Tourism: At the Forefront of the UK’s Economic Recovery

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I was reading a report by the Tourism Alliance at the weekend (what a thrilling life I lead!) it actually made some very interesting points. The tourism industry in the last three years has grown by 11% or in real terms bring in an additional eight billion pounds (£8.000.000.000) into the UK economy. We have have seen very similiar trends with the amount of travel money people are changing, primarily into Euros but also in all the popular tourist destinations, Euros, US Dollars, Turkish Lira, Swiss Franc as well as the Australian and New Zealand Dollar and the South African Rand. The Tourism Alliance figures show that the average visitor to the UK is brnging about £638 with them whereas we are seeing the typical holiday budget of nearly £800.

This represents quite a large tourism deficit but without us spending that money in mainland Europe their economies would be even worse than they are now. The Euro exchange rate today has fallen back a little from the heights of last week to about €1.37 to the Pound for the tourist exchange rate and about €1.39 for international transfers but even at this level european destinations represent very good value for money.

I can see the augument that every holiday taken abroad is money not going into British workers pockets but just taking Air Passenger Duty, as an example, paid £3.0Bn into the exchequer in 2014 which would have had to be raised in some other way otherwise.

The Tourism industry is one of the reasons that the UK is doing so much better than a lot of the rest of the EU. Tourism has created 300,000 new jobs since 2010 and as we all know youth unemployment is a real problem everywhere. The Tourism industry has nearly 40% of all its employees under 30 compared to the UK as a whole which only has 19% of employees under that age. (Labour Force Survey, Office for National Statistics, 2012) and every year more than 20,000 new tourism related businesses are started (Business Demography, Office for National Statistics, 2012).

I have been thinking about this a lot in the last couple of days and I think for the last 20 years banking was the industry of choice for the young, highly motivated graduate but that has changed post 2010 and now it is the tourism industry. This growth as an industry has meant that now tourism represents 10% of the entire UK work force and it is contruting to the relative strength of the Pound, the strong economic performance of UK PLC in general and particularly in comparison to the lacklustre eurozone. The end result is that that we are still getting some of the best currency exchange rates when we do go abroad.

Posted by Peter Rudin-Burgess

Peter Rudin-Burgess

Peter is one of the founding partners for both Compare Holiday Money and Currency Buy Back. He regularly blogs on financial matters and writes content for a number of blogs in the travel industry.

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