Government Action Needed to Boost Vital £32bn Visitor Economy

Strong industry-government partnerships are key to ensuring the UK's visitor economy continues to thrive, according to a new report by the British Chambers of Commerce (BCC) in partnership with IHG Hotels & Resorts. To help grow the tourism, hospitality, events and attractions industries, the report makes a series of recommendations to policymakers. It calls on government to:

• Reform apprenticeship funding in England to support more training opportunities by firms in the visitor economy
• Reform business rates by reducing the multiplier for both small and standard rates
• Reconsider the evidence around tax free shopping for visitors and the benefits it could have on local economies
• Prioritise road connectivity to ports and rail terminals to help boost the visitor economy

The report says that the visitor economy is critical to driving growth and job creation in the UK economy. In 2023, 38 million overseas visitors travelled to the UK, spending £31.1bn and that figure is forecast to increase to £32.5bn this year. The Covid pandemic and the UK’s exit from the European Union reduced the pool of available workers especially in seasonal roles that are crucial to the visitor economy. The report says that addressing workforce shortages in the sector are ‘imperative for its recovery and growth’.

The report urges caution around the introduction of visitor levies and tourist taxes, warning that they risk being an ‘economic disincentive for the tourism industry’. It also calls on the government to reconsider the decision to scrap tax-free shopping for overseas visitors in 2020, adding that the consequence of not re-introducing a similar scheme ‘could lead to further damage to our international competitiveness as a global visitor destination.’

Statements

Alex Veitch, director of Policy at the British Chambers of Commerce said: “Brexit and the Covid pandemic dealt a severe blow to the UK’s visitor economy. While recovery has been promising, major challenges still persist. Our report outlines urgent steps the Government must take to boost visitor numbers and drive economic growth. If tax-free shopping for tourists isn't reinstated, we risk losing ground to other countries, with visitors choosing to spend their money elsewhere. Workforce shortages, particularly in hospitality, can only be addressed with a strong skills strategy and an immigration system that truly supports businesses. The UK has a proud tradition of welcoming the world. For our tourism sector to flourish in this post-pandemic, post-Brexit landscape, decisive action from the Government is essential.”

Yasmin Diamond, executive vice president, Global Corporate Affairs at IHG Hotels & Resorts, said: “Hospitality and tourism play a key role in the everyday economy, supporting millions of jobs and operating at the heart of communities across the nation. It is a real growth industry, which generates billions worth of exports, attracts capital to the UK and acts as a huge contributor to national GDP. To support the visitor economy so it thrives, and helps drive wider economic growth and job creation, it’s vital that the UK is an attractive investment environment to start and grow a business, and a great place for people to live, work and visit. This, in turn, is driven by strong partnerships between industry and government, working together towards shared aims of growth, opportunity and prosperity and these recommendations from the British Chambers of Commerce would be a positive step forward to achieving that goal.”