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How tourism contributes towards the UK economy Assignment Sample

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Introduction - How tourism contributes towards the UK economy

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How tourism contributes towards the UK economy

Tourism is considered to be as the important sector in united Kingdom which has contributed a lot towards economic development of nation and generation of employment for people. In present era, spending holiday and traveling for educational or business purpose has become the common trend. Social factor has supported industry in achieving success and fostering growth. Tourism sector It stimulates trade, income and entrepreneurship specifically in small business sectors. Tourism sector also contributes to the regional development and assist in promoting the destination. It also helps in generating the cultural awareness and plays significant role in attracting visitors. Tourism generates foreign exchange which can be utilized for bringing improvement in the nation. It also provides government to earn income by collecting taxes.

The purpose of the report is to identify the way tourism contributes to the economic development of United Kingdom.

The hospitality industry includes enterprises that provide accommodation, meals and drinks in venues outside of the home. These services are provided to both UK residents and overseas visitors. Hospitality sector covers the provisions of accommodation, food, drinks which are provided by travel companies to visitors. Tourism is recognized as the important market sector in United Kingdom which is contributing towards economic growth of a country. Tourism industry in UK is taking high initiative for promoting the destination and influencing visitors to visit particular destination. Tour and travel companies are developing as well as introducing the attractive tour packages for attracting traveler to make choice to visit particular destination.

Tourism is regarded as the sixth largest industry in the United Kingdom bringing approx. £104b income every year. The main sectors of the tourism industry in United Kingdom are hospitality, attractions, events, visitor transport, education and tourism services. Tourism industry also contributes to the social development of nation. Many of the countries are trying to compete with tourism sector in United Kingdom. Government in United Kingdom is also supporting tourism industry in fostering growth and attracting the visitors. Legal authority has providing funds to tourism industry which is them utilized by tour and Travel Company for development or improvement of destination (Carver and Byrd, 2008) The tourism sector has taken permission from the legal authority in the nation for opening of casino, for attracting the visitors and provides them entertainment facilities.

Travel and Tourism Company in United Kingdom has reduced the prices of products as well as services which has allowed firm to attract wide number of traveler. Low pricing strategy has been adopted by tourist to target foreign tourist especially those who are interested in traveling with low budget. The tourism sectors in United kingdom offers wide range of tourist attractions and in return earn high amount of income which is contributes towards the economic as well as social development of nation. The travel and tour companies in United Kingdom also provide wide variety as well as range of services to visitors such as transportation, accommodation, facility of food etc. Tourism industry has not only provided the income source to the government but also supported other small medium organization in increasing their profitability and sales.

Tourism industry has form partnership with transportation as well hotel companies in order to provide several facilities to tourist. This activity has allowed tourism industry to attract more number of visitors and influence them to make frequent visits to destinations in United Kingdom. As per the report of World Travel and Tourism Council has provided this evidence, quantifying this sector have positive as well as direct impact on the employment and also on economic development of nation. With the passage of time role of tourism industry has becomes even more crucial. Tourism industry acts as an engine of economic development. Tourism sector allows sharing of culture and assist in maintaining peace as well as developing mutual understanding (Chang and Chen, 2008)

The direct contribution by tourism to gross domestic product is reflected by investment made by government on tourism and return gained by legal authority by investing funds on tourism sector. The straight contribution of travel and tourism sector to Gross domestic product is calculated to be consistent with the output. The way Contribution made by the tourism sector towards economic development of nation includes local purchases of product or services from other companies operating in related or different industries. Investment made by tourism sector has significant aspect of both current and future activities.

The direct contribution made by tourism sectors during 2016 towards gross domestic product is estimated to be around 65.2 bn. This data or information reflects all the economic activities conducted by tourism sector such as services provided by travel agent, transportation facilities to visitors etc.

Travel and tourism sector has also contributed a lot towards generation of employment in United Kingdom. It also includes employment opportunities provided by hotel industry, transportation sector. Visitors exports are considered to be as important component of direct as well as significant contribution made by tourism industry. With the high initiatives as well as effective policies' tourism industry has able to attract approximately 15.5 bn capital investment in year 2016 (Christou, Sigala and Gretzel, 2012)

The types of tourism service of facilities provided by travel and tourism industry in UK such as mountain as well hill tourism, activities at destination , cultural and Eco-tourism all these factors have contributed a lot to make United kingdom being a most visited destination. It is only due to the activities conducted by tourism industry, United Kingdom has able to become a sixth most popular destination in the world. Inbound tourism is considered to be one of the United Kingdom top export sector which has able to attract wide number of traveler during last few years. Tourism sector has helped in improving as well as developing domestic infrastructure and services. This factor has positive effect or influence on local as well as visitors. Tourism industry in United Kingdom has also played a significant role in improving the efficiency of economic system in a country (Clarke, I. III, and, 2009)

Leisure activities conducted by tour and travel company have more flexibility, there are several destinations where leisure activities can be executed. Tourism as well as leisure activities are considered to be as a significant component of labor market. Heritage tourism has also made a great as well as significant contribution towards economic development of United Kingdom. During 2015 the total receipts accounts for approximately 3.3 percent ,from international tourism. Among several destinations in United Kingdom Germany, United state of America and France are recognized as among top visited places which has attracted estimated 38 percent visitors. Inbound tourism has positively influenced visitors to make frequent visit.

In addition to this several facilities as well as quality services provided by tour and travel companies has inspired visitors to stay at destination for longer period. There is also some indirect effect on visitor's economy through interaction with other companies in supply chain. Leisure activity conducted by tour and travel companies has contributed estimated 2.7 billion euro towards the economy of United Kingdom.

The income generated by tour and travel companies is circulated through a country and it has multiple as well as positive effect on the country. Leisure activities conducted by tour operator provide direct economic benefit to nation. Induced impacts – employment and activity supported as employees within the hospitality sector and its direct supply chain spend a proportion of their wages on consumer goods and services. This stimulates economic activity in retail and leisure outlets and their domestic supply chains. Tourism sector also supports nation in maintaining economic stability. The composition of UK hospitality industry's gross value added and turnover contributions(Heung, Kucukusta and Song, 2011) Overall, the gross value added contribution of the hospitality sector to the United Kingdom economy is around half of the employment.

Since a proportion of the hospitality industry's supply chain purchases are made from other companies operating in hospitality sector, and employees in the tourism industry spend some of their earnings within the industry (Jackson, 2008)


It has been concluded from the report that Tourism has generated the source of income for government or local people. Assignment has also concluded that tourism is essential for economic growth of nation. Tourism sector has also generated employment opportunities for local people. Study has also demonstrated the way tourism industry has contributed to the economic development of nation. It has been concluded that inbound tourism has played significant role in attracting the capital investment and influencing traveler to visit particular destination. Assignment has also concluded that tourism sector has also supports wide range of business in increasing their sales as well as profitability.

It has been suggested that with the growth of travel and tourism industry, there is requirement of improvement in tourist system.


Books and Journal;

  • Carver, P. and Byrd, J., 2008. Marketing a European experience to the less traveled. Journal of American Academy of Business. 14 (1). pp. 131‐6. 
  • Chang, H.H. and Chen, S.W. 2008, The impact of customer interface quality, satisfaction and switching costs on e‐loyalty: internet experience as a moderator. Computers in Human Behavior, 24 (6). 2927‐2944.
  • Christou, P. E., Sigala, P. M. and Gretzel, P. U., 2012. Social Media in Travel, Tourism and Hospitality: Theory, Practice and Cases. Ashgate Publishing, Ltd.
  • Clarke, I. III, and, 2009. Student intercultural proficiency from study abroad programs. Journal of Marketing Education. 31. pp. 173‐81. 
  • Heung, V.C., Kucukusta, D. and Song, H., 2011. Medical tourism development in Hong Kong: An assessment of the barriers. Tourism Management. 32(5), pp.995-1005.
  • Jackson, L., 2008. Residents' perceptions of the impacts of special event tourism. Journal of Place Management and Development. 1 (3). pp.240 – 255.
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