This debate pack has been prepared ahead of the Westminster Hall debate on the potential effect of the UK leaving the EU on UK tourism, initiated by Nigel Huddleston MP, to be held on 12 October 2016 at 4:30pm.Jump to full report >>
Debate packs are produced by the Commons Library quickly after the announcement of parliamentary business. They are inteded to provide a summary or overview of the issue being debate and identify relevant briefings and useful documents, including press and parliamentary materials. More detailed briefings can be prepared for Members on request to the Library.
Since the EU referendum in June 2016, there has been scant official data showing how UK tourism has been affected by the decision to leave the EU. What data has been published is presented below, with a brief discussion of the impact of the fall in value of Sterling since June.
In July 2016 (the first full month after the referendum) there were
3.1 million foreign visitors to the UK, up from 3.0 million in July 2015 (using seasonally adjusted data).
This 1% increase in foreign visitors is notable because it follows three successive months of declining foreign visitor numbers compared with the same months in 2015.
This data suggests that the UK became more attractive to foreign visitors in the period immediately after the referendum, perhaps as a result of the increased coverage that the UK received in foreign media, and because of the fall in the value of the pound which reduced the cost of visiting the UK.
Domestic tourism (holidays by UK residents to elsewhere in the UK; or ‘staycations’ as they are sometimes called) is an important part of the tourism industry. In 2015, there were 124 million overnight visits by British residents to elsewhere in Great Britain.
Data on overnight domestic tourism is not available for the post-referendum period. However, some data on domestic day trips is available. In the three months to August 2016 (so including the immediate pre-referendum period as well) there were 494 million domestic day trips, up 11% on the same period in 2015.
Exchange rates are important in the tourism industry. A weaker pound is effectively a price cut for foreign visitors to the UK – their money is worth more in the UK than it was previously. Conversely, for UK residents going abroad, a weaker pound means that the value of their money falls and their foreign holidays become more expensive.
The value of the pound declined sharply against the dollar and the euro following the referendum (Europe and America are the UK’s biggest overseas tourism markets).
The value of the pound has remained subdued in the months since then and in early October it was around 12% down against the dollar and the euro compared with the mid-June level.
Commons Debate packs CDP-2016-0169
Authors: Matthew Ward; Chris Rhodes