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Chinese to be the driving force of tourism

InterContinental Hotel Group has today reported that due to the rise in household incomes, the Chinese middle class will be the driving force of tourism over the next decade, with China having already overtaken the United States as the largest source of international travel spending last year.

Our recent work on an Economic Development Agenda for London looked at using the future growth in tourism to create large-scale employment growth.

London has more international overnight visitors, and attracts more spend from them, than any other city in the world.

Tourism today represents over £9 billion in Gross Value Added (GVA) and 200,000 jobs across London; the sector has seen its GVA contribution grow at an annual rate of 11% since 2009, and its total employment grow at 4% annually over the same period.

This expansion has been driven largely by growth in the spending of international, rather than domestic, tourists, with the majority of international visitors coming from Europe today.

Tourism is a particularly important economic opportunity for London because the sector drives strong growth in relatively accessible jobs that can help address employment challenges for Londoners in the context of an economy that is shifting to higher productivity overall.

But figures from the UK China Visa Alliance (of which London First is a primary funder) show that only around 15% of the 1.6 million Chinese visitors to Europe each year obtain a UK visitor visa.

This means that 1.3 million Chinese people are travelling half way around the world to Europe but do not make the short trip across the Channel to spend their money in Britain because they don’t have a UK visa.

London First has been campaigning through the UKCVA, for an improvement in the visa process for Chinese tourists. Specifically by streamline the process for those applying for UK and Schengen visa in parallel.

Figures released last year by the UKCVA found that:

  • UK could be set for an additional £1.2bn in Chinese spend per year if visa restrictions were loosened, with these visitors currently spending on average £741 per transaction in UK shops.
  • The report reveals 90% of Chinese tour groups to Europe missing out the UK each year
  • Chinese consider UK 2nd hardest country to gain a visa to behind the usa
  • 71% of Chinese tour operators would put UK on European itineraries if visa application process were simplified or merged with the Schengen visa

Read more about our work on tourism

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