Brexit Briefing on tourism
Introduction
The tourism economy in London is estimated to be worth £36billion,[1] and supports 700,000 jobs across the capital – equivalent to one in every eight jobs. In 2015 more than 30m UK and international tourists visited London, spending £15bn.[2] Tourism is a particularly important economic opportunity for London because it drives strong growth in relatively accessible jobs.
The UK’s decision to leave the EU poses several risks to tourism in London. For example, the possibility of reduced access for EU visitors, a short fall in both skilled and unskilled workers ( jobs currently filled by EU workers) and less business travel to London should companies put investment decisions on hold.[3] However, in the short term the weaker pound has made London a more affordable destination for international and domestic visitors.
London and Partners Tourism Strategy
London & Partners, the official promotional company for London has plans for tourism in the City, which are set out in its 2014-17 Strategy document, published under the previous Mayoralty. The document makes the distinction between leisure tourism and business tourism – which includes business events and conferences.
The focus for leisure tourism focuses on increasing the reach of London & Partners’ digital activities through the ‘Always on’ campaign, continuing its outreach work in foreign countries via bloggers and social media celebrities and providing information to travel trade operators to ensure they have an understanding of London’s tourism offer.
London & Partners’ priorities for business tourism are to continue running the convention bureau, which provides advice to convention organisers and events professionals; to secure major sporting events; and to attract more cultural and consumer events[4].
London & Partners’ Business Plan expands on these priorities, its sets an objective to attract leisure tourists who contribute £120 million in additional GVA to London’s economy and supports 2,117 additional jobs in London.[5] The business plan also states that London & Partners needs to make difficult choices about which markets to focus on. Visitors from the US and Europe accounted for 78 per cent of London’s leisure visitors in 2014 and London & Partners will focus the majority of its resources on these high volume, high value markets – in particular, the US, France and Germany.[6] However, visits to the UK from China, the world’s largest outbound market, increased by 46 per cent, with spending up 18 per cent.[7]
I have personally argued for more activity to attract tourism ( and inward investment and joint ventures) from India and Israel, the latter focussing on London’s extensive Jewish heritage places of interest.
The Mayor has stated that the new Chair of London & Partners will be reviewing their business plan to ensure that London’s competitive position is maintained post-Brexit. They plan to publish a specific strategy for leisure and business tourism in 2016/17.[8]
The effect of Brexit on tourism in London
In the medium and longer term, the UK’s exit from the EU poses a number of challenges to tourism in London, as agreements and regulations that facilitate travel between the UK and the rest of the EU are renegotiated.
For example, there is a risk that the cost of travel will increase without the EU negotiated Open Skies Agreement.[9]
Furthermore, much of the demand for workers in the tourism industry has been met from the EU; foreign employees in the sector increased from 19 per cent in 2004 to 28 per cent in 2014.[10]
Business tourism may also be affected: as 72 per cent of the 8.3m business visitors who come to the UK are from other EU countries, if businesses put investment decisions on hold or relocate their headquarters it could well lead to a decline in business tourism.
In the short term, weaker Sterling has made London an attractive destination for tourists. Since the decision to leave the EU, the Pound has fallen to its lowest level against the Dollar in 30 years and continues to decline against the Euro. This has led to a boost in tourism. July was a record month for inbound visits from EU tourists, with 2.3m visits, 3 per cent up on 2015, and overseas visitors spent £2.5bn – 4 per cent more than last year.[11]
[1] London & Partners 2016-17 Business Plan
[2] London welcomes over 30 million tourists for the first time ever, accessed 18 October
[3] Impact of EU Referendum on UK tourism Industry, accessed 18 October
[4] London & Partners Strategy 2014 – 2017
[5] London & Partners 2016-17 Business Plan
[6] ibid
[7] Tourism booms in UK after post-referendum fall in pound, The Guardian, 11 October 2016 [accessed 18 October]
[8] DD1364 London Tourism Strategy, June 2015
[9] ibid
[10] ibid
[11] Tourism booms in UK after post-referendum fall in pound, The Guardian, 11 October 2016 [accessed 18 October]
