Record overseas travel and tourism creating "false sense of security"

22 September 2017 by
Record overseas travel and tourism creating "false sense of security"

The record number of overseas tourists to the UK this summer could be creating a "false sense of security" among UK hospitality and leisure operators.

That's the warning from accountancy firm KPMG, which made the comments as it emerged that there had been a 6% increase in overseas tourists in July, as compared with the same period a year before, according to Office of National Statistics figures.

The value of the pound has fallen since the EU referendum last year, enabling hoteliers and other leisure operators to reap the benefits, with overseas spend also increasing by 3% since the previous year.

Nonetheless, the British Hospitality Association's (BHA) Travel Monitor found that there had been a slowdown in growth from the 13% increase in total passenger numbers seen in the first four months of 2017.

There was continued, albeit slower, growth in inbound passenger numbers from North America, up 9% in July. Meanwhile, short-haul travel from Europe in July recovered after a weak couple of months, up 4%.

However, business passengers coming to the UK continued to decline, falling by 1.7% compared with the previous year and 2.6% in the year to date.

KPMG head of leisure Will Hawkley said: "As I outlined this year, there is concern that this boost in overseas spending may be creating a false sense of security throughout the UK leisure sector, as home-grown UK customers remain cautious about their own spend. Creeping inflation and a fall in real earnings means that UK consumers have tightened their purse strings and focussed their spending on the essentials rather than the ‘nice to have'.

"Additionally, UK nationals who have holidayed abroad may be suffering from ‘bill shock' on their return after spending more than they expected to, due to the weak pound, this could again lead to decreased leisure spend at home."

He added that it would be interesting to see how leisure sector sales fare in the colder months when overseas tourism dips. "Leisure proprietors should focus on cost efficiency and increasing spend per head to prevent any nasty surprises. With Christmas fast approaching this is a great opportunity for pubs and restaurants to maximise home grown sales through effective marketing to attract seasonal spenders," he said.

Ufi Ibrahim, chief executive of the BHA said: "While it is positive to see the continued growth in inbound visitor numbers, overall our members are still facing difficult trading conditions compared to the earlier part of this year. The latest BHA Travel Monitor shows that inbound travel from Europe in July was up 4%, and that growth in visitors from North America has slowed, demonstrating that relying on currency fluctuations is not a proper tourism strategy. With business travel remaining weak, the government must ensure the UK remains open for business."

"Elsewhere, data from Kantar TNS shows that, in England, domestic day visits decreased in volume by 11% in the three months to July 2017. We are disadvantaged by some of the highest tourism taxes in Europe and this, along with the recent tragic terror attacks, has discouraged daytrips to England's top attractions and sites of interest."

UK hotel performance to slow down in 2018 >>

BHA welcomes report highlighting deprived seaside communities >>

Inbound visitor numbers bounced back in June >>

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