Helen Peters, Chief Executive of Shakespeare’s England – the DMO for South Warwickshire – discusses the challenges and opportunities that the UK inbound tourism industry faces in the coming years.
Both the King’s Coronation and the weak British pound should be creating the perfect mix for UK destinations as international travellers seek to witness a piece of British history in the flesh for a bargain price, but there is a real danger that opportunities such as this could be overshadowed unless there is a paradigm shift in the government’s outlook on the tourism industry.
International inbound tourism to the UK is worth approximately £31bn a year and supports 1.5 million jobs according to a recent report from ABTA and UKinbound, underlining its significance to the country’s economy, yet there appears to be a lack of focus on the industry from the government – underlined none more than with the Autumn Statement and mini budget where tourism was largely overlooked.
The government did a great job at supporting the wider tourism industry during Covid, but those businesses that survived, are trying to thrive, and need a long-term road map for growth. The best chance they have of that is if we have a government department dedicated to tourism – which is equivalent to DCMS, BEIS and DfT rather than a standalone tourism minister – that will support the dedicated work that is already being done by trade associations such as UKinbound to lobby for matters that can help to unlock growth.
That way, there would be a greater government focus on addressing tourism issues I am about to outline, which will in turn help destinations to capitalise on not only mainstream events, but moments in time when the eyes of the world will be on our country.
The biggest issue threatening the long-term futures of many hospitality businesses is the difficulty in recruiting staff at supervisor level – where 50% of interviewees just do not show up for an interview! Not being able to fill vacancies appears to be an emerging theme across various sectors, but unlike some industries, this isn’t a skills issue for the tourism and hospitality industry, but more to do with foreign workers who would have filled these roles no longer there to do so, and a lack of appetite from home-grown talent to take up the opportunities. A credible solution for hospitality and tourism specifically would be to re-look at visa restrictions to open up the talent pool available to businesses.
This suggestion comes at a time when the government is trying to halt immigration numbers with no tourism voice around the table to stress how this could impact industries such as ours. If this recruitment crisis continues, then the alternative is that hospitality businesses will begin limiting their opening hours, or even shutting up shop altogether – which we are already starting to see in some places due to rising energy costs.
Limiting opening hours is not ideal at the best of times, let alone during a cost-of-living crisis where all businesses, hospitality included, are needing to work harder to persuade consumers to spend money.
Those likely to pump the most money into the UK economy are overseas visitors, yet worryingly, figures from Tourism Alliance show that over the past 12 months the UK has also lost 83% of its overseas student visitors compared to pre-pandemic levels due to new passport rules for those of school age – 83%! Let that sink in for a second. That is a huge slice of the UK’s international tourism market – surely we need to be making it easier for under-18s to travel to Britain by re-introducing the use of ID cards for EU students if they are travelling with a passport-carrying adult.
To handicap the industry even more, the removal of tax-free shopping feels like a missed opportunity that could further incentivise overseas travellers to visit the UK. There are claims that tax-free shopping costs the UK around £2bn, but if a proper OBR report was done on this, I believe the government would find this is more like £250 million to £350 million, and when you take into account the incremental spend around tax free shopping, it becomes a revenue driver – not a cost.
These hurdles mean that marketing efforts to sell Britain to overseas visitors will undoubtedly need to increase, but that requires more budget, at a time when VisitBritain’s marketing budget is a fraction of what many of our competitors have available to spend.
There is an overarching theme here in that there doesn’t feel like there is any evidence on a risk assessment by government on how their policies are affecting certain industries, including tourism.
I fear that any lobbying on issues relating to the tourism industry will remain trapped in the long grass unless the tourism industry has its own standalone Secretary of State for tourism that will provide us with more power when it comes to decision making – rather than the status quo where the industry is currently impacted by decisions made by various departments.
All that said, I want tourism businesses to know that there are reasons to be optimistic for the year ahead.
The UK is revered across the globe with pent-up demand from markets such as the USA, Canada and India that I have seen first-hand from my recent travels, underlining that events like the King’s Coronation are golden springboards that tourism businesses can use for longer term growth – but as an industry we will not be able to fully capitalise on this in the long-term without a louder voice in Number 10.
