The United Kingdom is one of Europes most influential state. United Kingdom is a autonomous province positioned near the north-western seashore of Continental Europe ( Appendix 1 ) , consisting of England, Scotland, Wales and Northern Ireland. The UK is surrounded by the Atlantic Ocean, the North Sea, the English Channel and the Irish Sea.

The UK is one of the 27 member provinces of the European Union and is spread across about 243,000 sq. kilometer ( about 94000 sq. stat mis ) . The UK has the universe ‘s 7th largest economic system by nominal GDP and eight largest economic system by buying power para. It was the universe ‘s first industrialised state Mathias ( 2001 ) .

Tourism is one of the foremost industries in the UK size wise. Harmonizing to statistics by Wikipedia, the UK is the universe ‘s seventh biggest tourer attractive force behind France, USA, China, Spain, Italy and Turkey, with about 29.2 million visiting in 2011. In 2011 15.3 million visitants exhausted clip in London with an estimated disbursement of over ?9.4bn that represents 52 % of all inward visitant disbursement calculated by VisitBritain in 2011. ( Appendix 2 )

It is predicted that UK touristry could turn to ?188b within the following decennary that is 60 % by 2020 and the figure of occupations related to touristry could increase 264,000 to 2.89 million, harmonizing to VisitBritain.

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Recently nevertheless, the UK touristry industry though holding a great potency of turning faces some challenges and a serious competition from other most visited tourer finishs.

Critical Analysis:

UK touristry industry can easy be analysed critically with the aid of Michael Porter ‘s five forces theoretical account. Porter in his five forces theoretical account refers to an organisation but can be applied to a certain industry via which we can find the competitory strength and failings of that peculiar organization/industry. ( Appendix 3 )

PORTER ‘S 5 Forces:

Porter ‘s five forces include:


When it comes to tourism, people want to research new intriguing states and that is why new entrants catch the attending of travellers. The UK touristry industry faces menace by new entrants such Turkey, Germany and Egypt while Malaysia and Mexico have attracted many tourers in 2011.

The estimated figure of international tourer reachings in the UK boulder clay June 2012 were around 29.2 million which was 28.3 million in 2010 and the alteration from 2010 to 2011 had an addition of +3.2 % harmonizing to UNWTO ( 2012 ) .

In 2011, Turkey climbed up in the most visited tourer finish above the UK to go the 6th most visited tourer finish in the universe with an estimated figure of 29.3 million tourers which was 27 million in 2010 and showed a monolithic +8.7 % changed from 2010 boulder clay 2011 mentioned in Tourism Highlights by UNWTO ( 2012 ) .

The UK is confronting a serious competition from Germany, which had 28.4 million visitants in 2011 and has shown +5.5 % alteration from 2010 until 2011.


Most of the tourers look for alternate finishs when they face jobs in acquiring visas, engagements etc. and that is when replacements get the upper manus. In Europe, Spain, France and Italy have been the biggest rivals of the UK touristry industry from the beginning, pulling immense sum of involvement from tourers all over the universe.

France, which has been the most visited tourer finish and a state with a romantic image, still leads the raking of tourers sing with about 79.5 million and is 3rd in grosss with US $ 54 billion. Spain is 2nd on the earners list with US $ 60 billion with approx. 57 million reachings in 2011. Italy, ranks 5th with 46.1 million tourers in 2011 and grosss of $ 43 billion in 2011 UNWTO ( 2012 ) .


There is a batch of influence of purchasers and providers on a touristry industry. In this study, purchasers are the chief circuit operators of the merchandise here, which is touristry. There are many circuit operators working in the UK that offer competitory monetary values to tourers and price reductions such as Thomas cook. They identify new locations/places and possess the power of converting tourers to see those finishs that has a lost cost attached to it.

For every touristry industry, three “ A ‘s ” are really of import and this similar is the instance with providers. The three A ‘s are:




Attractions include those topographic points that are either celebrated for their natural beauty or are built in such a manner that attracts tourers. If such topographic points are owned by the government/owners, tourer should be allowed to see them and the proprietors should ever welcome them. There are many topographic points in the UK that attracts a batch of tourer merely because of their natural beauty or the manner they are being constructed like

The Tower of London, Windermere Boat Cruises, Flamingo Land Theme Park and Zoo, Royal Botanical Gardens, Stonehenge, Eden Project etc. Comfortss include basic comfortss for tourer such as hotels, guesthouses, motels etc. A batch of support is needed for this and at that place has to be a proper expression after of these installations. Last but non the least, Access includes agencies of going. The UK has an first-class transit system that includes airdromes, railroads, coachs, expresswaies etc. London is celebrated for its magnificent underground tubing system, which serves about 3.22 million ; people daily UNWTO ( 2012 ) .

PEST Analysis:

UK touristry industry can besides be analyzed by making PEST analysis. Which comprises of Political Factors, Economic Factors, Social Factors and Technological Factors.

Political Factor:

Political factors are those in which there is governmental intervention such as Torahs, policies, duties, good and services, instruction, substructure etc. When we talk about concerns, political factors plays an of import function in the ordinance and operation of it. Political environment of the UK is reasonably stable.

There have been minor ups and downs with the issues sing the UK connection EU and accepting Euro plus European Union ‘s enlargement and the UK back uping USA in its terrorist act run, which has adversely affected its political stableness. Other cardinal issues includes the Visa Processing by the UKBA, VAT on touristry services, Air Passenger Duty etc.


Over the past few old ages, there has been a batch of new regulations and ordinances by the UKBA because of which many tourers face jobs in acquiring their visas even after paying a brawny amount in visa fees. A short term visa to the UK costs ?78 which is ?25 more than that of a Schengen Visa ( ?53 ) that gives an entree to 25 counties and this is why 50 % more visitants from India travel to the UK via France. From 2000 boulder clay 2009 the gross generated via tourers from other states has increased by 37.4 % ( in USD ) which when compared to France ( 49.7 % ) and Germany ( 85.6 % ) is really low, harmonizing to Tourism Alliance ( 2012 ) .

Those tourers that come from counties other than the EU or those who require a visa are about 11 % of all tourer that visit the UK ( 3.4m ) and spend a batch on their traveling disbursals per trip that contributes to an approx. ?3 billion to UK ‘s economic system, Tourism Alliance ( 2012 ) .

Value-added taxs:

Harmonizing to recent statistics by Tourism Alliance ( 2012 ) , the UK is one of the lone four ( others include Denmark, Slovakia and Lithuania ) out of 27 EU member states that charges full rate VAT to tourist on adjustments which is the 2nd highest rate of VAT in Europe. This can be in a sense harmful to the UK touristry industry when compared to other tourer finishs across Europe. If the UK reduces revenue enhancements on adjustments and celebrated tourer finishs, it could ensue in a net income of ?2.6 billion over the following 10 old ages harmonizing to Deloitte/Tourism Respect. Other locations that have a full rate VAT in the UK includes amusement Parkss, museums, theatres, shows and film and the UK besides charges full rate VAT on eating house repasts which in EU states averages up to 8.8 % . , while the mean rate of VAT on adjustment in Europe is 10.3 % as per statistics of Tourism Alliance ( 2012 ) . When we look at rivals of UK, France in a twosome of old ages after cut downing VAT on eating house repasts from 19.6 % to 5.5 % showed that there were approximately 62,700 new occupations in that sector Tourism Alliance ( 2012 ) which is a clear indicant of what other states are seeking to accomplish and alter in their touristry sector.


IATA predicts by looking at the current figures that in 2014 there will be an estimated 3.3 billion tourer going via aeroplanes of which 2 billion will be going domestically. In November 2010, the UK Government increased APD of up to 55 % and statistics from Tourism Alliance survey in 2012 shows that APD has jumped to 650 % for riders going in economic system category and 750 % for those going in concern category in the old 5 old ages that contributes approx. ?2.2 billion annually in gross to the Government. A study by Oxera for Airport Operations Association in 2010 showed that if the authorities replace APD with that of EU, the Gross Value Added would demo an addition of ?4 billion and there will be about 100,000 more occupations.

Economic Factor:

Economic factors are those due to which the disbursement of tourers can be affected. It includes rising prices in the state, employment/unemployment statistics, Exchange rates, GDP etc.

At the beginning of rising prices that started to take topographic point in 2nd one-fourth of 2008, deficit in reachings was reported and the inward touristry of UK fell by 5 % harmonizing to the Euromonitor International Figures. When the rising prices struck in 2009, it affected a batch of concern and touristry industry was one of those. Peoples populating in the UK preferred to pass their vacations domestically and the figure of tourers from abroad besides shown a diminution. The Euromonitor International Figures that were recorded in 2009 showed that there was an approx. 12 % diminution of people going abroad from the UK. The rising prices rate of the UK, which was last recorded in November 2012, was 2.70 % harmonizing to ONS. ( Appendix 4 )

In a study published by UKCES in 2012, it is mentioned that touristry histories for about 6 % of UK ‘s GDP and has given employment to about 2.5 million people. Each UK state has a touristry scheme that aims to ‘raise the aspiration of touristry over the following decennary ‘ ( Peoples 1st, 2010a ) .

Exchange rate and the fluctuations in currencies besides play an of import function in the disbursement forms of tourers. The comparing of lb sterling versus euro has contributed a batch in the Britons disbursement more when they travel to other European finishs and Experts have noticed that the euro being cheaper than lb sterling has made it cheaper for the Britons to go on vacations to European states ( Hall, 2012 ) . The entire UK touristry spend by sector can easy be seen in this image. ( Appendix 5 )


The manner of life of people and the cultural facets that chiefly comprises of population, growing, tendencies, callings, how safe the topographic point is where they are populating and being cautious about their wellness are by and large considered as societal factors. Tourists from other states may non cognize much about the traditions and imposts of the state they are sing that may turn out to be a job at times.

Some impacts of such societal factors mentioned in a study of Travel and Tourism by Ann Rowe, John Smith and Fiona Borein in 2002 suggests that it will be good for the local people every bit good as the tourers to acquire together and larn more about different life styles which can be good to both the parties as there is a room for betterment in the sectors of substructure, wellness and instruction, athleticss, traditions, heritage etc. , as London is chief hub of people for across the Earth.

In recent clip ‘s people of the UK and the tourers are concerned about their safety and when going to the UK the public violences of 2011 served as a subtraction for the touristry industry at that clip. Harmonizing to the Daily Mail UK, in India the editor of a magazine warned his followings in chirrup that they should avoid coming to the UK at all. Due to these public violences, many inquiries were raised on the safety and security processs for the approaching 2012 Olympics.

Technological Factor:

Technology plays an of import function in the development of any concern or industry and when a certain concern provides installations and are equipped with latest engineering it creates a better relation between them and the clients. Bookings tickets and on-line vacation engagements have truly excelled as the clip progressed. Harmonizing to ONS ( 2011 ) , wireless hot spots in the UK were accessed by about 4.9 million users and 77 per cent of families had internet entree.


If the UK wants to vie with the other celebrated tourer finishs across Europe and on the list, foremost of the few recommendations would be to cut down the visa application charges and limitations along with the APD and conveying them on the same degree as that of other European finishs because a household comprising of 4 members from India/China pays a brawny amount of ?612 as their Visa and APD charges when going to the UK, Tourism Alliance ( 2012 ) .

Tourism Alliance ( 2012 ) in their study show that when in 2009, Chinese visitants were granted visas to the UK, visitants grew by 39 % and the gross obtained from them increased by 155 % .

Another study by Tourism Alliance in which it is clearly mentioned that APD has already cost 23000 people their occupations in last seven old ages and if it continues to increase at this degree by 2017 it would hold resulted in ?1.1 billion loss and 6000 more occupations.

Second the high VAT that the UK charges to its tourers, Tourism Alliance in 2011 predicted that if VAT on touristry is reduced to and brought in alliance with that of European states, the UK touristry could gain about ?1.3 billion per annum that is 7 % addition and since this study looks at the approaching three old ages the short term losingss in VAT grosss would be recovered in short span of three old ages.


There has to be a better investing and selling programs, events like the Olympics 2012, pull offing them successfully so that tourer get value for the money they paid, about which a study by Deloitte and Forecasting organisation Oxford Economics has predicted that touristry sector is likely to turn by 3.5 % per annum between 2010 and 2020. Together all the regulating organic structures and bureaus should work in coaction and every one of them can play their portion in doing the UK a better topographic point to see and research.

Annotated Bibliography

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Deloitte ( 2010 ) . The Economic Contribution of the Visitor Economy: United kingdom and the Nations. [ Online ] 4-47. Available from: hypertext transfer protocol: // % 20case % 20for % 20the % 20Visitor % 20Economy % 20- % 20Phase % 202 % 20- % 2026 % 20July % 202010 % 20- % 20FINAL_tcm29-14561.pdf [ Accessed 22 December 2012 ] .

Euro Monitor International ( 2012 ) Travel and Tourism in the UK. [ Online ] . Available from: hypertext transfer protocol: // [ Accessed 23 December 2012 ] .

Eurostat ( 2012 ) Tourism Trends. [ Online ] . Available from: hypertext transfer protocol: // [ Accessed 23 December 2012 ] .

Eye for Travel ( 2012 ) Tough Times: The Top Five Challenges Confronting UK Travel. [ Online ] . Available from: hypertext transfer protocol: // [ Accessed 23 December 2012 ] .

Hall, J. ( 23 Aug 2012 ) Cheap ‘Staycations ‘ Cost More than Foreign Holidays. The Telegraph. [ Online ] Available from: hypertext transfer protocol: // [ Accessed 20 December 2012 ] .

Mathias, P. ( 2001 ) . The First Industrial State: the Economic History of Britain, 1700-1914. London: Routledge

ONS ( 2011 ) . Internet Access-Households and Individuals, 2011. [ Online ] . 1-5. Available from: hypertext transfer protocol: // [ Accessed 21 December 2012 ] .

Peoples 1st ( 2010a ) . State of the Nation Report 2010. Uxbridge: Peoples 1st. [ Online ] . Available from: hypertext transfer protocol: // [ Accessed 19 December 2012 ] .

Payne, E. ( 9 Aug 2011 ) Fears for London Tourism and the Olympic Games after another Night of Intense Rioting. Daily Mail. [ Online ] Available from: hypertext transfer protocol: // [ Accessed 21 December 2012 ] .

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Wikipedia. ( 2012 ) . Tourism in the United Kingdom. [ Online ] . Available from: hypertext transfer protocol: // [ Accessed 21 December 2012 ] .

Williams, M. , Luanaigh, A.N. & A ; Garrett, R. ( 2012 ) Sector Skills Insights: Tourism. UKCES. [ Online ] 1-30. Available from: hypertext transfer protocol: // [ Accessed 23 December 2012 ] .


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