The travel and tourism industry serves three main markets: domestic tourism by UK residents within the UK; outbound tourism by UK residents travelling abroad; and inbound tourism by overseas residents travelling to the UK. In 2004, total expenditure on UK travel and tourism was GBP 70.08bn, a rise of 4.8% on 2003. In 2004, a total of 239.8 million visits and 1.35 billion overnight stays were made. Between 2000 and 2004, the best-performing sector in terms of visitor expenditure, number of visits and bed nights was outbound tourism. Over the same period, the domestic market was the worst performer of the three.
The domestic travel and tourism market has experienced some difficulties since 2000. Rail disruptions, petrol blockades and foot-and-mouth disease have inhibited UK residents' visits to other parts of the country. In addition, the increasing availability of low-cost air travel has made outbound travel opportunities much more attractive.
Within the inbound market, visitor numbers from the US, which is the most important source market, are still well below 2000 levels. However, strong increases in the number of tourists arriving from other important source markets, such as Spain and the Republic of Ireland, have helped to sustain the sector. The outbound market has developed steadily since 2000, with growth being fuelled by the increase in low-cost air travel. Although this development has benefited the airline industry, its impact has been damaging for other transport providers, including the ferry operators, and the Eurotunnel and Eurostar services. These providers have found it increasingly difficult to compete with inexpensive flights.
Trends within the industry that are affecting the overall market include the increasing tendency for holidaymakers and travellers to arrange their own trips and vacations, as well as the ongoing rise in the popularity and use of low-cost air travel. The trend for consumers to book their flights and accommodation over the Internet has also made many of the tasks previously undertaken by travel agents and tour operators redundant.
Overshadowing the travel and tourism industry's performance in 2005 are the terrorist attacks in London in July, which are expected to have an impact on the domestic and inbound markets. In addition, the terrorist attacks in Turkey and Egypt could impact on the outbound market.
The UK travel and tourism market is forecast to show further expansion to 2009, with the outbound market again expected to show the most growth. There is significant potential in the inbound market, however, with visits and spending from developing markets in Eastern Europe, China and South-East Asia expected to rise. Looking even further ahead, the decision by the International Olympic Committee (IOC) to hold the 2012 Olympic Games in London is expected to benefit every part of the UK, with each region likely to receive additional leisure and business visitors in the years before, during and after the Games.
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