The UK Tourism Satellite Account (UK-TSA): 2012

• Tourism Direct Gross Value Added (GVA) was £57.3 billion in 2012

• Tourism Direct Employment rose from 1.46 million in 2011 to 1.53 million in 2012

• The number of Tourism Direct Full-time Equivalents rose from 1.15 million in 2011 to 1.22 million in 2012

• Domestic tourism expenditure rose from £99.8 billion in 2011 to £106.6 billion in 2012

• Inbound tourism expenditure rose from £21.0 billion in 2011 to £21.8 billion in 2012

• Tourism Direct GVA was estimated to be £58.7 billion in 2013 and £59.6 billion in 2014

The UK Tourism Satellite Account (UK-TSA) provides information about the demand for goods and services associated with the activity of tourists and the relationship of this demand to the supply of such goods and services within the UK economy.

The TSA methodology is necessary because tourism is defined by the characteristics of the consumer in terms of whether they are a tourist or resident and this, therefore, differs from “traditional” industries such as manufacturing and agriculture which are defined by the goods and services produced themselves.

The UK-TSA sets out the contributions that tourism makes to the economy of the UK as a whole and to individual “tourism industries” in particular. Such industries invariably serve tourists and non-tourists alike and the UK-TSA includes a series of “Tourism Ratios” which estimate the proportions of products supplied in the UK that are consumed by tourists (in Table 6 of the UK-TSA).

The Tourism Intelligence Unit (TIU) in the Office for National Statistics (ONS) has produced the 2012 UK-TSA in this release and was also responsible for previous UK-TSAs covering the individual years from 2008-2011. The underlying concepts and methodology for the new release only differ slightly from those of earlier releases but revisions to the data sources which are used to construct the TSA, in particular the national accounts estimates of the output of industries mean that updated UK-TSA estimates are included here for 2008-2011 to provide consistent estimates for the UK-TSA series.

In this report we present the findings for the 2012 UK-TSA. The data for this is included in sets of TSA tables available as separate downloads, alongside revised data for the 2008-2011 UK-TSAs. Furthermore, a ‘nowcasting’ technique has been applied to the 2012 TSA to provide estimates of the key TSA aggregates for 2013 and 2014. A description of this methodology is available on our website.

As well as providing an indication of the economic importance of tourism in the UK, the report includes information about tourism demand and supply and explanations of the internationally agreed concepts and definitions that are part of the TSA process.

Tourism Direct Gross Value Added was worth £57.3 billion in 2012 and was a 6.3% increase when compared to 2011 where TDGVA stood at £53.9 billion (See table 1). This is a key aggregate of the UK-TSA as it indicates the output of the set of UK tourism industries that is driven by tourism spend directly.

Figure 1 shows the value of each of the individual tourism industries in 2012 and here the main contributor to TDGVA was ‘other consumption products’ which refers to the proportion of output from non-tourism industries that is accounted for by tourism spend. This includes activities such as ‘special shopping’ or ‘personal transport’ and other activities not included within the tourism industries.

The highest contributors to TDGVA other than other consumption products included food and beverage serving services, travel agencies and other reservation services, and accommodation services for visitors, each contributing over £8 billion to TDGVA.

Sport and recreation activities also contribute a high proportion of the total TDGVA estimate in 2012 with that industry worth £2.7 billion with only the afore-mentioned sub-industries and air passenger transport contributing more to TDGVA (Air passenger transport was worth £3.9 billion in 2012). This could reflect the ‘Olympic effect’, in terms of increased output from this tourism industry.

Tourism demand (or tourism consumption) is made up of two types of tourism, inbound tourism, where foreign passengers travel to spend time in the UK or, domestic tourism, where resident tourists travel within the UK on trips defined as tourism. Both inbound and domestic tourism can be broken into two further categories, overnight tourism and excursions (same day visits), although the aggregate figures for domestic tourism can be further split into outbound travel or regular domestic tourism before splitting into overnight visits and excursions (See reference table 2). In this report the focus will be on the aggregate figures for inbound tourism however the reference tables provide the further breakdowns of excursionist and overnight characteristic trips. Domestic tourism will be broken down by excursionist and overnight trips in both the report and the reference tables. When domestic tourism is reported at this level it will not include outbound travel unless specifically stated.

Inbound tourism

Inbound tourism consumption within the UK was estimated to be £21.8 billion in 2012, an increase of 3.7% on 2011 where the value stood at £21.0 billion (See table 2).

Inbound water passenger transport saw a big increase reaching £145 million up 70.7% on 2011 where the figure was £85 million. Figure 2 shows that ‘other consumption products’ was the highest contributor of tourism consumption in 2012, worth £9.3 billion. Beyond this there were three other main areas of tourism demand in 2012. These were:

• Accommodation for visitors, worth £4.5 billion

• Food and beverage serving services, worth £3.3 billion

• Air passenger transport services, worth £3.0 billion

Domestic tourism

Domestic tourism describes the activities of a resident visitor within the UK which can include both tourism trips with an overnight stay and tourism visits without an overnight stay, which is referred to as an excursion or same day visit. There is also an amount of expenditure that takes place within the UK and is associated with UK residents making an overseas visit – this domestic outbound tourism often involves some expenditure on the UK territory before leaving the country, this can include spend at ports or expenditure on outbound flights on UK carriers and this is all accounted for within the TSA. Domestic tourism consumption, therefore, describes the tourism consumption within the UK economy of UK residents. Domestic tourism consumption within the UK was £106 billion in 2012, an increase of 6.8% or £6 billion from 2011.

Figure 3 shows that, apart from other consumption products, food and beverage serving activities, air passenger transport services (for outbound travel), and accommodation services are the key drivers of domestic tourism consumption in 2012. In this chart we provide further breakdowns of other consumption products to highlight the importance of ‘Special Shopping’ and ‘Personal Transport’, which account for 89.3% of all other consumption.

Table 4 focuses on domestic (UK-based) tourism consumption on trips with an overnight stay and shows that there has been a 5.9% increase in expenditure on these trips between 2011 and 2012, an increase of £1.4 billion. The table shows how this change is distributed across the tourism industries with big increases in spend on air passenger transport services, sport and recreation, and exhibitions and conferences and reduced spend on and transport equipment rental and railway passenger transport between 2011 and 2012.

Although other areas of spending such as air passenger transport services, sport and recreation, and exhibitions and conferences had seen big increases since 2011, they were not responsible for the majority of domestic tourism consumption.

Figure 4 shows that spend on accommodation services, food and beverage serving activities and special shopping and personal transport account for 78.3% of all domestic overnight consumption.

Table 5 highlights the importance of excursions, or same day visits, in terms of tourism spend or consumption in 2012. This is largest element of tourism spend in the UK amounting to £57 billion in 2012, an increase of £5 billion or 9.6% since 2011. The table shows how this change is distributed across the tourism industries with big increases in spend on passenger transport services and very large decreases in spend on exhibitions and conferences and travel agencies between 2011 and 2012.

In Figure 5 the main drivers of excursionist spend in 2012 are shown and these include food and beverage serving activities, special shopping, personal transport, cultural activities, and sport and recreation activities. These tourism sub-industries accounted for 87.6% of all domestic excursionists spending in 2012.

Table 6 shows the change in tourism direct employment between 2011 and 2012. This is employment that is directly supported by tourism consumption across the tourism industries. There was an increase of 75,000 jobs in tourism during this period, a 5.1% increase, with the largest gains in passenger transport related tourism industries.

The biggest contributors to direct tourism employment in the UK in 2012 were food and beverage serving activities, other consumption products and accommodation services for visitors, as shown in figure 6.

Table 7 shows the change in tourism direct full-time equivalents (FTEs) between 2011 and 2012 with an increase of 6% or 70,000 tourism direct FTEs.

Figure 7 shows that food and beverage serving activities, accommodation services, travel agencies, and other consumption products were the biggest source of tourism direct FTEs in the UK in 2012.

Figure 8 shows how Tourism Direct Gross Value Added has grown since 2010 when it stood at £49 billion, to £54 billion in 2011 and £57 billion in 2012. Applying a nowcast technique allows estimates of TDGVA to be proposed for 2013 and 2014, £59 billion and £60 billion respectively.

Table 8 shows the change between each year emphasising the high level of growth in TDGVA in both 2011 and 2012, the flat growth in TDGVA between 2008 and 2010 and then the slowdown in TDGVA growth in 2013 and another slowdown in TDGVA growth in 2014. TDGVA growth peaked in 2011 where it was 9.8% and has fallen to 1.5% in 2014.

Table 9 shows the change in TDGVA between 2008 and 2012 and compares it to the change in GVA in other industry sections over the same period. The results highlight the strength of TDGVA growth over the period 2008 to 2012 following the 2008 economic downturn. Growth in TDGVA is higher than all but two of the comparable industry sections; Electricity, gas, steam and air conditioning and real estate.

Table 10 shows that by 2014 the absolute change in TDGVA since 2008 had grown from 16% to 20.6%. However, where other areas of the UK economy have strengthened and the rate of TDGVA growth has fallen from high growth rates (seen in 2011 and 2012), UK TDGVA growth has started to fall behind other areas of the economy in terms of GVA growth since 2008.

Both the professional, scientific and technical and the finance and insurance industries have now seen high cumulative growth in GVA since 2008 and the 2008 economic downturn. Cumulative growth in GVA for the retail industry section has also reached 17.1% in 2014 since 2008 closing in on the 20.6% cumulative growth in TDGVA.

Figure 9 shows a similar picture of TDGVA as table 9 and 10 where UK tourism contributes an increasing share of UK Gross Domestic Product in 2011 and 2012 but this share begins to decline in 2013 and continues to fall in 2014. Where the 2012 Olympics may have driven much of the TDGVA growth in 2011 and 2012 the slowdown in UK TDGVA growth also emphasises the economic importance of Olympic Games to the UK economy in both 2011 and 2012. Future Tourism Satellite Account production will continue to provide evidence of the contribution of Tourism to the UK economy and understand the impact and legacy of events such as the 2012 Olympics from a national economic perspective.