US boost for UK tourism
Tourism, specifically international tourism, has long been a significant contributor to UK GDP. With a rich cultural heritage, a collection of diverse and vibrant cities and countless areas of outstanding national beauty, the UK continues to attract visitors from around the world.
Although yet to recover to pre-pandemic levels, the numbers visiting remain robust and have rebounded strongly. Based on 2022 data, the value of the travel and tourism sector rose to an estimated £237 billion - it also supported 3.6 million jobs.
VisitBritain forecast 39.5 million visits and a £34.1 billion spend, down 4% on 2019 levels, when inflation is take into account. The forecast singled out the US as the largest single source of visitors and it anticipates the generous American tourist will spend £6.7 billion during their time in the country.
Whilst many of these visits are made be families enjoying a well earned holiday, many will be taken for business reasons. London in particular remains a leading global hub for international business with hundreds of multinationals maintaining a presence in the city.
Foreign Direct Investment (FDI)
The VisitBritain forecast supports Irwin Mitchell’s own research into international destinations for business investment published only a few months ago which can be read here: Irwin Mitchell’s Foreign Direct Investment Index.
This analysis demonstrated how attractive the UK remains for overseas investors, despite the challenges posed by Covid and other political developments in recent years. It also identified the US as the biggest source of FDI in 2021, which was valued at £676bn or 34% of the UK’s total inbound FDI. This comprised financial services as well as professional, scientific and technical services but extends into retail, leisure and hospitality as well.
Many UK highstreets are well supported by US brands and of course many of the most popular food and drinks outlets have their origins in the US. A notable success story is Wingstop. Founded in 1994 in Texas, it now has over 30 restaurants in the UK operated by master franchise holder Lemon Pepper Holdings Ltd, with more in the pipeline.
It’s no surprise that the US provides such as significant source of tourism or business investment. The two countries are bound by shared histories, similar cultures and lifestyles, as well as a common language. There is also a well-developed international network of advisers, financial institutions, insurers, trade associations, embassies and legal advisers facilitating trade both ways across the Atlantic.
Although the VisitBritain forecast is subject to revision later in the year, whatever the final numbers are they are will likely point to the fact that people still want to come to the UK, for business or pleasure. However, cost of living challenges are not exclusive to the UK and consumer confidence isn’t as strong as it was before the pandemic, but the UK remains open for business – and holidays.
Georgie Collins, Partner and Head of Irwin Mitchell’s US Desk, commented, “It is encouraging to read the details in the VisitBritain report. I’m regularly in the US meeting clients and contacts and their perception of the UK as a place to visit, do business and invest remains strong and positive. Given the special and strong transatlantic relationship between the USA and UK, I don’t see that changing in the near future. Most businesses take a long term view when it comes to their international expansion plans, which transcend the changes in economic outlook and politics”
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