Discuss the effect of tourism on the United Kingdom’s economy.

The United Kingdom is a developed country full of fantastic attractions, including beautiful landscapes and World Heritage Sites. It also bears its own unique characteristics in its history and culture. It is meaningful and worthwhile for everyone to pay a visit to its museums and historical buildings. “Visitor Economy Facts” (2013) proves that visiting heritage attractions is a very popular activity both for the international tourists and the UK locals. It quotes the top five attractions in terms of visitors admissions in 2012 based on the figures from the Association of Leading Visitor Attractions are: British Museum, Tate Modern, National Gallery, Natural History Museum and V&A (South Kensington). It shows that heritage and cultural attractions is the charm of the UK and it attracts a huge number of tourists to come. According to “Tourism in the United Kingdom” (2014), the UK is the world’s eighth biggest tourist destination with 29.2 million visitors in 2011. ￡28 billion were spent in the UK by the foreign tourists. “Why Tourism Matters” (2013) also states that since 2010, tourism is the fastest growing sector in the U.K. It is the fifth largest industries and it represents one of the most dynamic economic sectors which determine the growth of the UK’s economy. It generates ￡127 billion to the country’s GDP in each year. However, UK tourism gives both the positive and negative effects to the economy economically and environmentally such as increasing the business opportunities and GDP; while at the same time it damages the environment and is boosting up the product prices.

Tourism provides employment opportunities in the UK. Sica (2007) says that it creates the job opportunities in hotels, restaurants, entertainment and transportation. It offers job vacancies to workers, especially for the unskilled and semi-skilled workers for the servicing sector. Data given by “Why Tourism Matters” (2013) also echoes this fact that it mentions that tourism supports 3 million jobs, which represents 9.6% of all jobs, and over 300,000 small and medium sized enterprises. Thus, tourism provides significant support to the British employment market.

Tourism generates the Government revenue through taxes. The two most prominent taxes generated by tourism in the UK are Airport Taxes and Value Added Taxes (VAT). “Economy of the UK”(2014) puts forward that there are ￡1,028 billion of Airport Taxes in 2013. Moreover, VAT is the third largest source of Government revenue in the UK. The room charges for the hotels or Bed & Breakfast (B&B) include the payment of VAT. When the tourists go for shopping, they also need to pay VAT, which occupies 20% of the cost of the products. Taxes on tourism help to generate UK revenue.

Foreign exchange earnings is also a positive effect of UK tourism. Foreign exchange includes both the profits made from selling good and service in a global marketplace, and the gains obtained from the currency that is simply exchanged. Businesses in the UK make large amounts of profit from foreign exchange earnings. British Sterling has a big exchange rate in the world. When tourists exchange their currencies into pounds, the companies or banks in the UK can also gain profits from the spread of the exchange rate. A great demand of British Sterling from tourism signifies that the UK’s economy is booming.

Tourism gives raise to the multiplier effect that generates greater GDP. “Why Tourism Matters” (2013) asserts that Deloitte estimates the tourism multiplier to be 2.2 meaning that for every ￡1,000 generated in tourism, it may expect a further ￡1,200 to be secured elsewhere in the economy through the supply chain. Thus, money spent by the tourists will be spent by the recipients to generate more income for the UK. It is a far reaching effect and tourism helps in the UK’s economy growth.

Tourism prompts infrastructure improvement. “How Economics Affects Tourism” (2013) expresses that UK government tends to make the country more attractive by making investments on infrastructure and utilities such as building better roads and better drainage system. Local population can also benefit from it as they use the same government services designed for tourists.

Tourism prompts the conservation of cultural heritage. “National Parks” (2014) points out that the reasons to conserve cultural heritage is either due to increasing the British’s awareness and pride, or basing on the economic grounds to keep the heritage as a tourist attraction. In fact, UK government’s protection to cultural heritage is to serve the dual purposes of helping in the country’s GDP growth and preserving the memory for the British. “Britain Tourism Strategy” (2013) asserts that to protect the cultural heritage is a Britain tourism strategy to enhance the UK’s image and to build on the positive perceptions to attract tourism.

However, UK tourism also contributes the negative effects to the economy. Tourism causes seasonal unemployment. Sica (2007) states that tourism is a seasonal industry because the number of visitors is strongly affected by the climate and holidays. Tourists seek warm and mild temperatures with little rain as an ideal weather for travelling. The peak season for tourism is during summer holidays, especially in August. Thus, the demand for the seasonal workers tends to have its peaks and low periods. Pomoni (2010) says that this seasonal pattern is also affected by a cyclical demand pattern, which changes regularly based on how many seasonal workers are required by the employers during holiday seasons. When it is at the low season, the employment will be terminated, which makes the job insecure. Workers cannot have a stable job and they need to wait for another peak season to get a new job. Job instability affects the workers financially. The environmental destruction is also a negative effect to the UK. According to Mozer (2014), tourists usually drive their cars into the parks that will destroy the environment. Moreover, when they come to visit the landfill side, they are interested to set a fire for barbeque and they will in return produce some litter that will damage the environment and impact the wildlife. Mozer (2014) suggests that to resolve this problem, government should educate the visitors to behave as a responsible tourist by promoting through leaflets, information centers, guided walks, events, signs and websites. These education campaigns will cause the government spending a lot of money on it.

Apart from the environmental impact, UK government also has to handle the logistical issues that are caused by the sudden inflow of tourists such as raise of crimes, traffic congestion, accidents and lack of parking spaces.

Tourism increases local prices because tourists are often willing to pay extra for goods and services, some time that are beyond what the locals can afford. Moreover, tourism determines an increase in demand of goods and services, which causes the price of goods and services to go up sharply. In return, local people in the UK will have to suffer of having their purchasing power deteriorated by the high price. As you are all aware, in the big cities of the UK, like London and Manchester, people living there are having a very high living standard.

Tourism provides business opportunities, yet it creates inconvenience to the local people. For example, in some rural cities where tourists usually pay visit, shops are prone to produce more entertainment goods to cater for the tourists’ needs than the basic goods required by the locals. Local people who need the basic goods such as milk, bread and butter find that the shops keeping these products only at a low stock level. Moreover, restaurants also tend to change the style of their cuisines in order to fit for the tastes of the overseas tourists. This makes the local people difficult to adjust to the foreign styles and feeling inconvenient.

Tourism will lead to a high demand of shops and hotels. It is beneficial to the developing countries, but it is not as advantageous as that for the UK, which is a fully developed country. For example, London, a tourists’ principal visiting destination, is already a densely populated city with a lot of shopping centers and hotels. Although the number of tourists is still increasing sharply, it will get saturation one day. In this way, it will give raise to the black market when there are not enough hotels and goods and services for the tourists.

To conclude, the positive benefits of tourism in UK prevail over the negative effects and it contributes to the economic growth. It not only improves the living standard of the unskilled and semi-unskilled workers, but also encourages UK government to invest on infrastructure and utilities, which benefit the local population. Tourism helps to generate high revenue for the UK economy. Tourism is a driving force to reach the economic development in the UK.

Bibliography

Britain Tourism Strategy. (2013). Retrieved March 25, 2014, from the VisitBritain website: http://www.visitbritain.org.tourism_2012_legacy/britain_tourism_strategy/ Sica, E. (2007). Does Tourism Affect Economic Growth? The Experience of Southeast Asian and Pacific Countries. Retrieved March 25, 2014, from http://www.academia.edu/786838/Does_Tourism_Affect_Economic_Growth_The_Experience_of_Southeast_Asian_and_Pacific_Countries Economy of the United Kingdom. (2014). Retrieved March 25, 2014, from the Wikipedia website: http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom

How Economics Affects Tourism. (2013). Retrieved March 25, 2014, from eHow website: http://www.ehow.com/info_7772892_economics-affects-tourism.html

National Parks. (2014). Retrieved March 25, 2014, from http://www.nationalparks.gov.uk/learningabout/ourchallenges/tourism/impactsoftourism

Pomoni, C. (2010). The Benefits and Drawbacks of Working a Seasonal Job. Retrieved March 25, 2014, from http://voices.yahoo.com/the-benefits-drawbacks-working-seasonal-job-7382170.html Mozer, D. (2014). Tourism Development: Outline of Advantages and Disadvantages.
Retrieved March 25, 2014, from http://www.ibike.org/encouragement/travel/tourism.htm

Tourism in the United Kingdom. (2014). Retrieved March 25, 2014, from the Wikipedia website: http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom

Visitor Economy Facts. (2013). Retrieved March 25, 2014, from the VisitBritain website: http://www.visitbritain.org/insightsandstatistics/visitoreconomyfacts/ Why Tourism Matters. (2013). Retrieved March 25, 2014, from the VisitBritain website: http://www.visitbritain.org/britaintourismindustry/introbritainstourism/tourismmatters/