Tourists' £12.9bn benefit for all London boroughs
Tourism positively impacts every single borough, not just the traditional attractions, deliver huge benefits to businesses outside the core attractions of the West End, says Caroline Artis, London Senior Partner at EY.
Tourism is vital to London’s economy, not only in attracting international visitors to the city but also in job growth and creation. The sector provides opportunities for Londoners at every stage of their career from entry level jobs to senior management positions. But continued growth is never a given.
Against a backdrop of Brexit and concerns about overtourism in other top destinations, it’s more important than ever to champion the economic benefits of the sector but also to make a robust case for responsible and strategic management as tourist numbers continue to grow.
In May, EY undertook an economic analysis on behalf of London First to create a unique, borough-by-borough visualisation of the spending and travel trends of London’s international visitors: Tourist Information: Mapping the local value of international visitors.
Using aggregated and anonymous data from Mastercard and Airbnb, we aimed to show how data can be harnessed to maximise economic opportunities for the whole of London – by intelligently informing borough and city-wide decisions about where to focus efforts and resources in the future. For instance, about the targeting of tourism promotion or planning and licensing decisions.
And the results?
The report maps, for the first time, the contribution of overseas tourists in Gross Value Added (GVA) and jobs to all 33 of London’s boroughs. The data shows clearly the positive impact of tourism on neighbourhoods, local businesses and borough high streets.
EY has estimated that international visitors contributed £12.9bn in GVA to the London economy in 2017, equivalent to 3% of the London economy overall, supporting 309,000 full-time equivalent jobs, around 8% of total London employment.
More importantly, tourism positively impacts every single borough, not just around the traditional attractions. Tourists already deliver huge benefits to businesses outside the core attractions of the West End: around £3bn of GVA in 2017, supporting 70,000 jobs. That’s more than international tourists contributed to Wales and Scotland combined in the same year.
The report further identifies a ‘halo’ of 19 boroughs encircling central London, which attract 70% of Airbnb visits and nearly half of hotel beds. But only 23% of visitor spend is on accommodation. There’s a clear opportunity for local businesses in these neighbourhoods to make more spending ‘stick’ locally, by encouraging visitors to explore nearby food, shopping and cultural experiences.
In fact, if tourism in these areas grows by just 10%, it would generate an additional £268m to the London economy, creating more 6,000 new jobs.
To achieve that, tourism businesses, promotional agencies and local boroughs need better insights on the motivations and interests of visitors from key markets, and they need evidence of the likely economic impacts of things like food, cultural or sporting events.
Spreading growing numbers more evenly across the city as a whole will also ensure a more comfortable and enjoyable experience for everyone, boosting the likelihood of repeat visits.
Whichever way you look at it, tourism is a big revenue driver for London and the wider UK. And it’s the best kind of spending, supporting entry-level jobs with good career progression in the hospitality sector, as well as innovative small businesses on the high street and in creative and cultural quarters.
But this is a global industry where London is constantly grappling to hold onto the top spot. Only smart investment in data and insight will keep our visitor numbers growing.
Caroline Artis is London Senior Partner at EY
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