This past summer, we visited London. One of the impression that we shared from our trip was that it seemed like everyone was there. Our guess was that the cheaper currency was one key reason why London was 2017 hot travel destination.
Were our impressions correct? Did everyone go to London for holidays this past summer? We’ve had to wait for a while but the statistics are finally in.
The answer is YES and NO.
Summer Visits Up 6% YoY, Spending up 4%
According to the latest monthly inbound tourism data from VisitBritain.org, there were 3.9mn visits to Britain in August 2017. Over the three summer months of June to August, there were 11.5mn tourist visits, up 6% YoY. Tourist spending reached £7.8bn between June and August 2017, up 4% YoY.
Looking at the trailing 12 months data ending August 2017, 39.65mn visited Britain and spent £24.01bn. Tourist visits and spending rose by 8% and 7% over the same period last year and are the highest that they have ever been.
…but the growth rate is really slowing
While tourist arrivals and spending have continue to set new records, the bad news is that the growth rate is slowing rapidly. Compared to the first four months of 2017, when tourist arrivals had risen 11% YoY and spending had grown 14% YoY, the cumulative growth rate over 8M 2017 has now slowed to 8% and 10% respectively.
For the latest three months data, the rolling visit and spending growth was only 6% and 4%, lower than the Feb-April 2017 growth of 11% and 14% respectively. This suggest that as we come to the one year anniversary of the Brexit vote, the draw of the cheaper currency may be starting to fade.
On the other hand, business is picking up
Although holiday visitors are still growing the fastest with 8M 2017 growth at 17%, the rate of increase has dropped off by 9pp since 4M 2017’s 26% YoY growth. Similarly, those visiting family and relatives as well as miscellaneous purposes have also slowed by 2pp and 10pp respectively. Notably, the only category that has improved since April are the business travellers. Compared to the -4% YoY decline noted in 4M 2017, the rate of decline has now slowed to -1%, suggesting that business visits are resuming despite the uncertainty with Brexit.
…so are visits from North America and Other EU countries
In addition to business visits, the regional breakdown of visitors also show that arrivals from North America and Other EU countries have accelerated over the summer months. Compared to 4M 2017’s 16% YoY growth, North American visitors growth picked up another 2pp to 18% for 8M 2017. This was largely due to very strong visitor growth in May-July as August North American visitors actually dropped by 8% YoY. The biggest swing however was from Other EU countries which went from -5% in 4M 2017 to +7% in 8M 2017.
Overall, still a good set of numbers just don’t project too far ahead
Overall, despite the slower rate of growth, the summer tourist figures are still very good. For the trailing 12 months ending August 2017, both total visitors (39.65mn) and visitor spending (£24.0bn) are all-time highs. And compared to 2014 and 2015, visitors/spending are up 15%/9% and 10%/9% respectively . That said, with growth rate slowing, just don’t project too far ahead.
Anyone want to venture a guess what’s the next popular summer vacation spot? My bet is on the US.Embed from Getty Images