Effect of Tourism on London’s Economy
Tourism is a booster of economic development because it brings numerous economic benefits. Cities and towns are usually the primary beneficiaries of tourism activities because of the attractions and other social amenities they harbor. Thorpe, Mathar, and Wardrop explain that London is one of the world’s famous destinations recording at least 18.8 million overnight visits. This figure is higher than those for many other cities around the globe. Yapne further claims that 4.9 million visitors from overseas arrived in London in 2013 between July and September. Most of the visiting population arrived in the global city to witness national celebrations comprising the famous Andy Murray Wimbledon trophy lifting as well as the historical birth of Prince George of Cambridge. The foreign visits to London increased by 12% between 2012 and 2013 with visitors bringing more than 3.37 billion by staying at the hotels, visiting attractions, stores and restaurants among many others. This essay asserts that tourism has an enormous positive impact on London's economy because it boosts trade, creates employment opportunities, and generates revenue for economic growth and development.
Tourism Impact on Trade
Tourism has a significant impact on London’s trading sector since it is a rich source of customers. Goeldner and Ritchie explain that tourism greatly affects the vibrant economy of tourist destinations because of both the foreign exchange and support for exportation industries. Advertising at the cities often visited by tourists such as London exposes commodities not only to the dwellers of the city but also to the entire world through the foreign visitors. The tourism sector further provides an excellent ground for a business establishment to tap the existing market. For instance, the hospitality industry encourages new business development and growth because visitors of the city require food, accommodation, and restaurant services.
The clothing industry and the agribusiness sector are among the largest beneficiaries of the lucrative tourism industry. According to Laffargue, businesses in other industries including those in both agriculture and the field of fashion considerably benefit - both directly and indirectly - from tourism. Visitors to the city buy clothes in famous fashion stores thus contributing to the development of the clothing industry. That notwithstanding, the agricultural sector in the United Kingdom provides supply of food to numerous restaurants, in which the tourists constitute a huge part of the consumers. Thus, tourism provides a market for the agricultural industry not only for London but England and the United Kingdom (UK) as a whole.
On the other hand, tourism has a negative impact on the locals because of prioritization of visitors at the expense of the residents. This problem hinders small business enterprises and low-income locals from directly enjoying tourism-related benefits. As a result, the government loses much of the money from the locals due to the high preference on foreign exchange. According to Fateme, tourism buys commodities and pays for labor services provided by employees from most of the thriving businesses. This business, together with the government provide international tourists with tremendous support and recognition since they are the largest source of funds for both the city and the country, something that sidelines the locals. With the heightened intention of serving international tourists, small business entities fail to thrive and compete their established rivals. Fateme reiterates that due to international tourism, established businesses have increased serving foreign visitors resulting in little or no attention to the locals. Although tourism hugely benefits the London’s economy, this is a threat because of limiting the locals from making an economic impact.
Tourism Impact on Employment
London is a hub of businesses, international and national events, and numerous centers of attraction. Some of the events include music festivals, sports, firework plays, arts and cultural festivals, international events, international extravaganzas for people from diverse backgrounds, and national celebrations. These events attract millions of people who not only travel but also stay overnight in different places such as campsites and hotels. The Tower Bridge, the National Gallery, and the renowned Tate Modern are just among the few world famous attractions that bring millions of people to London. The people require entertainment, accommodation, food, and movement. These services need an adequate workforce who can suffice the customers' demands. Consequently, many Londoners secure jobs to serve the visitors within the city in varying capacities.
The international London City and the UK as a whole provide many job opportunities attributed to tourism. Ibrahim states that the daily tourism industry in London generated 300,000 jobs in 2010 alone with the country generating 900,000 jobs, which makes tourism one of the greatest assets in the provision of employment. In 2013, the UK tourism industry generated more than 3.1 million jobs accounting for more than 9.6% of the total country employment. The city of London is a beneficiary because it gets a substantial number of jobs associated with tourism. The Mail Online asserts that tourism and its associated activities support at least 226,000 jobs, accounting for more than 5% of all the employment opportunities in the city. This indicates that tourism is a hub for jobs.
Additionally, labor productivity in London’s tourism sector is higher than in the other sectors of the economy both in the capital and the UK. The overall productivity is one-third more than that reported in the UK. Hospitality and manufacturing sectors are among the beneficiaries of tourism because they reap much from the influx of foreign visitors. Also, the demand for transport services including railway, air, water, and land transport is high because all the visitors need to move both within and outside the international city. Due to the growing nature of these and many other industries, human resources are a mandatory requirement, making this sector of the economy a source of employment.
Tourism Impact on Revenue
Tourism in London generates massive amounts of revenue for economic growth and development. Yapne says that 15 million foreign visits are registered in London, generating at least 6.6 billion in direct tourism activities, something that results in a general value added contribution of 34.3 billion nationally. Mazza explains that the leisure industry in London contributed at least 2.8 billion to the London’s economy and the revenue from sports increased tremendously from 1.12 billion to 1.66 billion just between 2013 and 2015. In England, direct tourism was responsible for the generation of more than 48.3 in GVA accounting for at least 4% of the country’s GDP. Upon considering other sectors associated with tourism such as tourism supply chains, both private and public travel, and investments, the industry generates a minimum of 106.0 billion in revenue. Therefore, the generation of revenue is one of the positive economic impacts of the London's tourism industry.
London is a hub of tourism activities registering a high number of international visitors who contribute to the economy in the form of job creation, trade, and revenue generation. Businesses thrive well in this region because the tourism industry is a source of customers for marketed products and services. Additionally, many employment opportunities are created because the capital requires an adequate workforce to meet the needs of tourists. That notwithstanding, revenue is generated from both direct and indirect tourism activities. This revenue develops the economy of London, England, and the UK as a whole.
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