London tourism industry pivots to long-haul markets in the face of Brexit

Buckingham Palace, Big Ben, the royal family: London is blessed with renowned attractions wrapped in tradition and heritage most cities can only dream of. But with Brexit looming, the UK tourism industry, which supports more than one tenth of the country’s jobs, has hit turbulence.

Almost every industry representative I spoke with used the same word to describe 2018 – “mixed”.

Overseas visitors to the UK were down in the first nine months of 2018 but the industry has adapted, pitching harder for business in lucrative long-haul markets and wooing millennials as enthusiasm for Old Blighty among its European neighbours is waning.

Hardening attitudes

Attracting tourists from Europe after the UK has turned its back on the continent – at least politically – is proving challenging.

Read more: British tourism will thrive – from the EU and beyond 

Europe accounts for two in every three overseas visitors to the UK and almost a third of Europeans view Britain more negatively since the Brexit referendum in June 2016, according to research by Visit Britain, which promotes Britain overseas.

There has been a “real hardening” of attitudes in Germany and the Netherlands in particular, says Patricia Yates, strategy and communications director at Visit Britain. Forward bookings from the continent are down six per cent for the three-month period from March to May.

The industry also frets about other difficulties Brexit may yet unleash. “We have to make sure we avoid these hard border checks and lines,” says Rochelle Turner, research director at the World Travel and Tourism Council (WTTC), an industry body. Images of border queues could impact on Britain’s reputation as a welcoming destination.

Pivoting away from Europe

Faced with headwinds in Europe, the UK tourism sector has pivoted towards long-haul markets, such as the US and China.

London is seeing a “sustained and significant increase in [its] attractiveness to the big markets for tomorrow, which are inherently bigger markets”, explains Allen Simpson, strategy director at London & Partners, which promotes London in conjunction with the mayor, Sadiq Khan.

The number of Chinese visitors grew by a fifth last year. Visit Britain is targeting £1bn in spending by Chinese visitors in 2019, taking the country into the UK’s top 10 tourism markets. The cricket world cup, hosted by England and Wales this summer, is expected to draw big numbers from India, another burgeoning market.

Business with US visitors has also been swift, with flight bookings up 18 per cent this year. Americans spent a record £3.6bn in the UK in 2018.

“It’s our most valuable market,” says Yates. It helps, she says, that the UK has become seven per cent more affordable for US visitors over the past year.

French connection

Even against the testing backdrop of Brexit, all goodwill is not lost between the UK and its nearest neighbours.

Visit London has launched a joint London-Paris campaign, relying heavily on Instagram and other social media channels to attract US millennials to visit both cities in a single trip.

“If you’re bringing somebody over for two weeks, it makes sense to spend a week here and a week there,” says Simpson. “Both centres are seeing an increase in attraction.”

One characteristic of millennial visitors is that they disperse beyond the usual zone one tourist hotspots. “The average younger visitor will tend to want to go and live like a local,” says Simpson. Young tourists party in Peckham and flock to the psychedelic array of neon signs at God’s Own Junkyard in Walthamstow.

Spreading tourists across all of London allows more neighbourhoods to benefit. The risk is that the areas lose their character. “You don’t want to commoditise them,” agrees Simpson.

Still in business?

One market segment facing specific challenges is business travel. Brexit could affect London’s ability to attract business events, some of which are organised up to three years in advance.

“There is concern that those longer-term bookings have been much more difficult to get and that European associations in particular are a bit more wary about coming to Britain,” says Yates. A slowdown would hit convention centres and the hotels that go alongside them.

Read more: London named the world's second most popular city for tourists

But London may weather the storm. WTTC forecasts 1.6 per cent growth in the UK business travel sector in 2019 and an average of about two per cent a year for the next decade. In September the Excel in London’s Docklands will host Sibos, a global financial industry event, which attracts 8,000 leaders in finance, technology and innovation.

It may be a sign that as surely as Buckingham Palace and Big Ben will always draw sightseers, the City will attract a who’s who of banking bosses until Brexit and beyond.