February 2015

Trade paper for the domestic tourism and inbound tourism industry in England, Scotland, Wales and Ireland

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NO. 1 FOR DOMESTIC TRAVEL, TOURISM AND BUSINESS NEWS IN ENGLAND, IRELAND, SCOTLAND & WALES NO. 1 FOR DOMESTIC TRAVEL, TOURISM AND BUSINESS NEWS IN ENGLAND, IRELAND, SCOTLAND & WALES February 2015 No. 434 By Samantha Mayling The UK inbound market is set for another record year in 2015, despite the prospect of deflation and Russia's problems, the Tourism Society's Prospects for 2015 event heard. David edwards, VisitBritain's head of tourism research and forecasting, warned the fall in oil prices could lead to deflation – which would affect consumer confidence. "Looking at eurozone consumer confidence, they are a glum lot," he told the event. "But it is not bad news for the UK inbound market, as the UK is still affordable and easy to reach – if europeans are nervy, perhaps that is good for us." Looking at the latest figures and forecasts, he said: "The UK is doing rather well and outperforming traditional competitors." VisitBritain predicts a 2.5% growth in visits, to 35.1 million, generating earnings of £22.2 billion – up by 4.5%. Figures for last year suggest the UK expanded its market share for international tourism, and that 2014 was a record year in volume and value. Carl Castledine, Away Resorts managing director, also – a group of specialist insight businesses from market research firm BDRC Continental – told delegates: "A weak euro is unhelpful for UK hotels but it is likely to have a modest impact on the appeal as a short-break destination. "Any downturn from europe will be mitigated by US and China visitors who will help fill hotel rooms." Air fares are forecast to drop about 5%, and Air Passenger Duty cuts come into effect this May – both of which are "broadly positive" for inbound tourism, but will also be positive for the UK outbound market, edwards added. he noted that London still takes "the lion's share" of inbound visitors but more are staying longer and exploring more of the country. Costin highlighted the emergence of 'Generation Y' travellers, and forecast that by the end of 2015 nearly one in four British hotel guests will be those born in or after 1982. As well as spending more than older guests, they place a greater importance on hotel facilities such as 24/7 food opening, high-speed Wi-Fi, in-room entertainment systems, fine dining, fitness and leisure, and hotel review websites. Exclusive travel trade press sponsor warned about the prospect of deflation, as a "slowdown in spending could accelerate austerity". Castledine predicted a drop in domestic demand during the general election, as was the case in 2010. "There will be a challenge in May, which is already showing a slight softness, so we need discounts and a 'get away from it all' message out there," he suggested. however, factors such as lower petrol prices and the threat of international terrorism could have a positive effect on the domestic market, he told the meeting. Looking at the Bric markets, edwards said Russia faces "headwinds", while China is seeing "stellar growth", thanks to factors such as the UK countryside – but it is still dwarfed by earnings from the US market. exchange rates will show more volatility in 2015, and edwards described the Russian rouble as "the comedy currency of the year". "Russians have to pay twice as much for sterling than two years ago; it will be a real drag on visitor numbers from Russia," edwards said. Matt Costin, managing director of On The Move The Cut Tourism VAT campaign will be lobbying more MPs in the run-up to the general election to highlight the importance of tourism. More than 100 MPs with particular interests in tourism have so far signed up to the campaign, which is calling for a 5% VAT rate. It is supported by 43,000 businesses and 35 major tourism and hotel groups. The issue was debated in Westminster on January 6, HigH street travel agents including Thomas Cook, Thomson, Advantage, Worldchoice, Barrhead Travel, Hays Travel, Bath Travel and Midcounties Cooperative will be participating in a £4 million VisitEngland domestic tourism campaign – starring Shaun the Sheep – to promote 'baa-rilliant' deals around the UK for the summer period. Also on board are operators Superbreak, Hoseasons, Bourne Leisure, Shearings Holidays and Attraction World. VAT campaigners step up lobbying efforts with MPs who support the cause urging the government to approach a possible VAT reduction positively. On the same day, the Culture, Media and Sport Select Committee discussed the state of UK tourism. One expert witness, Professor Adam Blake, said his research demonstrated the strength of a tourism VAT cut compared to other measures such as lowering corporation tax or the general rate of VAT. The Cut Tourism VAT campaign warns the UK industry is facing a "triple whammy" from hefty VAT bills, the falling euro and Air Passenger Duty changes. Cheaper european holidays – caused by currency shifts and cuts to children's APD – would hit UK tourism, which already faces much higher VAT rates than continental competitors. Inbound set to beat headwinds in coming year Wool meet again...

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