Tourism: opportunities for growth

8 April 2014

Article by Robin Wilkinson, National Assembly for Wales Research Service

LlandudnoIn June 2013 the Welsh Government launched its tourism strategy for 2013-2020, Partnership for Growth. This strategy contains an aim to grow tourism earnings in Wales by 10 per cent or more (in real terms) by 2020.

On the face of it, this may seem like a bold and ambitious aim. However, the Tourism: Jobs and Growth report , commissioned by Visit Britain and published by Deloitte and Oxford Economics in November 2013, paints a picture of a sector with the potential for substantial growth throughout the UK. This report states:

Tourism economy spending in Wales is forecast to grow slightly more slowly than in the other UK nations, at an annual average of 3.7 per cent in real terms, to reach £11.9 billion in 2025, or 5.1 per cent of the UK total.

Though caution should be exercised when using economic estimates, this forecast does at least raise the question as to whether – when set against a backdrop of large forecasted growth in the sector – the Welsh Government’s aim to grow tourism earnings in Wales by 10 per cent by 2020 is particularly ambitious.

Nevertheless, if tourism earnings are to grow in Wales by 10 per cent, a separate question is raised as to how much of this growth will come from the domestic and overseas markets.

In 2013, 89.7 per cent of visitor spending in Wales was from UK residents (see: Tourism: Jobs and growth). Currently – when compared to Wales’ UK population share of 4.9 per cent – Wales is punching above its weight in the domestic tourism market, representing 6 per cent of all domestic visitor spending in the UK.

However, spending by overseas visitors is a different story. Oxford Economics estimates that in 2013 Wales attracted 2.6 per cent of spending by foreign visitors to the UK. When providing evidence to the Welsh Affairs Select Committee, tourism expert Professor Annette Pritchard noted a large decline in the number of visits to Wales from overseas tourists. In 1999 over 1 million staying visits were made by overseas tourists to Wales. This has dropped to 854,000 in 2012. However, Dr Pritchard noted that this trend is common to UK countries and regions outside of London.

The question remains as to how much focus the Welsh Government should put on consolidating its current core domestic tourism market, and how much it should seek to grow the possibly untapped potential of overseas tourism for Wales, particularly from affluent markets such as Germany and North America.

2014 is shaping up to be a key year for the Welsh Government’s tourism aims. It recently announced a new structure for tourism support in Wales: from September, funding will cease for the Regional Tourism Partnerships (four public-private sector bodies that provided tourism support on a regional basis), with their function to be replaced by a new Regional Engagement Team within Visit Wales. Wales will also be visible on a world-stage in a way it perhaps hasn’t been since the Ryder Cup in 2010, when world leaders visit Newport for the NATO summit in September. This year also marks the centenary of Dylan Thomas’s birth, and a roster of events has been laid on to celebrate the legacy of this internationally popular literary figure.

All these issues and more will be considered by the Assembly’s Enterprise and Business Committee as it carries out its forthcoming inquiry into tourism in Wales. The Committee is seeking people’s views on these issues in a consultation that closes on 14 May, with the Committee intending to start taking oral evidence from witnesses in June.