IN THIS week's print edition we looked at a new report which suggested that Britain’s tourist industry could help boost its regional economies.
New research published on November 21st by Deloitte, a consultancy, has raised hopes that tourism can help Britain’s regions reduce their reliance on other industries. It predicts that the sector will grow by 3.8% a year between now and 2025—much faster than manufacturing, retail or construction. Tourism, it says, has been Britain’s fastest-growing employment sector since 2010. Unusually, northern England, Wales, and rural Scotland—areas which otherwise struggle to attract new businesses—have recently seen particularly strong job growth.
The report also stresses the importance of tourism to the wider British economy. Deloitte estimates that the tourism industry, and its supply chain, already produces 9% of Britain’s GDP. And it forecasts that this will steadily grow to 10% of output over the next decade or so. Between 2010 and 2012 alone, one-third of new jobs created in the British economy were generated by the tourism industry, around 150,000 in total.
However, the report forecasts that the balance between Britons and foreigners using Britain's visitor facilities will change over time. Spending by foreign visitors, the report forecasts, will grow by over 6% a year, with spending by Britons holidaying at home rising by only about 3%, in comparison.
Saying which parts of Britain will benefit most—and lose out most—from this change is a difficult question. London will surely benefit; 53% of spending by foreign visitors already takes place there. However, what will happen in Britain’s other regions will be much less predictable.
Some dramatic shifts in the geography of Britain’s tourism economy are already underway. Nationally, the outlook for the industry is healthy. Spending by foreign visitors in Britain reached record levels in July, according to the Office for National Statistics and the number of jobs in the sector is still increasing. In contrast to the widening gap between the prospering south and the depressed north in the rest of the economy, the tourism industry north of the River Trent and west of the River Severn appears to be booming. However, according to data produced by Deloitte showing where jobs were gained and lost in the tourism sector between 2010 and 2012, many parts of the south-west, East Anglia, and East Anglia lost over 5% of their tourism-related employment in this period (see maps).
But the average hides several areas that did much worse than this. Just north of London, Harlow and St Albans in Hertfordshire lost 51% and 40% of their tourism-related jobs. More worryingly, places where tourism accounts for the high percentage of total employment also did badly. Cornwall, where tourism provides 7% of jobs, lost 17%, and the Isles of Scilly, where it accounts for 15%, lost a whopping 43%.
In contrast, the number of tourism-related jobs rose strongly in London (boosted by the 2012 Olympics games) and in Wales, rural Scotland and northern England. Even in grimy Stockton-on-Tees, the number of jobs went up by 103%, and in rather unpicturesque Barking and Dagenham in London by 95%.
In part, this rather strange pattern—London and “outer” Britain doing particularly well—is due to the economy as a whole doing well. Holiday makers in the south-west and East Anglia—the areas that have done worst in terms of employment—tend to be the places Britons from the south-east tend to go on holiday to. As British consumer confidence has returned over the last few years, it seems that they are rediscovering a taste for short-haul travel abroad again. Foreign tourists appear to have been unable to make up the shortfall from Britons going to places with better weather—visitors from abroad tending to be more attracted to places like London, Edinburgh and the quaint scenery of Wales and Scotland instead.
But it remains to be seen whether places like Cornwall can attract foreign tourists, over the horizon of Deloitte's report, to replace the Britons who now holiday elsewhere. Although it may be too soon to judge whether the benefits of Britain’s booming tourism industry can be spread equally throughout its regions, looking at the most recent trends, this seems exceedingly unlikely.