4.3 Midway scenario
The ‘Midway’ scenario, despite still being challenging, has a significantly higher likelihood of being realised than the Cameron 50:50 scenario, especially under certain conditions and interventions. These would include: a stronger depreciation in Sterling (boosting the UK tourism industry’s
price
competitiveness), a reduction in VAT on accommodation to comparable levels in European competitor countries (although the prospect of this is unlikely given state of public finances and the coalition Government’s aim to reduce the fiscal deficit), and greater marketing / promotion of the UK as a visitor destination for UK and non-UK residents.
Under the ‘Midway’ scenario, UK resident visitor spend in the UK rises gradually by 2015 to levels seen in recent years (and as a share stays stable at 40% of the UK visitor spend total). UK resident visitor trips overseas stay stable at its current recession lower level as opposed to the long-term upward trend. Overseas visitor trips to the UK grow slightly above the historic pre-recession trend.
In the ‘Midway’ scenario, the contribution of the UK direct hospitality economy rises to 2.76 million jobs by 2015 and 3.09 million jobs by 2020, from 2.44 million currently.
Note the knock-on visitor impact to the core UK hospitality industry is calculated as follows. Additional visitor spend above the trend baseline outlook is allocated across direct domestic industries using UK Tourism Satellite Accounts from the First Steps DCMS project. Multiplier impacts are modelled as before using the same input-output technique. Hospitality employment rises through both direct visitor spending in the industry and multiplier impacts.
In the ‘Midway’ scenario, 236,000 net additional jobs are created in total in the economy by 2015. Of the 236,000 total net additional jobs, an estimated 102,000 would be in the hospitality sector (i.e. the figure outlined above).
4.4 Summary of scenario assumptions and impacts
A summary of the key scenario assumptions and impacts are presented in the table and charts below. Additional charts are presented in Annex C.
Table 4.1: UK visitor economy scenario assumptions and direct hospitality economy employment contribution
2010
Visitor economy UK resident overnight visits in UK (m)
UK resident overnight visitor spend in UK (£bn) UK resident visits overseas (m) UK resident visitor spend overseas (£bn) Overseas resident visits to UK (m) Overseas resident visitor spend in UK (£bn) Visitor spend balance of payments (£bn)
Hospitality economy Direct employment (000s)
Source: Oxford Economics
2015 (Trend baseline)
2015 (Midway) 2015 (Cameron 50:50)
Impact 2015 (Midway)
Impact 2015 (Cameron 50:50)
121.6 21.9
96.4 18.8
106.7 25.4
116.7 31.7
60.370.259.849.9 32.444.638.031.7
31.134.635.736.7 16.919.219.920.4
‐15.5 ‐25.4 ‐18.2 ‐11.3
10.3 6.6
‐10.3 ‐6.6
1.2 0.6
7.2
20.3 12.9
‐20.3 ‐12.9
2.1 1.2
14.1
2,441
2,656
2,758
2,855
102
199
18
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