Travel rivals financial services in importance, claims WTTC

Travel rivals financial services in importance, claims WTTC

The government is being urged to 'sit up and take notice' of the financial importance of the travel and tourism industry in the UK.

The call came as new research from the World Travel & Tourism Council shows that the sector is nearly five times the size of automotive manufacturing and supports almost as many jobs as the financial sector.

Travel and tourism’s total contribution to GDP in the UK was £101 billion last year, or 6.7% of total GDP. This compares to 2.3% for automotive manufacturing, 1.9% for mining and 4.1% for chemicals.

With 2.3 million direct, indirect and induced sustained jobs in the UK, the industry directly supports nearly as many jobs as the financial service sector in the UK.

The research by Oxford Economics also shows that travel and tourism’s contribution to GDP is growing faster than most other sectors in the UK. It will grow by 4.1% over the next ten years, a faster growth rate than the total economy and all other industries presented in this study.

It also highlights that travel and tourism is a significant source of exports for revenue for the UK. Visitor exports in 2011 totalled £25 billion, which was 13.2% of all service exports and 5.1% of all exports including goods and services.

But the WTTC warned that Air Passenger Duty and high rates of VAT are costing the UK economy.

President and chief executive David Scowsill said: “These numbers are extremely significant. For over 20 years, the World Travel & Tourism Council has spearheaded global and regional analysis of the economic impact of travel and tourism.

“WTTC has now taken this research one step further and assessed the role travel and tourism plays in the economy of the UK in comparison to other economic sectors and also how this looks like on a regional level.

“The results are extraordinary. Within our industry we have always known that travel and tourism is a vast contributor to economic growth and job creation. These figures bear out just how significant our industry is for the UK.”

He added: “2012 is an important year for the UK’s tourism industry. The Golden Jubilee and Olympics are a prime opportunity to showcase the country’s tourism product and capacity to host major events.

“However, government support after 2012 will be equally important to ensure that the industry can build on the legacy of these events, and continue to create jobs and growth around the UK.

“Air Passenger Duty and high rates of VAT on hotel stays are making tourism in the UK uncompetitive, and costing the economy jobs and GDP.  Now is the time for the government to sit up and take notice of the industry and its potential.”

Bill Glenn, president global corporate payments and business travel for American Express, which sponsored the study, said: "With each release of regional data from the latest WTTC research, we continue to see the value that travel can bring to GDP, job creation and other economic factors.”

The study compared the effect of travel and tourism spending on GDP and the wider economy.

Every £640,000 ($1 million) of travel and tourism spending:
•       Generates £830,000 ($1.3 million) in GDP which is roughly the same impact as the financial services and communications sector
•       Generates £76,000 ($119,000) of gross value added in the real estate sector and the wholesale and retail sector gains £86,000 ($135,000)
•       Supports 18 jobs, compared to 13 jobs in the financial sector, 12 jobs in the communications sector and 11 jobs in automotive manufacturing.

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