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The long-term impact that Covid would have on international travel was one of the great unknowns from the pandemic. Some suggested it could take years to recover with forecasts by VisitBritain indicating it would remain at just over half 2019 levels this year.
Such a slow recovery would have implications for London in particular, given how popular it was as a tourist destination. But are we starting to see international tourists returning to the streets of the capital?
Greater London accounted for more than half of overnight visits and spend from international visitors to Britain in 2019. With £15.7 billion of spending, tourism was equal to roughly 3 per cent of London’s GDP.
Unsurprisingly, both overnight visits and spend declined sharply in 2020 and 2021. Figure 1 shows a £13 billion decrease in spend by international visitors in London from 2019 to 2021, a fall of 83 per cent. This reduction was greater than the £9 billion decrease (or 74 per cent) experienced in the rest of Britain combined. (Survey data collection impacted by Covid-19 restrictions.)
Source: ONS, International Passenger Survey; London First; Centre for Cities calculations
International visitors spent their money primarily in the central boroughs, with one study estimating that 84 per cent of their spending in 2017 occurred in the boroughs of Westminster, Camden, and Kensington and Chelsea alone. Using this share would suggest that spending by international visitors in these boroughs decreased by nearly £11 billion from 2019 to 2021.
Overnight visits to London declined from 21.7 million in 2019 to just 2.6 million visits in 2021. Figure 2 shows that from January to May of 2021, international visitor numbers to the UK were only 2 to 3 per cent of their 2019 monthly baseline.
However, international visits are now on the rise. Visits to the UK have been increasing steadily since July of 2021 (excluding a brief dip in December and January), and as of April 2022, they are at 67 per cent of their April 2019 baseline (see figure 2). The picture for London is even more positive, with international passenger numbers for the city’s airports (excluding Luton airport, for which data isn’t yet available) in May 2022 reaching 77 per cent of their 2019 baseline, and room occupancy reaching 89 per cent.
Source: ONS; UK Civil Aviation Authority; Visit England; Centre for Cities calculations
Assuming the March to April increase to the baseline for visits to the UK remains constant – at roughly 8 percentage points – monthly international visits to the UK should return to their 2019 levels by August 2022. This would be quite a turnaround.
Most importantly for London businesses, Figure 2 shows that estimated spending by visitors to the UK has generally mirrored the numbers of international visitors, and recently exceeded it, reaching 82 per cent of its 2019 baseline in April.
Covid-19 hit central London twice over by turning off the flow of workers and tourists to the city – two key sources of custom for its cafés, bars and restaurants. However, the return to the office seen in recent months and the return of tourists both suggest the Capital might be back to pre-covid before long.
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