Travel trade association UKinbound has launched a fresh call to save inbound tourism through the creation of a ‘Tourism Export Recovery Fund’ to help businesses wholly reliant on international visitors survive until the return of the market in Spring 2022 and support the UK’s economic recovery. This could cover destination management companies (DMC) reliant on business event tourism.
Since the start of the Covid-19 crisis, inbound tourism businesses that rely on international visitors, particularly intermediaries such as tour operators and DMCs, have seen revenues fall by at least 90%. As a result of the current overly cautious restrictions on international travel which have caused a collapse in international visitors to the UK, these businesses are facing a second year with no business and no revenue.
Previously profitable and sustainable, tour operators and DMCs (who as intermediaries bring in over 50% of the £28.4bn export earnings from inbound tourism) have been one of the hardest hit by the pandemic as they are reliant on international visitors for business and have been excluded from crucial support schemes as they fail to recognise different business models that do not have an obvious shop window or high street presence.
With 2022 shining a global spotlight on the UK as it hosts and celebrates the Commonwealth Games in Birmingham, Festival UK 2022 and the Queen’s Platinum Jubilee, UKinbound is calling for further, targeted support to ensure that the vast economic, cultural and societal benefits of these events can be realised by ensuring a thriving inbound tourism industry is in place.
With a recovery for inbound tourism not projected until 2025, according to Oxford Economics, UKinbound has submitted a proposal to Treasury for a Tourism Export Recovery Fund which would allow tour operators and DMCs to apply for a capped grant award based on their 2019 revenue levels. This investment, totalling £47m for the UK’s circa 230 tour operators and DMCs, would enable these businesses that are at the heart of the UK’s tourism supply chain to survive until inbound tourism can safely resume at sustainable levels and return to profitability in 2022.
The Tourism Export Recovery Fund will:
- Allow the sector to rebuild and reconnect with inbound markets
- Retain tens of thousands of jobs across the country, reducing dependency on Government support
- Provide valuable export earnings
- Retain a key driver of the UK’s economic recovery
- Retain a key mechanism for supporting the Government’s levelling up agenda
- Maintain the UK’s global competitiveness both as a destination and as an open and growing economy
- Retain valuable skills, knowledge and individual relationships that are not easily replaced.
Alongside this, the Association is also calling for an extension to the Coronavirus Job Retention Scheme until April 2022. With 77% of tour operator and DMC staff still on furlough, and with no incoming business for the foreseeable future, the removal of the scheme from 1 October will have devastating consequences for the sector.
Joss Croft, CEO, UKinbound, said the UK economy is losing £78m a day in exports due to a “total collapse” in international visitors.
“Our borders have effectively been closed since March 2020, with previously profitable and sustainable businesses seeing their revenue drop by over 90% since 2019. These businesses have also been forgotten by the Treasury and left out of existing Government support schemes,” he said.
“It is essential that Government provides targeted support to the UK’s 230 inbound tour operators and DMCs to ensure their survival until the return of the market, so that UK tourism can make its vital contribution to our national economic recovery and maintain its position as a desirable and globally competitive destination.
“2022 presents a fantastic opportunity for the UK to showcase its world-class welcome, but the country will not be able to fully reap the benefits without a successful inbound tourism sector in place to convert pent-up demand and interest into bookings and funnel business and revenue to all corners of the country and through multiple sectors.”
