Reviving the Visitor Economy: 4 deep challenges facing the tourism sector post-pandemic

This is a summary report from a roundtable held in partnership with Airbnb.

Our visitor economy faces challenging times. Tourism was hit hard by Covid and despite the Government’s more than £37 billion in financial support for tourism, hospitality and leisure sectors, these vital industries are yet to fully bounce back. Worryingly, Oxford Economics predict tourism in the UK will not return to 2019 levels of activity and spending until as late as 2025.

But there are ways to turn things around. For a start, the Government’s levelling up agenda presents a big opportunity. For too long our approach to the visitor economy has been to encourage greater numbers of visitors to a small handful of hotspots. Meanwhile, many communities, particularly across the North of England and Midlands, with historic attractions and beautiful scenery have been overlooked. There’s a real opportunity to grow the tourism sector whilst boosting growth in left behind places. 

Key points of the discussion

1. Economic benefits and challenges in the years ahead.

Attendees noted that around 50% of inbound tourism spending was concentrated within the M25, and were unanimous that more needed to be done to spread the benefits of the visitor economy outside of London. Those present noted that many communities with a great deal of heritage, such as Stoke, could be the tourism hotspots of tomorrow, if more could be done to drive tourism outside of London and the South East. Others noted tourism success stories in the North of England, such as Blackpool and the Lake District. Tourism Minister Nigel Huddleston MP reaffirmed the Government’s aim, made in the Tourism Recovery Plan, to grow visitor spending year-on-year in every nation and region of the UK, and outside of the usual tourist ‘hotspots’.

2. The need for greater information and evidence-based approaches

Attendees argued that while tourism was a great driver of growth in the visitor economy in many communities across the country, in some respects, high levels of tourism had the potential to put local infrastructure under pressure. For example, high numbers of visitors result in extra demand on roads, parking, public toilets, and often litter picking and cleaning services, but each of these services is funded through taxes levied on local residents and businesses, rather than tourists. 

3. Coordinating tourism with other national and local policy challenges

As part of the debate on the merits of a tourism tax, attendees also discussed devolving greater responsibilities for the visitor economy to local communities. Many felt that doing so would help communities to better maximise the benefits of tourism and mitigate potential drawbacks of high levels of visitors. As part of the wider discussion on levying additional taxes on tourism, attendees agreed that any such tax would have to be locally led. A more popular idea that emerged during the discussion was earmarking parts of the revenue raised through existing taxes on the visitor economy, such as VAT, for local communities.

4. The challenges of tourism for local workers

Attendees weighed up the challenges and benefits of the visitor economy for the workforce, including deprivation and weaker social fabric in some coastal communities, such as Blackpool and Hastings. Some attendees pointed out that while there may be some vibrant areas of such towns, thanks to the strength of local tourism, other areas often struggled with severe social problems, particularly around addiction and lack of opportunities for local residents.

John Stevenson MP, Member of Parliament for Carlisle, said:

“I welcome Tourism Minister Nigel Huddleston’s consultation on introducing a Tourist Accommodation Registration Scheme. Such a scheme would allow us to collect the data needed to better identify the areas that are most impacted by high levels of tourism, at a hyper-local level, and better target additional support to these communities.”