With summer fast approaching, European countries are preparing for a busy tourism season with the UNWTO predicting an increase of 3 per cent to 5 per cent in international visitors this year.
The anticipated growth comes following a 5 per cent year-on-year increase in international visitors in 2024 to 747 million to the continent, which was also 1 per cent more than the pre-Covid figure in 2019.
However, this growth will not be applied equally and the full impact of US President Donald Trump’s April tariffs could change everything. Although the UK’s immediate future might be positive, concerns are growing that its long-term fortunes will decline, thanks to a failure of government policy.
The World Travel & Tourism Council (WTTC) warned at the start of the year that without changes in policy, the UK’s travel and tourism industry, which generated £280 billion via 4.1 million jobs in 2024, faces stagnation and long-term decline that could cost the country £60 billion over the next decade.
WTTC president and CEO Julia Simpson said the UK is expected to have one of the lowest growth rates in international visitor numbers of the next five years which will leave it lagging far behind European competitors including Spain, Germany and Italy.
And she urged the UK government to act on a number of issues if it is to reverse this trend and hit its target of 50 million international visitors in 2030.
Priced out
Simpson also accused the UK government of pricing travellers out of the market thanks to a combination of increased staffing costs following the recent increase in National Insurance, higher VAT rates on items like accommodation than are found in Europe and increases to Air Passenger Duty.
She added these costs have been compounded by the introduction of the visa waiver ETA scheme for all European visitors other than the Irish at the start of April 2025 costing £10, with the price increased by 60 per cent just one week later.
The resulting costs means the World Economic Forum ranked the UK 113th out of 119 countries for price competitiveness in its 2024 Travel & Tourism Development Index.
Simpson argued the body charged with promoting tourism to the world, VisitBritain, is “seriously under-funded” compared to those in rival countries which receive up to double the funding
And the criticism has proved prescient - at the beginning of the April the UK government slashed funding for VisitBritain’s GREAT Britain and Northern Ireland programme which promotes the country in some of its key markets from £18.08 million for 2024-25 to £10.57 million for 2025-26.
A spokesperson for VisitBritain noted tourism remained strong in the UK with 43.4 million visitors predicted for 2025, up 5 per cent on the 41.2 million in 2024 with spend for 2025 predicted to be £33.7 billion, a 7 per cent increase on the previous year.
Simpson noted the decision to remove tax-free shopping in 2021 for foreign tourists could cost the country £3 billion a year, as she called on the cancellation of a mooted hotel tax which could deter both travellers and hotel investors.
VisitBritain refused to comment on government policy. However, the spokesperson agreed that shopping is a vital activity for visitors to the country, with 55 per cent indulging in retail therapy.
She added the UK’s shops and boutiques are particularly important in attracting high-spending visitors from China and the Gulf while the overall contribution of inbound visitors going shopping is £18 billion annually, with more spent on the wider economy, including accommodation, attraction and restaurants.
Noting that tourism is the UK’s third largest service export and a major part of British trade, the spokesperson added: “Tourism is a competitive global industry, and visitors have a lot of choice. Britain is seen as an expensive destination, and we know perceptions on value for money are a top driver for international travellers.”
Simpson stressed: “The UK is at a critical juncture. The government cannot tax its way out of debt, it needs to invest to grow.”
“UK taxes are higher than many of its competitors – VAT, no tax-free shopping, employers National Insurance, APD, and now a potential new hotel tax, making the UK expensive to operate in and expensive to visit. Tourism promotion in the UK is chronically underinvested and it is arrogant to think tourists will always come to the UK.”
She added: “The new government has a unique opportunity to change the trajectory of travel and tourism in the UK. Despite the industry’s resilience, years of government inertia are taking their toll. We welcome the new government’s commitment to surpassing 50 million visitors by 2030, but this can only be achieved with the right policies in place.”
She also warned against an overreliance on the US market which has been the UK’s biggest market from 2019 to 2023 and could yet feel the impact of Trump’s trade war.
Pivotal moment
Richard Toomer, executive director at the Tourism Alliance which represents the UK tourism industry, agreed the government was at a pivotal moment.
While he welcomed the ambition to attract 50 million visitors in, he added the government needs to help create the conditions to achieve it.
Toomer said: “Other countries have ministries for tourism and they recognise the importance of the industry and you do get the impression that it’s not the case here.
“It does mean the relevant importance of tourism is diminished despite the fact that we’re a significant part of the economy.”
He blamed the government’s failure to assign a specialised tourism minister for a lack of joined up thinking while various ministries having independent responsibilities for measures from visas to taxation condenses the problem.
Toomer said: “With the way that tourism policy is split across government we have seen some really bizarre and counter-productive decisions that hamper our ability to achieve that [50 million visitor target].”
He agreed that the addition of various taxes was in particular pricing the UK out of the market while the decision to ban tax-free shopping has been detrimental.
Toomer said: “It would have placed us at a huge competitive advantage as the only short-haul destination to the European market [offering the discount] but we’ve done the opposite and removed it not just for them but for everyone and that is having a huge impact.”
While he admitted that nothing can be done about the UK’s famously unreliable weather, clever marketing can dissipate that.
He added: “Because of the weather, what we really want to do is to try and encourage more tourists in the off season with shoulder visits. That’s a really good way of trying to grow inbound tourism.”