Jul 10 2020
In recent years, domestic tourism in the United Kingdom has been rising, fueled by the low value of the pound and rising temperatures making UK weather more pleasant for holidaying and exploring the country. In 2018, domestic tourism, or staycations, outweighed outbound tourism and a study by hotel operator Travelodge from 2018 concluded that the United Kingdom is a ‘staycation nation’. According to the national tourism agency VisitBritain, British residents took a record 60.5 million staycations in 2019, spending just under £14.5 billion. During the current year, the COVID-19 (coronavirus) pandemic has caused significant disruption to the economy, with tourism being one of the most affected sectors. The tourism industry came to a standstill following government-imposed social distancing measures and restrictions on non-essential travel, with the United Kingdom entering lockdown on 23 March 2020 in a bid to limit the spread of the coronavirus. Operators in the Hotels, Holiday Accommodation and Caravan and Camping Sites industries have faced huge implications, having to temporarily cease operations and effectively not generate any revenue. According to forecasts from VisitBritain from 30 June, domestic tourism spending in England is expected to decline by 48% over 2020 compared with the previous year, representing a decline of £36.8 billion.
In a breath of fresh air for the battered tourism industry, holiday accommodation reopened from 4 July in England and 3 July in Northern Ireland, and has be announced to be reopening from 15 July in Scotland and 13 July in Wales. The domestic tourism industry will therefore be open in time for the summer season, when it is usually the busiest. Since opening dates were announced, many accommodation operators reported a surge in traffic and bookings due to pent-up demand. Holiday rentals portal HomeAway stated that Devon, Cornwall and Norfolk have benefited from the highest demand. Meanwhile, campsite booking website coolcamping.com reported a 750% increase in traffic compared with the previous year and Hoseasons, a luxury lodge specialist, announced a year-on-year sales rise of 270%. At the same time, hotel chain Best Western recorded bookings increase of 700% between 22 June to 26 June and Harbour Hotels reported web traffic increase of 210%. According to global hotel consultancy HVS, 60% of UK hotel demand comes from domestic sources and, as many UK residents are likely unwilling to holiday abroad, domestic hoteliers are benefiting and this may even help some stay in business until international tourism picks up again.
The hospitality sector, including museums, galleries and attractions, has also been given the green light to reopen on the aforementioned dates across the United Kingdom. Domestic tourism is expected to benefit from this, with a survey of 2,001 UK adults by job board Caterer.com finding that 53% of Brits would not book a staycation unless restaurants, pubs and bars were open in the area. Though permitted to reopen, establishments must have stringent measures in place, although social distancing was reduced from two metres to one metre, which is expected to provide some relief to businesses. However, the inability to operate at full capacity, excluding some services, providing extra staff training, improving hygiene and adhering to government guidelines will increase costs for hospitality establishments and some businesses may decide it is not viable to open up with such restrictions in place. As many consumers may still be fearful and lack confidence in taking a holiday and being accommodation establishments and pubs, VisitBritain unveiled an industry standard called We’re Good To Go, which is awarded to businesses that adhere to government guidelines on the coronavirus restrictions. In a further bid to support domestic tourism, there has been a suggestion of an additional bank holiday in October 2020, as the hospitality sector lost out on the Easter weekend bank holidays and a further two bank holidays in May due to the coronavirus lockdown, which means that many businesses lost out on extra consumer spending. The survey by Caterer.com found that 52% of people are in favour of an extra bank holiday, while 39% said they would likely plan a staycation if the long weekend is to be introduced.
Home or away
Travel across borders was effectively halted from the end of March and international tourism consequently dropped down to zero. However, on 3 July, the government published a list of 59 countries which are exempt from the 14-day quarantine rule for people returning to the United Kingdom from 10 July in England, in so-called travel corridors. This may spell trouble for domestic tourism, as some consumers are likely to use this opportunity to book holidays abroad. Many travel agencies and tour operators, such as TUI, are offering cheaper deals to lure in customers and make up for the drop in consumer confidence and incomes. For example, The Financial Times states that UK-based price comparison website TravelSupermarket.com has reported price declines of between 22% and 37% for southern European package holidays since the lockdown began. This is likely to incentivise some consumers to opt for holidays abroad, to the detriment of domestic travel. However, falling incomes, the lower value of the pound and, most importantly, fears of contracting the virus are anticipated to limit demand for travelling abroad. Moreover, some restrictions and guidelines to visiting attractions and other public places can put off consumers for opting to go on expensive holidays abroad, encouraging them to instead wait until conditions improve. These factors could support demand for domestic travel, as people have been under severe restrictions for a few months and may be yearning for a get-away closer to home.
The introduction of ‘travel corridors’ is expected to constrain demand for domestic tourism, although the recovery of international tourism is likely to be slow, as people’s fears over the coronavirus remain high and incomes are falling. Domestic tourism would benefit from pent-up demand now that restrictions on domestic tourism are eased, with UK residents foregoing holidays abroad for cheaper domestic holidays. This is likely to somewhat limit the decline of the tourism industry, although it is still expected to contract significantly this year. Looking forward, the United Kingdom is expected live up to being a staycation nation as British residents continue to explore the country. The pandemic may result in more domestic consumers appreciating what the United Kingdom offers and make them willing to take more domestic trips in the future. However, the recent surge in staycations is unlikely to sustain in the longer term, once global conditions improve and the coronavirus is not regarded as a risk, as this would be expected to cause consumer confidence to improve and many would inevitably switch to travelling abroad once again.