The World Travel & Tourism Council issued a stark warning to the UK Government: the UK’s successful Travel & 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 £60BN1 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.

The UK’s Travel & Tourism sector directly employs almost the same number of people as the NHS2. It contributed £280BN to the UK economy in 2024 (10.3%) and supported over 4.1MN jobs (11.3%)3. It also contributes c.£100BN annually to the Treasury in tax revenues, yet successive governments have shown little interest in Travel & Tourism.  
 
The opportunity for growth is considerable. Global Travel & Tourism is expected to grow 3.7% annually over the next 10 years, compared to 2.4% for the wider global economy4. 
 
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 & Tourism at the heart of government decision-making. 
 
 

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 travellers are choosing other European destinations, attracted by the tax-free shopping removed in 2021, which could generate an estimated £3BN5 to UK Plc
• The Treasury has mooted a central “hotel tax” that will further deter travellers, 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 travellers from choosing the UK.

Travel & Tourism is not just a cornerstone of the UK economy – it’s a vital driver of tax revenue, job creation, and regional development. Yet systemic challenges threaten to undermine its potential and erode the country’s global tourism leadership.

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 overreliance 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.

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.

Source: Oxford Economics 
 
According to Oxford Economics latest estimates, France is the most visited country in the world with almost 100MN visitors per year, whilst the UK had just under 42MN.