Like the U.S, Britain is feeling the pinch of the slow return of Chinese tourists.
Britain won’t see a full recovery in Chinese tourism next year – it won’t be until 2025 when Chinese tourists return to their pre-pandemic levels, VisitBritain CEO Patricia Yates told the UK Parliament’s Culture, Media and Sport Committee on Tuesday.
“We’re looking to 2025,” said Yates. “We know it’s going to be a slow build back.”
Before the pandemic, Chinese nationals were the second-highest spenders in the UK behind American tourists.
This year, flight bookings from China are down 50%. Yates attributed it to the UK not being approved by the Chinese government for outbound group travel until August.
The U.S. is also seeing a slow recovery in Chinese tourism. Before the pandemic, Chinese tourists spent more in the U.S. than any other market segment, said Brand USA CEO and President Chris Thompson.
Tourist Spending Rises
VisitBritain forecasts 30.9 billion pounds in tourism spending, up 9% from 2019. It expects about 37.5 million tourist visits this year, down 8% from 2019. Tourists are tending to stay longer and spend more, said Yates.
America was Britain’s biggest tourist spend market. One out of every five pounds in tourist spending is by an American, said Yates.
For the rest of the year, VisitBritain will add Australia as a focus for its marketing. Australia is making a good post-pandemic recovery, said Yates.
Film Drives Britain’s Tourism Success
Yates told parliament VisitBritain will lean heavily on films to promote tourism. Film drives tourists to lesser known area areas they normally would not have visited.
“Britain’s a real success story in the films and the filming that is done here,” said Yates. “We have a positive story to tell.”
VisitBritain is currently developing a marketing campaign in 2024 that will promote locations used in movies and TVs. One of them will be Bristol, where the Charlie and Chocolate Factory prequel Wonka was filmed.
Britian’s Tourism Businesses Struggle with Debt
The UK’s hospitality industry is having a steady recovery, but volume remains down and profitability remains a struggle, UKHospitality CEO Kate Nicholls told the committee.
The industry grew 4% and earned 139 billion pounds in revenue, its pre-pandemic level. Business costs including energy, labor and food prices are up double digits. At the same time, businesses have kept their price increases to 10% on average.
Loan repayments are eating away at profits. Businesses operated at loss and took out large loans to get through two years of lockdowns. “What we’ve got is a long economic Covid hitting the sector with high levels of covid-related debt,” said Nicholls.
One in five businesses are breaking even and one in five are operating at a loss, said Nicholls.
Canada’s tourism sector is also suffering from post-pandemic high debt levels.