15 May 2009

Bleak picture for UK inbound tourism - UPDATED

The UK’s inbound tourism industry faces a "very real challenge" industry as international travel suffers from the impact of the global economic downturn, VisitBritain warned.

The national tourism agency was responding to new provisional figures from the International Passenger Survey, which monitors international tourism to the UK, which showed a 13% slump in visitor arrivals in the first quarter of the year.

"The figures demonstrate the scale of the task facing the industry and that people won't just travel to Britain because sterling is weak," VisitBritain said.

The figures show that in the first three months of 2009, overseas residents made 6.3 million visits to the UK and spent just over £3.1 billion.

But before adjusting for inflation, there is no change in spending compared to January-March 2008, while the number of visits was down. Sterling was on average 29% weaker against the US dollar and 16% weaker against the euro in March 2009 compared to March 2008, according to VisitBritain.

Rising unemployment in the US and the eurozone contributed to lower consumer confidence which has clearly influenced leisure and business travel.

Visits in the first three months from 15 EU countries were down by seven per cent compared to the same period of 2008.

Arrivals from other regions showed even less resilience to the current economic climate with visits from all world regions falling.

Travellers from North America were down 21%, and from non-EU countries in Europe down 29%.

A fall of 24% in visits from new member countries of the EUis particularly important as Britain has previously relied on growth from emerging markets in Eastern Europe, as well as China, India and south-east Asia, to offset declines in more mature source markets, the organisation said.

VisitBritain’s new chief executive Sandie Dawe said: "The figures illustrate the continuing challenges of maintaining Britain’s popularity as a destination in the face of the global economic downturn and increasing competition from rival destinations.

"Although these are traditionally lower months for inbound tourism, we know that a weak pound is not sufficient in itself to offset the full impact of the recession on international travel.

"We have already launched multi-million pound campaigns throughout Europe and the USA to encourage the world’s travellers to come to Britain right now to take advantage of our current affordability as a destination.

"We are encouraging consumers to explore more of Britain, taking advantage of special offers from hoteliers and carriers and supporting our wealth of attractions, accommodation and destinations. Visitors will enjoy the free museums and galleries that are one of Britain’s major appeals over rival destinations, as well as a summer season of superlative events, contemporary culture, inspiring landscapes and historic attractions.

"With industry partners eager to work with us and ready to match any public investment in marketing activity pound for pound, additional funding would enable us to spread that message even further and generate rapid returns."

	MARCH	3 MONTHS TO MARCH	12 MONTHS TO MARCH
	Visits	% change	Visits	% change	Visits	% change
	(000)	09/08	(000)	09/08	(000)	09/08
North America	240	-25	630	-21	3,660	-17
EU15	1,470	-4	3,870	-7	18,050	-4
A12	270	-17	660	-24	3,110	-5
Rest of Europe	130	-22	340	-29	1,900	-8
Rest of World	230	-11	760	-17	4,270	-7
Total Visits	2,340	-10	6,280	-13	31,010	-7
	Spend	% change	Spend	% change	Spend	% change
	(£m)	09/08	(£m)	09/08	(£m)	09/08
Total Spend	1,175	8	3,130	0	16,365	2

Source: International Passenger Survey, Office for National Statistics

Commenting on the March 2009 ONS Overseas travel and tourism statistics, Tim Helliwell, Barclays Commercial Bank head of hotels, said:"Although today's statistics show a year on year fall of seven per cent in tourist visits to the UK and trading conditions remain tough, the country's hotel industry is far better prepared to ride out this recession compared to twenty years ago.

"Success is polarised between the top end and bottom end of the market with the super deluxe end of the spectrum and the lower budget tourist hotels thriving. London hotels' revenue per available room year on year is downcirca6.5 per cent, while tourist hotels are down onlycirca one per cent year on year.

"However the premium end of the market that appeals to high net worth individuals, who perhaps have not been as severely effected by the economic downturn, has only declined bycirca four per cent.

"Hotels are now better managed and their Hoteliers better trained to implement the strategic and cost cutting measures that will see their businesses survive the downturn."

He added: "The dawn of the digital age and the incorporation of robust internet strategies into most sales and marketing campaigns now mean that rooms can be sold at the click of a finger.

"The industry is no longer reliant on conventional forms of distribution like leaflets and brochures to get its marketing message out, nor does it have to bear the pressure of the associated sales time lag.

"It is also worth mentioning that comparisons between year on year data are difficult with Easter falling in March last year and then in April this year with the consequent impact on the hospitality sector with regards to the fillip in leisure travel at the expense of corporate traffic, due to the shorter working week and opportunity to take an extended break.

"The far greater shift towards leisure travellers with greater occupancy over the weekend rather than during the week remains an industry-wide trend that has become a feature of this recession and this decline in business and corporate traffic has an impact on revenue and profit."

by Phil Davies