Travel and tourism set to outgrow UK economy

Economic growth in travel and tourism is forecast to outstrip the wider economy, making the UK increasingly reliant on the sector, research out today shows.

The industry will grow by 1.3% in 2012 – more than double the rate of growth in the wider economy, predicted to be 0.6% by the International Monetary Fund.

This rate of growth means that the industry is expected to directly contribute £35.6 billion and almost 950,000 jobs to the British economy.

Travel and tourism is expected to contribute more than £100 billion to the economy and generate 2.3 million jobs – or 1 in 13 of all jobs in the UK when the wider economic impacts of the industry are taken into account.

Around 30 million people will visit the UK this year, buoyed by the Queen’s Diamond Jubilee and a cheap pound as the country maintains its position as one of the top 10 most-visited nations, according to the report by the World Travel & Tourism Council.

The UK industry grew by 4.1% last year – or five times the rate of the economy as a whole. According to the Office of National Statistics, the UK economy grew by 0.7% in 2011.

WTTC president and chief executive David Scowsill said: “At a time of significant economic hardship, the travel and tourism industry is helping to beat the recession by generating jobs and growth at a faster rate than the wider UK economy.

“2012 is likely to be bolstered by the cheap pound, the continued trend for domestic holidays, and the extra Bank Holiday weekend for the Golden Jubilee. The London Olympics are unlikely to have any significant effect.”

The UK predictions show a marked difference to the European Union as a whole.

A tightening of consumer spending, uncertainty around the future of the eurozone and peripheral economies of Greece, Spain, Italy and Portugal and the impact of austerity measures kicking-in will result in a contraction of the industry of 0.3%, the WTTC predicts.

The organisation’s annual Economic Impact Report also shows that the global travel and tourism industry is set for a milestone year as the industry’s direct contribution to the global economy is expected to pass $2 trillion in GDP and 100 million jobs.

The report forecasts that the global industry will grow by 2.8% this year marginally faster than the global rate of economic growth, predicted to be 2.5%.

This rate of growth means that travel and tourism is expected to directly contribute $2 trillion to the global economy and sustain some 100.3 million jobs.

When the wider economic impacts of the industry are taken into account, the sector is forecast to contribute some $6.5 trillion to the global economy and generate 260 million jobs – or 1 in 12 of all jobs on the planet.

Travel and tourism’s total economic contribution, taking account of its direct, indirect and induced impacts, was $6.3 trillion in GDP, 255 million jobs, $743 billion in investment and $1.2 trillion in exports in 2011.

This represented 9% of GDP, 1 in 12 jobs, 5% of investment and 5% of exports, the WTTC said.

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