Introduction
The purpose of this paper is to effectively portray the current affairs and trends of the tourism industry in London. In addition, this paper will provide statistical information and graphics on the various effects of London’s tourism on the economy, transportation, accommodation, sustenance and employment. Congruently, the research will provide insight into key demographic markets and emerging trends amongst travelers and residents alike. Lastly, this paper will highlight the varying policies required by immigration authorities in order for international travelers to visit London and the United Kingdom.
According to U.S. News Travel, amongst other reputable publications, London and the UK rank among the top ten most traveled cities and countries in the world consistently (Weiner, 2011, n.p.). Much of the tourism success of London gives credit to the rich history and culture of the city, along with it being a central hub for international travelers worldwide.
International travelers are growing larger annually than ever before with the emergence new economy destinations and less strict travel requirements for internationals travelers (UNWTO Staff, 2013, pp. 11-12). This information shows that the influx of tourists into London will be comprised of varying demographics and psychographics making accessibility and accommodation needs in demand.
London has proven itself capable to hold international events in excess of two million people with the recent hosting of the 2012 Olympic Games (International Olympic Committee Staff, 2012, pp. 1-2). The city itself has seen major changes to its infrastructure and accommodation facilities as a result of the rapid increase in tourism due to large events and international tourists. There are also tentative plans for increasing the number of hotels in London in anticipation for the increase in travelers.
In culmination, London is no stranger to mass tourism year round. Tourism is the direct contributor to economic boosts during tough financial times within European countries. London’s direct contribution tourism economy is worth approximately $27.1 billion USD as of April 2013. Additionally, tourism provides more than 304,000 jobs directly to London workforce (London and Partners Staff, 2013, p. 3). Consequently, tourism is embedded within London’s culture, which makes the city one of the most culturally and ethnically diverse tourism locations in the world.
London’s Tourism Economy
London is the third most visited city in the world as well as one of the most financially successful year round tourism economies (London and Partners Staff, 2013, p. 5). As previously mentioned London’s tourism economy is worth about $27.1 billion and 304,000 in direct industry contribution from visitor spending (expenditure on hotels, attractions, airports, spend with UK air carriers, etc.). The monetary financial impact shows future gains nearly doubling the current value by 2025 with the increase in hotel rooms and accommodations (London and Partners Staff, 2013, p. 42).
When evaluating the tourism economy, including indirect inputs or supply chains providing goods or services to the industry (food/drink suppliers, retailers, ancillary and professional services) the total tourism economy is valued at approximately $61.4 billion including 700,000 jobs. Similar to the potential future increase in monetary value of the direct industry contribution, the value of the tourism economy including indirect inputs expects a 50 percent increase by 2025. However, the jobs contribution shows a decline from 700,000 to 698,000 by 2025 (London and Partners Staff, 2013, p. 42).
Lastly, the absolute total contribution of the tourism economy in London including direct contributions from visitor spending, indirect inputs and induced inputs, or purchases made by people employed within the industry or its supply chains, is estimated at $77.6 billion and more than 852,000 jobs. By 2025, the monetary contribution is set to double with the jobs creation staying steady (London and Partners Staff, 2013, p. 42).
Overall, London’s tourism economy is one of the largest producing and contributing economic sectors of revenue to the city and country. The tourism economy of London represents 11.6 percent of the city’s GDP and exactly 13.6 percent of London’s workforce.
Visitor Statistics
Traveler numbers to London both internationally and domestically have been sustained over the past ten years. London’s visitor economy increased $2.5 billion dollars from 2008 to 2012, a total of 24 percent (London and Partners Staff, 2013, p. 8). With forecast showing even bigger increases in domestic and international travelers, London’s tourism economy is one of the largest in the world.
The main reason international travelers visit London, not including layovers, is for overseas holidays. In fact, travelers on holiday overseas equaled more than $4.5 billion in spending alone in 2012. In addition to other group of visitors such as overseas business travelers and overseas travelers visiting friends and relatives (VFR), the average length of stay and spend per day has risen in lieu of large traveler numbers.
In fact, in 2012 overseas travelers spent on average $1,107 per trip and $181 per day. Overseas travelers spend more than three times the amount of domestic visitors on average. This fact is due to the overseas traveler length of stay equaling 6.1 days compared to the domestic traveler average of 2.3 (London and Partners Staff, 2013, p. 9).
Domestic travelers accounted for a great deal of the tourism economy as well. From January 2013 to June 2013, London had 12.5 million visitors from the UK alone. These visitors accumulated 28.4 million room nights spending $4.9 billion in the process (London and Partners Staff, 2013, p. 20).
VFR was the biggest purpose of travel for domestic travelers. Even though the market was higher, they spent less money daily than international and business travelers. This happened mainly because domestic VFR travelers had other accommodation options.
London also sees a diverse number of travelers of all ages. From 16-65 and older, there was never a lack of travelers in any specific category. Travelers aged 25-44, accounted for one half of all overseas visitors to London. The wide-range of differences in age show the distinction London has in its culture. From appealing to the likes of theater goers to sports fanatics, there is always something for every age.
Tourism Infrastructure
London is at the epicenter of international travel for routes all around the world. In order to accommodate the large amount of transit and business travelers, major infrastructure changes have been undergone within previous years in order to conveniently facilitate mass crowds.
A large driver of London’s tourism economy is its history and culture. London provides attractions of all sorts such as sport and theatre namely. In fact, London has more than 300 theatres, 500 cinemas and over 12,000 restaurants (London Councils Staff, 2014, n.p.). London is a leader in the arts with 857 art galleries and more than 300 musical venues. The city is also deemed the fashion hub of the world. In 2012, London’s fashion week alone generated more than $160 million in orders and exposed more than 2 million viewers from 100 different countries via television (London.UK.Gov staff, 2014, n.p.). As a central travel hub, a bucket list destinations and a prime site for popular cultural trends, London provides what only a few other cities can.
Airports
London is one of the most connected cities in the world. London’s air travel consists of 1,698,894 average daily seats and 9,439 average weekly departures serving 330 non-stop destinations globally (London and Partners Staff, 2013, p. 24). Heathrow is London’s most largely used airport servicing 70 million passengers annually, which represents 52 percent of London’s total. Along with London, Heathrow accounted for 32 percent of all UK air passenger traffic in 2012.
Due to airport expansion constraints, Heathrow has seen recent business begin to have a spillover affect into other airports as a result. The constraints on one end are bad for Heathrow’s business model however; the leakage of travelers to surrounding airports is increasing tourism and visitor spending in those areas. Although visitors will be able to secure flights regardless of location, a trend has been developing where travelers purposefully book through competing airports to avoid the cluster of Heathrow.
The problem comes to fruition when visitors begin booking flights outside of London in the surrounding areas of Birmingham and Manchester. For the transient traveler, that deducts at least a half a day of spending, which increasingly makes an impact on the economy. Solutions are being brought forth including the proposition of building a new airport in East London (Gudmundsson, 2014, n.p.).
London also plays host to multiple other airlines. Gatwick Airport is London’s second largest airport with 34 million passengers annually representing 25 percent of London’s total. Gatwick Airport provides a bigger number of low-cost carriers that bring in a completely different demographic of travelers. Other London airports include London City, Luton and Stansted for a total of five airports.
London’s airports drive an incredibly large amount of transient, business and stayover travelers to the city and its surrounding areas. The airport system in London is a key economic driver and is essential to the continued success of the tourism market in the city.
Hotels
As of 2013, London has precisely 1,218 hotels (10+ rooms) and 117,000 hotel rooms available to travelers. The majority of London’s hotels are economy class (36.9 percent) with upscale hotels following closely behind (23.7 percent). Of these hotels, only four provide more than 1,000 rooms and only 20 properties total hold more than 500 rooms (London and Partners Staff, 2013, p. 29).
London’s traveler expectations are increasingly passing previous numbers year after year. In order to accommodate travelers looking for hotels, plans have been set forth to increase the number of hotels and rooms by 2017. Approximately 21,600 hotel rooms, 182 hotels, are classified in the probable stage of construction. Essentially, these probable hotels have already acquired detailed planning permission. In addition to these probable hotel expansion plans, 20,700 rooms, 190 hotels, are classified as possible by 2017. The possible hotels are still awaiting permission but are likely to receive such (London and Partners Staff, 2013, p. 34).
Hotels have done well in the past to accommodate larger events (Olympics) but are preparing for even large influxes of travelers based on statistics. The 2017 hotel pipeline strategy is one that will undoubtedly serve the in favor of London as it hopes to continually increase the amount of travelers it can accommodate.
Butler Sequence
London’s status as a tourism destination mecca is self-evident. The amount of inbound tourists has been steadily increasing each year and for now shows no signs of stagnation (Visit Britain Staff, 2014, n.p.). The city continues to receive bids for hosting large events and has made preparations to expand the current state of hotels to accommodate future inbound tourists. When examining London’s current state as a tourism destination, it is appropriate that we use the Butler sequence.
The Butler sequence is used to determine the stage in which a destination lies in regards to its life cycle. The two main determining factors are number of visitors and time. There are five distinct stages including exploration, involvement, development, consolidation and stagnation. Through proper management and response tactics, tourism destinations can flourish forever. However, the ability to recognize that a change needs to be made is often done too late.
According to the definitions of the Butler sequence, London falls in the stage of development. The development stage which is “characterized by rapid tourism growth and dramatic changes over a relatively short period of time in all aspects of the tourism sector” (Weaver & Lawton, 2010, p. 273).
London has been seeing tourism growth in all sectors of the industry from air travel to hotels. In response, as mentioned previously, London has planned for the increased number of travelers by increasing the number of hotels. The development stage is an important part of the potential success of the tourism destination. This is when the change from local control to corporate becomes evident. For example, the move from smaller hotels to corporate hotels is a necessity to accommodate larger traveler numbers. For this reason, this stage is epitomized by the attitude of locals towards the changes. They can either adapt or reject the tourism label, which can have adverse effects depending on the route they take.
Another characteristic of this stage is the approach to carrying capacity of the destination. London, being a city on an island, has potential, and plans, to expand. However, this expansion will only be rational while there is land available. This means that once the future development of hotels reaches full capacity, decisions will have to be made on how to suffice tourism numbers without seeing a decline.
London will continue to be in the development stage for many years to come. Eventually the consolidation stage will take effect when the expansion threshold is reached. Once stagnation takes place, the future will be unpredictable unless preparations are made beforehand.
Conclusion
I envision London to reach carrying capacity near 2025. The expansion plans for 2017 predict an overall potential growth of approximately 400 additional hotels producing 40,000 rooms. So far these plans are to anticipate increasing travel numbers. Once this carrying capacity is reached, I feel London will be continuing receiving steady tourism numbers. According to the Mayor of London, there is still expansion potential for more than 500,000 jobs and 250,000 homes in London that will be catalyst in an expanding tourism environment (Mayor of London Staff, 2011, pp. 1-4).
My basis for this claim is London’s position in regards to air travel. Being the central hub for international travel world-wide, the leakage received from stayover visitors as well as holiday and business travelers, will be a significant number of consistent visitors. In addition to air travel, London’s historical significance will no subside even when travel numbers do. These pull factors enable London to consistently receive a steady flow of visitors even during periods of low travel numbers.
It is those unique pull factors that will enable London to remain a large tourism destination for the foreseeable future. Three characteristics of London’s tourism success as it relates to the Butler sequence are accommodation, tourism-derived revenue and rate of growth in visitation. Currently in the development stage, London is seeing these categories flourish. These include mainly large-scale accommodations, large and growing tourism-derived revenue and rapid growth in visitation numbers.
Upon my research and analysis of London’s tourism culture and economy, I have realized how significant tourism dollars can be towards an economy as a whole. Tourism provides London’s culture with hundreds of thousands of jobs, year-round visitors and economic stimulation in the billions. Combining the research and understanding I’ve gained through this tourism development assessment, I have a great belief that London’s tourism status will remain a leader for many years to come.
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