Importance of the UK travel and tourism industry - Essay Example

Importance of the UK travel and tourism industry After three years of downturn for the tourism industry, it robustly rebounded in 2004 with more than 760 million arrivals globally - an increase of around ten per cent over 2003. This was indeed a welcome change after three years of stagnation following the September 11 attacks, the SARS crisis and the Iraq war, almost all destination markets recorded substantial growth. Tourism is one of the largest industries of the world, and has recorded spectacular growth, aided by the global economies showing optimistic turnarounds. Its importance to the economy and employment cannot be emphasized enough. Tourism is one of the largest industries in the UK, accounting for 3.5% of the UK economy and worth approximately 74.2 billion in 2003. The UK is ranked as the world's fifth largest travel and tourism economy and is expected to grow by 5.1 per cent in 2005, an increase on the 4.0 per cent growth in 2004. (Source :< http://www.pkf.co.uk/web/PKF800.nsf/pagesbyID/IDDF926479AACAD7FC8025706000465A6COpenDocument>). Number of people employed in the industry in the UK It is estimated that there are 1.4 million jobs in tourism in the UK, some 5% of all people in employment in the UK amounting to more jobs in tourism than in construction or transport put together. Of these, approximately 130,400 of these jobs are in self-employment. Labour Market Trends:September2004Employment in the tourism industry (September 2004): Total (millions) Tourism-related (millions) Total employment 28.4 1.42 Employee jobs 24.6 1.29 Self-employment 3.6 0.13 The broader perspective of the Travel & Tourism economy (direct and indirect) is expected to create 16,590 new jobs for the UK economy for a total of 2,857,300 jobs dependent on Travel & Tourism or 9.3 per cent of total employment. (Source from website < http://www.visitbritain.com/corporate/factsfigures/index.aspx) Inbound, outbound, and domestic tourism Inbound tourism: When tourists visit from overseas in to UK, this is inbound revenues for the UK. The 27.8 million overseas visitors in 2004, spent 13 billion in the UK. Total visits for 2004 recorded were, 27.8 million, a 12% increase compared with 2003, and an increase of 10% in spending to 13 billion. In 2004, the UK ranked sixth in the international tourism earnings behind the USA, Spain, France, Italy and Germany. The top five overseas markets for the UK in 2004 were: Country Visits (000) Country Spend ( m) USA 3,616 USA 2,400 France 3,254 Germany 825 Germany 2,968 France 769 Irish Republic 2,578 Irish Republic 760 Netherlands 1,620 Spain 618 (Source from website < http://www.visitbritain.com/corporate/factsfigures/index.aspx) The UK industry is expected to benefit from strong inbound traffic to post GBP34.9 -13824 (US$66.6 billion) in total Visitor Exports in 2005 or 11.5 per cent of total exports. Outbound Tourism: The number of visits abroad made by UK residents has almost tripled since 1984, to a record 64.2 million visits in 2004. Two-thirds of these visits abroad were holidays, just under half of which were package holidays. Spending on visits abroad by UK residents increased to a record 30.3 billion, a fourfold increase between 1984 and 2004 in real terms, and a 10 per cent increase between 2003 and 2004. (Source from website< http://www.statistics.gov.uk/cci/nugget.aspid=178>) Domestic tourism: The total revenue garnered was to the tune of 13.7 billion in 2003 by the UK residents and they took 70.5 million holidays of one night or more. Of these 22.3 million was business travel comprising of overnight business trips spending 6.1 billion while the rest was leisure travel amounting to 34.3 million overnight trips to friends and relatives spending 3.4 billion, overall with an expenditure estimated to be over 59 billion in 2003. Expenditure from domestic and inbound tourism 2001 ( billion) 2002 ( billion) Spending by overseas residents Visits to the UK 12.8 11.3 Fares to UK carriers 3.5 3.2 Spending by domestic tourists Trips of 1+ nights 26.1 26.1 Day trips 32.7 33.4 Rent for second ownership 0.91 0.92 Total expenditure in the UK 75.1 74.0 (Source from website < http://www.visitbritain.com/corporate/factsfigures/index.aspx) Contribution of Travel and Tourism to the UK Economy The following information provides an overview of the volume and value of the UK's tourism industry. Spending by Overseas residents billion Visits to the UK 11.9 Fares to UK carriers 3.2 Spending by Domestic residents billion Trips of 1+ nights 26.5 Day Trips* 31.8 Rent for Second Ownership 0.94 *Estimate (Source from website < http://www.visitbritain.com/corporate/factsfigures/index.aspx) According to the World Travel and Tourism Council, WTTC, the demand forecast for "Encompassing all components of Travel & Tourism consumption, investment, government spending and exports the industry is expected to generate GBP184.9 billion (US$353.4 billion) of economic activity growing (nominal terms) to GBP321.9 billion (US$488.4 billion) by 2015. Travel & Tourism Demand is expected to grow by 5.1 per cent in 2005 and by 3.3 per cent per annum, in real terms, between 2006 and 2015. 2004 growth was reported at 4.0 per cent." Travel & Tourism's contribution to the UK economy is illustrated by the direct industry impact of 4.0 per cent of total GDP and the combined direct and indirect impact of the Travel & Tourism economy expected to total 10.1 per cent in 2005. (Source: Travel Daily News 11 May 2005) Conclusion The travel and tourism industry may have had its vicissitudes but has shown great resilience in its ability to bounce back. This can be definitely attributed to man's curiosity to travel from the bygone ages. This can certainly be the reason that this industry has continued to grow stronger after every setback. For the UK economy, it represents a vital component of the GDP and a significant source of employment, both directly and indirectly, because of the spill over into other industries - one in every ten jobs is related to Travel & Tourism. The UK is a very popular destination, but definitely not without competition from other destinations as well. With the globalization of the world, and newer destinations becoming accessible and joining the myriad options already available, it is imperative that the UK keeps renewing itself and evolving newer strategies to keep its tourism industry robustly growing. Sources Key Tourism facts Visit Britain.com Retrieved 30 Jan 2006 from Website http://www.visitbritain.com/corporate/factsfigures/index.aspx Barnard, Robert Budget, Breaks and Business- The three drivers of UK tourism in 2004 17 Aug 2005 Retrieved 30 Jan 2006 from Website http://www.pkf.co.uk/web/PKF800.nsf/pagesbyID/IDDF926479AACAD7FC8025706000465A6COpenDocument Travel & Tourism poised for steady Growth in 2005 Wednesday, May 11, 2005 World Travel & Tourism Council United Kingdom Travel news Daily.com Retrieved 30 Jan 2006 from Website http://127.0.0.1:4664/cacheevent_id=46554&schema_id=2&q=wttc+uk+tourism&s=6Tjww9bM6H3TrGATTaG6cUdaEsw International Tourism Travel and Tourism 24 Nov 2005 Retrieved 30 Jan 2006 from Website http://www.statistics.gov.uk/cci/nugget.aspid=178 Travel Trends 2004 National Statistics Retrieved 30 Jan 2006 from Website www.statistic.gov.uk/downloads/theme_transport/traveltrends2004.pdf Read More