Tourism set for £6.2bn loss from international travellers this year

The UK tourism sector is facing serious financial losses in 2021. We break down what the research shows and what’s in store for the sector.

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The UK tourism sector could see a £6.2 billion loss in revenue from international travellers in 2021, according to research by Company Debt. But what’s causing the drop in revenue? And what’s in store for the UK tourism industry as a whole? Let’s take a look. 

[top_pitch]

What’s happening with UK tourism?

Unsurprisingly, people around the world have been travelling less during the Covid-19 pandemic. So, we’re seeing fewer international tourists than normal visiting our shores. There are many reasons for this, including UK government restrictions and quarantine requirements, but they all add up to the same thing…fewer visitors. 

To find out more about what’s happening to the UK tourism sector, Company Debt compiled various studies from around the UK. Together, these studies highlight the challenges facing the UK tourism sector. Here are the key findings:  

  • The UK tourism industry saw an 86% drop in economic output between February and December 2020.
  • There’s little chance of international travel recovering in 2021. Instead, we can expect tourism levels to be around 28% of pre-Covid levels for the rest of the year.
  • An estimated 11.3 million people will visit the UK this year. While this looks reassuring, it’s only 2% more than the number of visitors we welcomed in 2020. 
  • All things considered, the industry will lose at least £6.2 billion in 2021.

In better news, more Brits plan to book a staycation this year than in 2020 – numbers are up by 51%. However, this is still just over half the number of Brits who went on staycations back in 2019, so the figure is still low.

With furlough set to end for the travel industry in October, the low numbers are disappointing news for an already struggling sector. 

What does the future hold for tourism in the UK?

It’s hard to say, but here’s what we can take from the evidence available. 

Firstly, once Covid levels stabilise around the world, and vaccine rates increase, the UK government will likely ease its travel restrictions and quarantine requirements. When it becomes easier for international travellers to visit the UK, we should see an increase in tourism from overseas.

Secondly, we could see a further increase in the number of Brits opting for ‘staycations’, rather than travelling abroad. This could help the UK economy, especially in areas seeing fewer international travellers. 

And finally, the UK government’s Tourism Recovery Plan may help to draw more people to the UK and encourage them to stay longer, which could boost the economy. 

Whatever happens, though, we won’t see any significant recovery in the UK tourism industry until 2022 at the very earliest. 

[middle_pitch]

Takeaway

There’s no doubt that 2021 is looking like another disappointing year for the UK travel industry. However, we’re travelling more than we did in 2020, which is encouraging news for the sector. 

If you can afford to go on holiday this year, consider booking a staycation rather than travelling abroad. Not only will you save money, but you’ll be supporting the UK tourism industry, too. 

And even if you don’t fancy going on holiday in 2021, don’t forget that there are plenty of fun things you can do locally, instead. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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