The World Travel & Tourism Council (WTTC) has issued a stark warning to the UK Government: the UK’s successful travel and tourism industry faces stagnation and long-term decline. On the eve of the UK Government’s first Visitor Economy Advisory Council, the global tourism body revealed data that shows £60 billion is at risk over the next 10 years, in lost tourism business.
While forecasts indicate short-term stability, the long-term outlook is weak as the UK loses ground to European competitors, WTTC said.
The UK’s travel and tourism sector directly employs almost the same number of people as the NHS2. It contributed £280 billion to the UK economy in 2024 (10.3 percent) and supported over 4.1 million jobs (11.3 percent). It also contributes around £100 billion annually to the treasury in tax revenues, yet successive governments have shown little interest in travel and tourism, it said.
The opportunity for growth is considerable. Global travel and tourism is expected to grow 3.7 percent annually over the next 10 years, compared to 2.4 percent for the wider global economy.
However, in the UK, the future looks troubling. Over the next five years, the UK is expected to have one of the lowest growth rates in overnight international arrivals. It is set to lag other European tourism powerhouses, such as Spain, Germany, and Italy, which place travel and tourism at the heart of government decision-making, it said.
WTTC has identified several key areas that urgently require government action to unlock the sector’s full potential:
* UK Travel & Tourism businesses are already impacted by the recent increase in National Insurance, and higher than European average VAT rates. With the increases in Air Passenger Duty (APD) and the introduction of an ETA, a visa waiver which could rise from £10 to £16 per visitor, the UK is pricing travellers out of the UK, toward other destinations
* As the organisation charged with promoting tourism in the UK, VisitBritain is seriously under-funded when compared to its competitors around the world, which in many cases receive double the government investment. Additional investment is crucial to continue attracting visitors, and ensure the economic benefits extend beyond London
* Global travelers are choosing other European destinations, attracted by the tax-free shopping removed in 2021, which could generate an estimated £3 billion to UK Plc.
* The Treasury has mooted a central “hotel tax” that will further deter travelers, could cost jobs, and cause major hotel investors to look elsewhere
Without targeted reforms, these barriers will continue to stifle competitiveness and deter high-value travelers from choosing the UK, WTTC said.
Julia Simpson, WTTC President & CEO said “The UK is at a critical juncture. The Government is looking for growth and its Travel & Tourism sector offers just that. As one of the country’s largest employers alongside the NHS, contributing £280BN to the UK economy last year, the sector has been misunderstood and poorly treated by successive governments.
“The Government cannot tax its way out of debt, it needs to invest to grow. UK taxes are higher than many of its competitors – VAT, no tax-free shopping, employers National Insurance, APD, and now a potential new hotel tax, making the UK expensive to operate in and expensive to visit.
“Tourism promotion in the UK is chronically under-invested and it is arrogant to think tourists will always come to the UK. I applaud the initiative by the new Minister for Media, Tourism, & Creative Industries, Rt Hon Sir Chris Bryant MP, to get leaders round the table at the Visitor Economy Advisory Council to tackle this and ensure Travel & Tourism can continue to be a major engine to economic growth.
“The new government has a unique opportunity to change the trajectory of Travel & Tourism in the UK. Despite the industry’s resilience, years of government inertia are taking their toll. We welcome the new government’s commitment to surpassing 50 million visitors by 2030, but this can only be achieved with the right policies in place.”
Price Competitiveness: A Global Low
The UK ranks a shocking 113th out of 119 countries for price competitiveness, according to the World Economic Forum’s 2024 Travel & Tourism Development Index. Key issues include high VAT, lack of VAT-free shopping, rising aviation taxes, and costly visa requirements – challenges further compounded by relatively low government investment in marketing and regional tourism.
UK: Losing Ground to Competitors
The UK’s over-reliance on US visitors compounds this issue. As the largest inbound market in 2019 and 2023, US visitors account for a significant share of spending.
However, this dependence leaves the industry vulnerable to economic and policy changes in one market. Expanding source markets is essential for resilience and sustained growth, WTTC said.
“Policymakers must act decisively. The choices made today will determine whether the UK thrives as a global tourism leader or becomes an also-ran in the face of growing international competition,” it said.
