2018 saw a decline in inbound tourism from the record levels set in 2017. The number of inbound visitors to the UK fell 3% to 37.9 million and the value of spending fell 7% to £22.9 billion; both of these were the second highest ever recorded.
Our revised forecast for the calendar year 2019 is for a return to growth, with visits up 3% to 38.9 million and spending up by 7% to £24.5 billion. If achieved, this growth in visits would be similar to the long-term average seen this century; spend would grow by a higher rate than the long-term average, driven in part by higher growth from some high-spending long-haul markets.
We will review this forecast in December 2019, when we will also issue a forecast for 2020.
At time of writing, official inbound data is available for the first three months of 2019. The number of visits to the UK were up slightly on Q1 2018, although the value of visitor spending was down from 2018’s record.
There are a number of uncertainties to our forecast. Brexit remains a key uncertainty. At time of writing (July 2019) there is little clarity on the settlement and situation for travel post October 31st. The forecast assumes there will be no major disruptions to travel.
VisitBritain’s consumer sentiment research has been conducted biannually since August 2016 with the latest wave at time of writing having taken place in March 2019. This found in the most recent survey a clear increase in uncertainty surrounding travel arrangements to come to the UK; an increase in worries around policies/practicalities; and a slight softening of key metrics of opinion of Britain, intent to visit and interest in visiting. However, there was no change at the overall level in perceptions of welcome and no major consistent change in value for money perceptions in this wave. If the UK enters October without clarity on travel arrangements then we expect to see similar concern in our autumn 2019 wave of sentiment research.
Flight bookings from Europe made through indirect channels were weak in the first several weeks of 2019 (i.e. bookings made in these weeks, for arrival in the UK any time). Since then they have picked up, although the outlook for the year looks like it is lagging behind that of long haul markets, for whom flight bookings have been strong and indicating growth for most of 2019.
Brexit aside, it is assumed there will be no unforeseen major events in 2019 that disrupt overall international tourism or travel to Britain in particular, e.g. terrorism, health scares or natural disasters.
The ongoing value of the pound remains an uncertainty. As of late July, the pound stands at a two-year low; it remains weak by historic standards and is forecast to continue to remain weak throughout the medium term, although the exact path of the exchange rate is a source of uncertainty in the forecast. VisitBritain’s consumer sentiment research has found that while there is still widespread agreement that the weak pound makes it a good time to visit the country, the favourable exchange rate is less top of mind for travellers than it was in 2016.
The global economy, and in particular the economic performance of the UK’s main source markets, are always important drivers of visitor numbers. While the outlook is still for moderate growth in 2019, the global economy has slowed somewhat since its peak in 2017/18. The Eurozone economy experienced a tough second half of 2018 with unexpectedly weak growth. Economic fundamentals remain generally benign for now in the USA, especially the labour market, although growth has slowed recently. The Chinese economy continues to slow gradually, exacerbated by the ongoing trade war with the USA. There are many signs that the “cyclical peak” of global growth is now behind us, with risks to the downside. However, in the short term, economic conditions remain a positive driver of outbound tourism from most markets.
|2018 Actual||2018 Actual growth||2019 Forecast||2019 Forecast growth|
|Visitor spend (£bn)||£22.9bn||-6.6%||£24.5bn||7.0%|