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Chapter one
IMPACT OF CREDIT CRUNCH:UK tourism sector is recognised as the sector that catalysed UK’s recovery after the global recession in 2008 (Tourism Alliance, 2014). According to the National Office of Statistics, UK, the tourism industry provided one-third of the new jobs from 2010 to 2013. In 2013, the tourism sector contributed about £126.9 billion to the UK economy. This amount represents 9% of the UK GDP (Deloitte, 2013). These figures clearly indicate the significance of the tourism industry to UK’s economy and GDP. There are various attractions across the UK that visited every year by a high volume of tourists.
Attraction is simply a place where tourists or people mostly go for amusement and leisure purposes, adventure, its beauty, history or culture. During the summer or and when the weather is pleasant, tourists often flock to places of natural beauty like national parks, forests, mountains, reefs, camping sites, beaches and island resorts. Cultural attractions, on the other hand, are things like zoos, museums, aquariums, art galleries, temples and monuments. Examples of these attractions are structures and building including places like theme parks, castles, bridges, live history museums, caravans and carnivals.
Many tourist attractions across the world have information centres that provide their customers with flyers and brochures with details of recreational places, restaurants, hotels and different travel packages that they offer. Many tourist attractions are popular because they provide customers with an unforgettable experience at very affordable price and in many cases free admission.
These quiet a breath of fresh air to people as most tourists often fall for what is known as the tourist trap where tourists overpay for services which are lacklustre and very low in quality. The organisations that sell tourist traps to an unaware visitors often try to take advantage of tourist numbers in the area.
Franklin (2003) describes tourism as a “heightened experience of ordinary life”. Tourism is seen as an experience of modern life and its celebration rather than an escape. Tourism does not necessarily involve travelling internationally, away from one’s country or home, it can also be from the traveller’s country. This is described in two terms; domestic and international tourism. Domestic tourism is described as people visiting destinations within their own country’s boundaries (Hawkins and Middleton, 2009).
The World Tourism Organization (2016) describes international tourism as “going beyond the common perception of tourism as being limited to holiday activity” as tourists are travelling to places which are usually outside their usual environment and they do not stay for longer than a year depending on the reason for travel. Different reasons for travelling can be for business, leisure, culture, pleasure or other purposes. Wanhill (2003) describes tourism as the ‘temporary movement of people to destinations outside their normal places of work and residence and the activities undertaken during the time spent at those destinations’.
Temporary’ means tourists usually stay up to one year in international tourism and from a few weeks to months in terms of domestic tourism. Tourism is a growing competitive industry that requires the ability to adjust continuously to the changing customer’s needs and requirements. The main focus of the tourism business is to make sure customers are safe, satisfied and enjoy their holidays. Tourism has a wide variety of sectors that provide different products and services to tourists. However, these businesses also deliver products and services to local residents.
Tourism is an important sector of the UK economy. Current estimates show that in 2006 consumption by tourists accounted for 3.3 percent of UK gross value added (GVA). Between 2000 and 2008 inbound tourism costs grew at an average rate of 3.3 percent each year. However, throughout this period, the economic growth was the strongest in the UK. Since then the UK has endured its biggest post-war recession as most important economies around the world. This has affected the tourism sector in the UK and globally. Household consumption, both domestic and international has been affected by declining asset values and rising unemployment. This is the reason why the tourism industry is badly affected by a global economic downturn. Organisations in the tourist industry reducing costs and curtailing business expenditures due to decline in economic activity deterring further investment in the tourism sectors.
Companies and household sectors are looking to rebuild savings through cost cutting off more flexible components of spending. Yet the net effects on tourism spending in the UK are not obvious. For example, the weak economic position of households and companies may change outbound tourism to domestic tourism. This is a phenomenon known as a staycation result. Since the second half of 2008 staycation effects have been supported by decreasing the value of sterling as this made the outward trips for residents more expensive compared to domestic travel.
The decline in the sterling value also makes inbound tourism more attractive and cheaper for foreigners. Current evidence from the Consumer Trends shows that the net tourist spending has contributed to a negatively to household consumption growth during the recession. This trend is also validated by the findings reported in the Travel and Tourism Statistical Bulletin. The statistics show that UK visits abroad have suddenly fallen more than foreign visits to the UK.
Research Aim
The aim of this research is to evaluate the impact of the credit crunch on the tourism industry of UK. Since the UK tourism industry is huge, the dissertation will look at the industry as a whole with more focus on attractions in London. The dissertation will also study the pre and post-recession effects on the UK tourism industry……………………………..
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