How Britain lost its tourists

Telegraph

13-05-2025

Globally, tourism is on the up. According to the World Travel and Tourism Council (WTTC), international visitor spending is forecast to reach an historic £1.57 trillion in 2025, surpassing 2019's previous high by £123 billion.
The WTTC also reported that people visiting the UK spent £40.3bn in 2024, down 5.3 per cent on 2019. The global tourism body noted that the UK is already 'one of the most expensive destinations in Europe' and the recently introduced Electronic Travel Authorisation (ETA), lack of VAT-free shopping, growing business taxes, increasing Air Passenger Duty, and cuts of more than 40 per cent to VisitBritain's budget will all hamper growth in 2025.
These measures, it claimed, were 'deliberate policy choices' that create 'barriers to travel'.
Julia Simpson, WTTC President and CEO – and a former adviser to Sir Tony Blair when he was prime minister – said: 'Other European countries see the economic value of travel and tourism but in the UK, it's taken for granted. Now the Government is actively damaging growth.
'The government is risking… stagnation and long-term decline, without targeted action and investment. Globally, travellers are spending more than ever before, while other countries are benefitting.'
Given the Government's declared commitment to growth, it seems strange that such a valuable sector – before the pandemic, the UK Travel & Tourism sector's contribution to GDP was 9.9 per cent – is being actively shrunk.
Is part of the problem the lack of a tourism minister? The current holder of the second-tier ministerial post with responsibility for tourism is Chris Bryant MP, whose full title is 'Minister of State for Data Protection and Telecoms and Minister of State (Minister for Creative Industries, Arts and Tourism)'. On his official home page, 'tourism' is at the bottom of a long list, beneath 'cultural diplomacy and soft power'. He also oversees space stations and rockets.
'Hospitality businesses are being treated as ATMs for the Treasury'
The UK hospitality industry experienced a turbulent final quarter of 2024, with an average of more than eight venues shutting their doors every day. The Hospitality Market Monitor, which tracks data from Britain's licensed hospitality sector, warns of a net loss of nearly 3,000 venues over the course of 2025 if the trend continues.
Hoteliers, already facing higher costs and wages, say the Government gives the impression it has no grip on the tourism industry.
'It's still extraordinary to me that a sector of the economy that contributes 10 per cent to GDP is so woefully understood and represented by successive governments,' says Tom Ross, CEO of The Pig chain of hotels. 'Wider political decisions are taken with seemingly little regard for their impact on hospitality, [where] businesses are being treated as ATMs for the Treasury.
'The country requires the Government to show entrepreneurial spirit and agility – as demonstrated by businesses up and down the country every day. As a country we must seize the opportunity to throw our arms wide open and encourage tourists – a warm welcome is quite natural to people in hospitality but apparently less so to those in Whitehall.
'I weep to hear that the marketing budget of Visit Britain has been slashed. In business you cannot cut your way to growth, you must find ways to grow the business to survive. By this measure, the Government is asking the hospitality economy to find ways to grow by increasing National Minimum Wage and National Insurance costs; we have to be innovative or fold under this financial pressure – it is about time the Government demonstrated their ability to do the same. Stimulate demand by affirmative actions, rather than suppressing it with punitive layers of policy.'
'Staggering' visa and tax hikes
The Tourism Alliance represents some 70 major organisations, including ABTA, Airports UK, the Bed & Breakfast Association and the Association of Leading Visitor Attractions (ALVA) – which itself has 52 members. Richard Toomer, the organisation's executive director, sees a contradiction at the heart of official policy.
'The Government is talking a good game on economic growth in general, and tourism growth in particular, but time after time we have seen policies which are hampering that growth. The imposition of the new ETA for non-visa nationals was a new cost and barrier to travel, and was bad enough, but to hike the fee 60 per cent just as European travellers were needing to apply for it, was staggering.
'We've also seen visa and Air Passenger Duty costs go up and up. And of course the additional taxes and pressures on businesses following last year's Budget have hit our sector, which is so people-dependent, especially hard.'
At the end of 2024, Bryant announced a commitment to increasing international visitors from the current 41 million to 50 million by 2030. A keynote speech highlighted the importance of creating a skilled workforce, smoother logistics at airports and on railways, and drawing foreign visitors away from London. He said a Visitor Economy Advisory Council would oversee planning and strategy.
'We are hopeful that the Government's new tourism growth strategy will undertake to tackle all of these barriers and costs so that their growth targets can be achieved,' says Toomer. 'We also want to see specific mechanisms to ensure cross-Government coordination, otherwise we are concerned that the disconnect between the visitor economy and other parts of Whitehall – especially the Home Office – will continue.'
Retail therapy
In September 2020, Rishi Sunak axed tax-free shopping, claiming it was 'costly' and 'did not benefit the whole of Britain equally'. Effectively an admission that tourists only go shopping in the capital, the decision incensed retailers.
'Our latest data revealed that the absence of tax-free shopping cost the West End £640 million in unrealised sales in 2024 – a notable increase from £400 million in 2023 – with many international visitors choosing to shop in Europe instead, where they can still benefit from the policy,' says Dee Corsi, chief Executive of the New West End Company, which represents more than 600 businesses.
'In what is an increasingly uncertain global marketplace, and at a time when the Government is having to tighten purse strings elsewhere, reinstating tax-free shopping represents a rare opportunity to give British businesses a competitive edge.
'We urge the Government to take bold action by delivering a robust and fully funded tourism strategy, putting tax-free shopping at its centre. Failing to do so will result in long-term economic repercussions for British business, and run contrary to the Government's mission to go further and faster on growth.'
Bryant's boss, Lisa Nandy, the culture, media and sport secretary, recently said the Government 'could explore' restoring VAT-free shopping. She added, however, 'at the moment, that's not something we're proposing to do.'
Industry leaders are concerned that the lack of urgency – combined with macro-economic challenges and the unignorable geopolitical turmoil – could lead to a downturn and, potentially, a full-blown crisis in the sector.
'The UK is starting to lose its competitive global position'
Quangos can be hesitant about turning on their paymasters. Nonetheless, VisitBritain's CEO Patricia Yates states the bare facts of the matter thus: 'VisitBritain has been informed by the UK Government that its budget to promote Britain globally to international visitors has been cut by 41 per cent with immediate effect, from about £18 million to £10.5 million for the next year.
'This will mean pulling our just-launched ' Starring GREAT Britain' screen tourism campaign from some of our largest and most valuable inbound visitor markets, affecting our ability to compete for visitors, their spending and to drive regional growth.
'This comes at a time when our forecasts are showing that the UK is starting to lose its competitive position internationally as a visitor destination, both globally and against our major western European rivals. If tourism to the UK was growing at the same pace as forecasts are currently indicating for western Europe, our analysis shows that the industry would be worth an additional £4.4 billion per year to the economy by 2030.'
Since the Seventies, British holidaymakers have been able to choose between Rhyl and Torremolinos, Margate and Malta. Yates suggests the Government needs to bear in mind that everyone else has the same freedom to choose.
'Tourism is an extremely competitive global industry; visitors have a lot of choice, we face fierce competition especially from our European neighbours and we are seen as an expensive destination. Like every export industry, to be able to compete we need to be telling our story about why people should come to Britain not one day, but today.'
National cuts have direct local impacts, as VisitBritain spends part of its budget pushing less obvious corners of the country. As tourism has become more sophisticated, foreign visitors are as likely to visit Birmingham as Bath.
Andrew Lovett, chair of the West Midlands Tourism & Hospitality Advisory Board, said: 'Tourism is an integral and valuable component of the West Midlands economy. Thousands of small-to-medium sized businesses create good, accessible jobs for local people and offer rich cultural options for our communities to enjoy.
'Whilst we continue to enjoy a successful partnership with the Government, demonstrated by our Destination Development Partnership pilot, I am especially concerned – on behalf of visitor economy businesses across the West Midlands – of the impact that these substantial cuts to our national tourism organisations will have. These are not without consequence.'
Julia Simpson agrees: 'The loss of regional support is particularly concerning. Without dedicated marketing and investment, regions outside London will struggle even more to attract international tourists, despite their huge untapped potential.'
The WTTC study, produced in collaboration with consultancy Oxford Economics, also found that – in spite of all the headwinds – travel and tourism contributed £286 billion to the UK's economy in 2024, up 3.9 per cent from 2019. So, while the international spend is declining, the overall economy relies on tourism and hospitality more than ever before.
The organisation calls on the UK Government to reverse cuts to VisitBritain, restore tax-free shopping for international visitors, rethink 'punitive' travel taxes and 'invest in keeping the UK globally competitive'.