Visit Britain has released the IPS figures for August. The headline figure is that revenue from overseas visitors to the UK has increased by 10% for the year to date. This means that the inbound sector is on track to generate an additional £2.2bn in export earnings this year, sufficient to generate over 40,000 new jobs. This is significant considering the impact that Brexit is having on the ability of tourism businesses in the UK to attract and retain the staff that they need for provide the level of service required.
Also in line with the econometric modelling, the drop in the exchange rate is having a much greater impact on long haul markets than it is on short haul markets – a 15% fall in the cost of coming to the UK has a much greater impact on a visitor's decision to come to the UK if they are spending £3000 on a trip than if they are spending £300 on a trip. The other main Brexit impact that is coming through from the figures is that while holiday visits are up 17% with visitors taking advantage of the low exchange rate, uncertainty over Brexit has caused business travel to decrease by 1%.
Outbound tourism is still up 5% in revenue terms over the three month summer period. This indicates that the UK has a two-tier economy and that austerity, poor wage growth, increased inflation and an unfavourable exchange rate are not severely impacting the ability of a significant component of the UK population to take overseas holidays.