Tourism's Contribution to the UK Economy: An Essay

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Individual Essay: Discuss How Tourism Contributes Towards the
UK Economy
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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Conclusion.......................................................................................................................................7
Reference List..................................................................................................................................8
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Introduction
The tourism industry of a region provides the local, regional and national economy with an
improved scope of growth. Businesses operating in the market economy provide the local and
national economy with a boost that allows the economy of the region to develop at a sustainable
rate. Considering the UK economy, tourism allows different organisations to perform their
business operations on a global platform. The influence of tourism on the UK economy can be
observed in the general improvement of the financial state of the country.
Discussion
There is a dynamic link between the tourism industries Europe and the economic growth, which
is present there. In countries such as Greece, Cyprus, Portugal, and Spain a great growth has
been witnessed when it comes to the economic development of the tourism industry, which is
present there. In 2009, there had there had been a huge downturn in the UK tourism industry
since then because of the aforementioned countries there has been a considerable improvement.
To develop, the country should implement strategies whereby the negative effects of which are
taking place in the economy are minimised. This minimisation can be made possible by
employing cost-effective forms of strategies. Through cost-effective forms of strategies, there
can be a huge improvement in the level of customer retention (Antonakakis et al., 2015). The
contribution of tourism towards the UK economy can be observed through several identifiers.
Increase in local and regional employment opportunities for the youth and the profit earning
abilities of the organisations operating in the travel and tourism sector of the country provide the
economy of a country such as the UK to develop their economic situation. Tourism contributes
to the UK economy primarily in two ways- directly and indirectly.
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The direct ways tourism can influence the economy of a country are observed through the
providence of commodities to tourists and locals, improving the services and industries that cater
to the tourists as well as the local residents and increasing the sources where tourists can spend
their money. The indirect ways tourism help boosting the economy of the UK or any country is
by providing stakeholders with investment opportunities, increasing induced spending
opportunities for locals and tourists and contributing to the development of national GDP.
Increasing the employment opportunity for local residents also improve the earnings of the
population of the country, which leads to an increase in the national economy (Schänzel and
Yeoman, 2015). According to the study conducted by the UN in identifying the influence of
tourism on the UK economy, it has been noted that tourism has increased the growth of the UK
economy by 10% between 2016 and 2017 (Wttc.org, 2019). Based on the growth of the UK
economy and the increase of tourist activities in the country, UN observes 30% growth by 2027.
It has also been observed in the study that the primary increase in UK’s GDP through tourism
would be by indirect investment and contribution.
The contribution of tourism to the UK economy is observed through the growth of employment
opportunities as well. By providing sustainable jobs to 11.9% of the total population in the
tourism industry, allows the UK economy to increase the national GDP. The success of the
tourism industry in the UK economy in creating jobs and providing training to the unskilled
labour sector of the country allows the development of the country (Piso, 2016). Attracting
foreign investment in the country is also an indirect method through which tourism improves the
economic condition of the country. The involvement of local and regional communities allows
the growth of the national economy. Local residents get involved with the organisations
operating in the tourism sector to improve the living conditions of the tourist and engage in
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sustainable tourism activity. Improvement of the tourism sector of the UK allows improvement
of the economic condition of the local and regional traders operating in the travel and tourism
sector (De Vita and Kyaw, 2017). The local businesses enhance their business activities within
the UK market economy to cater to the needs and requirements of the domestic and international
tourists.
Inbound tourism provides the UK economy with an added income source whereas outbound
tourism reduces the income of the country’s economy. Due to Brexit referendum, the outbound
tourism had reduced, but the diminished value of pound had negatively affected the economy of
the country through tourism. The tourism industry of the UK has proved beneficial for the
country’s economy since the use of sustainable tourism strategies have ensured the local and
regional traders are able to function efficiently in the market economy despite external issues.
The development of micro and small business enterprises in the tourism industry of the UK have
provided the local economy to gain stability despite the external turmoil the country has faced
for political reasons. The success of business organisations is based on the external and internal
business environment the organisation operates in, considering the political and environmental
issues the UK’s business environment had faced in the recent years, the efficiency of the
business organisations through the appropriate implementation of strategies have allowed the
SMEs to keep the UK economy from disintegrating.
The success of the SMEs in the tourism industry can be traced back to the effectiveness of the
legislative policies the UK government had introduced to enhance the tourism industry of the
country. Several studies conducted on the impact of tourism on the UK economy have proved
that due to the improvement of legislative policies, there has been an increase in domestic
spending and business spending in the tourism industry. The national GDP of the UK has
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increased by 36% and projected to experience a growth of 55% by 2027 due to the growth of the
SME sector of the UK economy (VisitBritain, 2015). The increase of gross income through
SMEs in the UK market economy operating in the travel and tourism has improved the state of
the UK economy post Brexit referendum. Engagement of local and regional communities has
increased the scope of leisure and entertainment within the country’s tourism sector. It has been
observed in the UN’s report on tourism that the travel and tourism industry had contributed
approximately £283.4 billion to the national economy. The success of the tourism industry of the
country provides the growth of the economy an added advantage.
Increase in the employment of local residents ensure the number of unemployed youth within the
UK economy is reduced this results in an increase in the earning capacity of the population.
Several industries operating in the travel and tourism sector of the country have provided the
population of the country to develop their skills that would benefit the sector to gain trained and
skilled labour from the country’s economy. Developing skilled labour within the country allows
the UK economy to provide employment options to the residents and create job opportunities for
them. The success of the organisations operating in the tourism sector of the country is based on
the type of business the economy can offer to the tourism industry. Leisure and business
activities performed by the organisations in the travel and tourism sector provide maximum
output in finances. The efficiency of the employees and the management of the organisation in
practising appropriate CSR activities and sustainable tourism development plans allow the UK
economy to develop proper tour plans that benefit the local, regional and national economy.
The incorporation of legislative regulations that reduced complications for business organisations
operating in the tourism industry for gaining foreign direct investment in their tourism sector
allowed the UK economy to improve the financial condition of the organisation. Accepting FDI
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in the travel and tourism industry organisations proved beneficial for the success of the
companies to perform better in the competitive business environment. The robust tourism sector
of the UK provided the organisations in the UKJ economy to develop effective marketing and
business plans that allow them to involve and utilise the available resources efficiently. The
dynamic nature of the organisations functioning in the tourism sector of the UK economy is
beneficial for the success of the UK economy. The impact of tourism on the UK economy has
been beneficial post Brexit referendum as the organisations operating in the tourism sector of the
country had provided appropriate earning opportunities for the local and national economy
individually. The development of the local economy through appropriate involvement of the
local and regional communities and small business enterprises has ensured the development of a
sustainable business operation in the tourism sector.
Sustainable and effective tourism practices performed by the organisations in the UK tourism
market economy had ensured the development of the UK economy.
Conclusion
Tourism is a vital sector for the development of any country’s economy. It provides the country
with an appropriate opportunity to increase their national income through increasing of
employment opportunities for the residents. The tourism sector of the UK business environment
also provides the country with an increased opportunity to gain foreign investment. Direct and
indirect investment provided to the UK economy through tourism activities has allowed the
growth of the country’s economy.
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Reference List
Antonakakis, N., Dragouni, M. and Filis, G., 2015. How strong is the linkage between tourism
and economic growth in Europe?. Economic Modelling, 44, pp.142-155.
De Vita, G. and Kyaw, K.S., 2017. Tourism specialization, absorptive capacity, and economic
growth. Journal of Travel Research, 56(4), pp.423-435.
Piso, A., 2016. Migrant labour in rural tourism: Continuity and change. International Journal of
Tourism Research, 18(1), pp.10-18.
Schänzel, H.A. and Yeoman, I., 2015. Trends in family tourism. Journal of Tourism
Futures, 1(2), pp.141-147.
VisitBritain. 2015. Britain's visitor economy facts. [online] Available at:
https://www.visitbritain.org/visitor-economy-facts [Accessed 31 Jan. 2019].
Wttc.org. 2019. [online] Available at: https://www.wttc.org/-/media/files/reports/economic-
impact-research/countries-2017/unitedkingdom2017.pdf [Accessed 31 Jan. 2019].
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