THE TOURISM SECTOR
9. Tourism is one of the largest industries in the
UK (the fifth largest in England),[10]
worth £74 billion to the UK economy in 2001, about 4.5% of
the GDP.[11]
It is a major employer in the UK: 2.1 million people have jobs
in the sector, which is 7% of the UK workforce.[12]
Some 10% of all new jobs created are in the tourism industry,
which demonstrates the importance of this growing industry to
the UK economy.[13]
10. Tourism forms a wider context for public policy.
Numerous decisions made within central government have implications
for the tourist industry in some way. Many witnesses from the
industry, dependent on their specialist area, called for an integrated
approach to tourism throughout Whitehall. For example, the Business
Tourist Partnership wanted stronger links with the Department
of Trade and Industry (DTI) and the National Trust called for
coordination with planning and sustainable development within
tourism.[14]
The representative from the London Development Agency (LDA) recognised
this and told the Committee: "We have got to have joinedup
activity with an organisation which is much broader and wider
than the existing tourist board".[15]
11. Tourism is a diffuse industry, consisting of
approximately 127,800 VAT-based enterprises in tourism-related
industries. Of these, 77% are small firms with a turnover of less
than £250,000. The range of businesses involved is immense
and the size of these can vary greatly.[16]
Businesses within the sector are involved with moving, accommodating,
feeding and entertaining visitors in a wide range of ways. Other
businesses, particularly retail shops, also benefit from tourist
spending.
12. Tourism spending comes from UK residents taking
day trips and overnight trips domestically, and visitors travelling
to the UK from overseas. The earnings from UK residents account
for around 80% of the total tourism earnings; this shows the significance
of the domestic market to the industry. Further breakdown of the
spend is shown in the table below:[17]
| Spending by |
£ billion |
| Overseas residents: visits to the UK | 11.3
|
| Overseas residents: fares to UK carriers |
3.2 |
| Domestic tourists: trips of 1+ nights | 26.1
|
| Domestic tourists: day trips | 33.4
|
13. The UK ranks seventh in the overseas tourism earnings league
behind the USA, Spain, France, Italy, China and Germany.[18]
This is down on the position in 2000 when the UK ranked fifth
in terms of receipts, with a 4.1% market share. The world tourism
market is becoming larger and competition stronger. The UK is
losing its market position as competitors offer an increasing
range of attractive products. The UK is seen as a comparatively
high-cost destination by many of those travelling from abroad,
which cannot help competitiveness.[19]
14. There was a balance of payments deficit in the sector of £13.6
billion in 2001 (ie the amount spent by overseas visitors in the
UK was £31.4 billion and the amount spent by UK citizens
overseas was £45 billion). The gap between these figures
has increased on 2000 results and is a cause for concern, within
the industry and across Whitehall. Until 1995 the balance had
been constantly positive except for 1992, the year of the Gulf
War.[20] The industry
needs the support of the Government to consider ways of dealing
with this deficit especially by encouraging more UK citizens to
holiday domestically. In a letter to the Committee, the ETC stress
"that the rapidly mounting tourism deficit requires urgent
attention, and that the litmus test of success in tourism over
the next few years must be reduction, or at least stabilisation,
of that deficit".[21]
10
Ev 4. Tourism would be ranked fifth after: Letting of dwellings
(7.6%); Retail (5.4%); Construction (5.3%); and Wholesale (4.8%).
Source: National Statistics Input-Output Tables (GDP(O)) 2002. Back
11
BTA web site: http://www.visitbritain.com/corporate/links/visitbritain/tips.htm
10/12/02 Back
12
Ibid Back
13
Ev 4 Back
14
Ev 13, Ev 142 Back
15
Q 354 Back
16
BTA web site:http://www.visitbritain.com/corporate/links/visitbritain/tips.htm
10/12/02 Back
17
BTA Market Intelligence Key Tourism Facts on the web site: www.britishtouristauthority.org Back
18
Ibid Back
19
Q 124 Back
20
Ev 3 Back
21
Letter from Mr Britten and Ms Lynch, 13 October 2002 Back
| 
