, higher will be the levels of domestic economy activity and development
and this happens when the travel and tourism organizations source their products and services in
the local market. However, when the travel and tourism organizations rely on imports and
exports in order to supply the demands and expectations, it leads to low levels of economic
connections or linkages. A majority of the research and studies display the positive impacts and
profit generated and contributive to the payment balance and deployed revenue provided by the
government (assets.publishing.service.gov.uk, 2019).
However, the tourism industry has a negative effect on the overall UK economy with every
tourist destinations suffering economically. The fragility of the economic environment with the
aspect of instability present due to the reason of altering tourist routes, unproductive exposure,
and altering fashions of the tourist. This eventually leads to the development of an inflationary
spiral that tends to be sublimative with the different aspects such as price and taxation affecting
the domestic population (Fang et al., 2016). The people or the organization directly involved in
the specific industry gains enormous benefits but the same is not in the case of domestic
population. There occurs disturbance of conventional dynamic sectors of capital funding
destinations within the specific areas of travel and tourism development. The UK currency gets
affected and is at loss as the foreign currency or capital is not limited to the domestic influence
or effect and it leaves the in receipt of the country (Hojeghan and Esfangareh, 2011). According
to some local UK authorities, for a long-term basis the poor productivity generated from the
tourism industry tends to have a negative and depressive influence on the growth and
development of the local economy. The most concernable negative impact that tourism has on
the overall UK economy is giving rise to inflation, the greater levels of purchasing intention than
that of the overall resident population eventually leads to the escalation in the prices of food and
services (Nissan et al., 2011).
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Conclusion
The purpose of the assignment was to provide the learner with the understanding regarding the
negative effects of tourism on the overall UK economy. It can be concluded that there are
various kinds of negative impacts that tourism has such as damaging of the landscape,
vandalism, inflation and many more. The local products and services tend to become more
expensive in prices as because the tourists tend to spend more. Tourism influences the economies
via three vital interrelated routes i.e. direct, induced and indirect effects. These particular impacts
and the complex structure of the travel and tourism sector predict the economic influence of the
sector on the country. The overall influence of tourism on the aspect of income is negative due to
the reason of insufficient evidence on revenue and wage effects at the world level.
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Reference List
Assets.publishing.service.gov.uk. (2019). [online] Available at:
https://assets.publishing.service.gov.uk/media/57a089f2ed915d622c000495/
Tourism_Impacts_employment_gender_income_A_Lemma.pdf [Accessed 23 Jan. 2019].
Fang, B., Ye, Q. and Law, R., 2016. Effect of sharing economy on tourism industry
employment. Annals of Tourism Research, 57(1), pp.264-267.
Hojeghan, S.B. and Esfangareh, A.N., 2011. Digital economy and tourism impacts, influences
and challenges. Procedia-Social and Behavioral Sciences, 19, pp.308-316.
Mathew, P.V. and Sreejesh, S., 2017. Impact of responsible tourism on destination sustainability
and quality of life of community in tourism destinations. Journal of Hospitality and Tourism
Management, 31, pp.83-89.
Nissan, E., Galindo, M.A. and Méndez, M.T., 2011. Relationship between tourism and economic
growth. The Service Industries Journal, 31(10), pp.1567-1572.
Oxfordeconomics.com (2019). The impact of heritage tourism for the UK economy. [online]
Available at: https://www.oxfordeconomics.com/recent-releases/the-impact-of-heritage-tourism-
for-the-uk-economy [Accessed 23 Jan. 2019].
Page, S.J., Hartwell, H., Johns, N., Fyall, A., Ladkin, A. and Hemingway, A., 2017. Case study:
Wellness, tourism and small business development in a UK coastal resort: Public engagement in
practice. Tourism Management, 60, pp.466-477.
Séraphin, H., Platania, M., Spencer, P. and Modica, G., 2018. Events and Tourism Development
within a Local Community: The Case of Winchester (UK). Sustainability, 10(10), p.3728.
VisitBritain.org (2015). Britain's visitor economy facts. [online] Available at:
https://www.visitbritain.org/visitor-economy-facts [Accessed 23 Jan. 2019].
VisitBritain.org (2016). Economic impact and employment. [online] Available at:
https://www.visitbritain.org/economic-impact-and-employment [Accessed 23 Jan. 2019].
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