Can the UKs Economy Bounce Back from Tourism Industry Decline?
The UK Economy Relies on Revenues Generated by Millions of Tourists

According to Statista (Number of Overseas Resident Visits to the United Kingdom from 2002-2018) the number of tourists to the United Kingdom has steadily been increasing since 2010 when it was measured at 29.8 million visitors. Tourism numbers peaked in 2017 at 39.2 million visitors, and tapered off slightly to 37.9 million visitors in 2018. Estimates suggest that some 2.6 million jobs are created by the U.K.’s tourism industry, which also adds£106 billion to the economy.

If current projections are correct, the UK tourism sector will be valued at £257 billion by 2025, making up 10% of the country’s GDP. By July 2019, UK tourism statistics reflect that £2.9 billion worth of tourism receipts were generated by overseas travellers. Most of the visitors to the UK from the US, at 3.877 million (2018 figures), with France close in tow.

The current geopolitical climate has effectively hamstrung global tourism as the health and wellness of UK citizens takes centre stage. The downturn in overall economic activity, especially in terms of manufacturing capacity, indicates that 33% of the country’s manufacturers believe that a recovery will only take place over the medium-to-long-term. The vaunted V recovery will likely look more like a slowly rising, oblong U shape. An in-depth survey conducted by Make UK (comprising 200+ companies during the week of May 4-11) has found that a sizeable chunk of manufacturing enterprises believe it will take at least 1 year for conditions to normalise. The impact of the pandemic has resulted in a sharp collapse of demand, with excess capacity no longer being required.

The government-imposed lockdown has resulted in heavy reliance on government loans and bailout plans. While UK government ministers are eager to fast-track the revival of the manufacturing sector, safety concerns have put the brakes on. The UK economic calendar is peppered with figures that are likely to make for more grim reading over the short-term. Major announcements like Inflation Rate (MoM and YoY), Markit/CIPS Manufacturing PMI Flash, Retail Sales (MoM/YoY), Gfk Consumer Confidence, Nationwide Housing Prices (MoM/YoY), and Balance of Trade (APR) are largely forecast downward.

Tourism PPE UK economy
UK Government Eyes 2-Week Quarantine for International Visitors

UK Government Eyes 2-Week Quarantine for International Visitors

Prime Minister Boris Johnson has floated the idea of ‘air passenger quarantine’, requiring all visitors flying into the UK to be self-quarantined for a period of 14 days, with government-imposed fines and spot checks for any breaches of the self-isolation. While some have cheered on this measure, others are less convinced that it will be of any benefit to the UK economy, particularly from countries which have lower per capita COVID-19 rates than the UK. This applies to the majority of other European Union countries.

SAGE (Scientific Advisory Group for Emergencies) was briefed about the self-quarantine plans for tourists to the UK on 7 May 2020, but has yet to issue guidance on the matter. Such is the virulence of the pandemic in the UK that upwards of 10,000COVID-19 cases are being generated daily. SAGE has found that just 0.5/100 cases of COVID-19 are a result of overseas imports. Official data indicates that by the end of April 2020, passenger arrivals to the UK had dropped by 99%. The Guardian reported that the ‘Two-Week Quarantine for Travellers to UK Would ‘Devastate’ The Aviation Industry.’

Tit-for-Tat Approach as Countries Put their Safety & Security First

By the same token, the Europeans aren’t taking any chances either. For example, the Spanish authorities will only allow Britons to visit if UK figures meet expectations. On Wednesday, May 13, 2020, the European Commission stated that, ‘Free Movement and Cross-Border Travel Are Key to Tourism.’ As a result, the EC has been looking to implement a coordinated effort towards reopening the tourism industry, courtesy of a phased-in approach. Provided that UK infection rates are brought under control, the European Commission will study 3 key areas notably the socio economic issues for cross-border travel, containment measures for all aspects of the journey, and analysis of epidemiological elements.

This invariably requires the implementation of various safety and security measures prior to the lifting of restrictions. Pre-emptive planning vis-a-vis increased numbers of hospital beds equipped with all the necessary life-saving equipment, includingPPE, medical staff, and testing capabilities are sacrosanct. It is against this backdrop that the UK tourism industry now findsitself at a crossroads, with many peripheral industries like restaurants, tours, camping sites, hotels, guesthouses, and live shows and performances hanging in the balance. Tourism is key to the UKs prosperity and the sooner the numbers start rising, the faster the UK economy will heal.