How overseas holidays boost UK economy

Spending by UK travellers before a foreign trip is now higher than it is at their destination, a report on the impact of overseas tourism reveals.

The old argument that holidaying outside the UK is bad for the nation’s prosperity has been cast into doubt by new research examining the economic value of outbound travel.

According to travel association ABTA, the amount spent by residents before they set off on foreign travels reached £45.7 billion in 2017. This is 36% higher than in 2008 and now exceeds the amount spent by UK travellers in the overseas holiday destinations they visit.

The expenditure includes the cost of air travel and insurance services, as well as airport drinks and snacks, holiday clothes and shoes, and lotions and toiletries.

Once tax revenues, the industry’s direct economic impact and employment are taken into account, the report concludes that the outbound travel sector has an “important, and too often underappreciated, role to play within the UK’s tourism mix”.

Jobs creation

The outbound travel sector directly sustains 220,700 full-time equivalent jobs, which ABTA says is higher than the UK’s iron and steel or electrical equipment manufacturing industries. Just as many jobs again are created through the supply chains supporting the industry.

The sector also generated £6.4 billion for the Exchequer in 2017, with the bulk of this coming from indirect taxes such as Air Passenger Duty.

The overall economic contribution to the UK totalled £37.1 billion in Gross Value Added (GVA) in 2017, amounting to around 1.8% of UK GDP and growth of 36% since 2014.

No tourism deficit

ABTA chief executive Mark Tanzer said: “Too often the contribution of the UK outbound travel industry is overlooked in favour of a myth that overseas travel creates a ‘tourism deficit’ with money going overseas which could be spent in the UK.

“The evidence is clear that this is not the case — the benefits of the outbound sector are being felt by the wider economy in terms of jobs, support for other businesses and tax contributions to the Treasury.

“In order to continue to grow and thrive, government needs to make sure the right tax and policy framework is in place.”


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