Business Environment Profiles - United Kingdom
Published: 26 September 2024
Outbound tourism by UK residents
92013 Thousands of people
0.7 %
This report analyses the total number of outbound tourist trips by UK residents. The data is sourced from the Office for National Statistics (ONS), collated within its "overseas travel and tourism (OTT) time series", and estimates are afforded by IBISWorld. The OTT time series provides seasonally and non-seasonally adjusted estimates of completed international visits to and from the United Kingdom, and was originally based on International Passenger Survey (IPS) data. Developed by the ONS, the IPS produces estimates on the basis of 250,000 interviews conducted over a given year. Interviews are conducted at all major UK airports and seas routes, at Eurostar terminals and on Eurotunnel shuttle trains. In this report, quarterly data is summed to produce tourism figures over financial years (i.e. April through March) and is not adjusted for seasonality.
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The total volume of outbound tourist trips by UK residents is contingent on a number of economic and socio-economic factors, including: the pound sterling exchange rate, whereby a change in the value of the pound against a foreign currency will influence the affordability of making a trip overseas; household disposable income, which again determines the feasibility of making a trip abroad in terms of cost relative to affordability; consumer sentiment, with regards to the stability of personal finances and whether or not a trip abroad is affordable; weather conditions and security concerns, which influence consumer behaviour and drive the propensity to, or not to, go on holiday; business activity and confidence, whereby corporate travel requirements contribute towards outbound tourism; and personal or miscellaneous reasons (e.g. visiting relatives, attendance at overseas sporting events). According to the latest version of the "Travel trends estimate: UK residents' visits abroad" publication, 55.5 million trips abroad by UK residents in 2023 were for "holiday" purposes, followed by "visiting friends or relatives" and "business". In the same publication, the ONS also reports some 21% of visits abroad by UK residents in 2023 were to Spain, making it the most popular overseas destination for UK residents, followed by; France, the United States and the Republic of Ireland.
In June 2016, Brexit caused market uncertainty and political headwinds, which shook up investment markets, and led to a sharp depreciation the pound sterling exchange rate making it more expensive for UK residents to travel abroad. Despite this, 2016-17 saw the total number of outbound tourist trips by UK residents continue to rise. Considering a significant proportion of trips made are booked in advance, holidays and business trips booked prior to the referendum and scheduled after contributed to the growth in overall outbound tourism.
Accordingly, total outbound tourist trips by UK residents increased by 5% year-on-year in 2016-17. While the depleted exchange rate made overseas travel less affordable, and low sentiment across the economy, wage pressure and a slowdown in the job market, all associated with market uncertainties borne out of the UK's withdrawal from the EU bloc, lowered the propensity to spend on holidays and other non-essential overseas travel, the total volume of outbound trips made by UK residents continued on an upwards trajectory in 2017-18 (6.3%) through 2018-19 (4.8%). These increases were driven by factors including, albeit not limited to, a marked uptick in business travel; improved airlinks to emerging market destinations; and UK residents seemingly making a greater volume of trips to Europe, capitalising on free movement.
While trends in outbound travel across the first three quarters of 2019-20 were broadly similar to the preceding two years, the COVID-19 (coronavirus) pandemic stunted travel markets in Q4 (January-March) of 2019-20. As the coronavirus pandemic continued to spread, countries across the globe responded with travel bans and advisories, resulting in a plummet in demand for flights; many airlines have been forced to slash routes or otherwise ground entire fleets, offering customer the option to amend or cancel travel plans. Accordingly, a Q4 decline has exerted a drag on total outbound tourist trips by UK residents over the full financial year, resulting in what was a 3.6% year-on-year decline in 2019-20 overall. The continued spread of the coronavirus through 2020-21 saw the UK government enact a number of additional policies aimed at reducing international travel. This includes mandating two-week isolation period for those returning from visit to countries with high coronavirus rates. As a result, outbound tourism fell by an unprecedented 87.8% in 2020-21. In the three months through June 2020, outbound tourism fell over 96% year-on-year. Outbound tourism expanded sharply in 2021-22, albeit still significantly lower than pre-pandemic levels, as lockdown measures ease and the government has made it easier to travel to low-rate countries. In February 2022, pre-departure testing was removed for the majority of travellers and all domestic lockdown measures were eased. In the same month, President Vladimir Putin announced that Russia was initiating a "special military operation" in the Donbas region, and proceeded to launch a full-scale invasion into Ukraine. This led to a wave of sanctions which included a ban on Russian operated flights and the UK Foreign Office has since advised against all travel to Russia and Russian operated flights.
This is expected to weigh on outbound tourism by UK residents to affected routes and to Russia itself. Although outbound numbers have recovered significantly, a series of flight cancellations due to staff shortages weigh on the number of overseas visitors. British Airways and other carriers cancelled several flights which reduced overseas travel. Overall, outbound tourism is expected to fall at a compound annual rate of 0.7% to 92 million people in the five years through 2024-25, despite significant growth of 17.6% in 2023-24. The cost of living is placing pressure on households, restricting outbound tourism.
In 2025-26, it is estimated that total outbound trips by UK residents will expand by 2.1% year-on...
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