Tourism has been recognised by countries as being of great economic and social significance. Tourism involves an influx of individuals beyond their usual work areas and home to destinations. The tasks carried out by establishments during their stay in those places are intended to meet the needs of the customer (Song et al., 2018). Luxury is the act of travelling for fun. Until recently, only a small number of people had the time and resources to travel. Rising recreation, higher wages and dramatically increased accessibility have contributed to encouraging more individuals to engage in travel. This report will analyse the importance of tourism on the business environment of London and the role of its stakeholders. The economic dimension of tourism and its effect on employment will also be studied. The impact of globalisation and its future prospects will be analysed.
A set of reasonably standard parameters can be used to evaluate both the environmental implications created by tourism growth; to assess effects on the economy across capital inflows that either reach or leave a domestic, regional or specific tourism industry; to compare economic costs through tax revenues or the volume of overt and covert types of job tourism can initiate and affect the environment with decreases in wildlife species, deforestation patterns, or physiological problems to protected areas. The UK economy gains the position of the world’s fifth-largest economy. The financial crisis of 2008 put the economy in a difficult situation; the government, therefore, took the required measures to stimulate economic growth. As of September 2019, the inflation is 1.7 percent. In November 2017, it rose to 3.1 percent (Brelik, 2018). It is worth remembering that a 2 percent inflation target has been set by the Bank of England. In November 2017, it grew its main rate of interest. From 0.25 per cent to 0.5 per cent, the rate has increased (Cakmak et al., 2019).
There is unlikely to be another rapid rise, but many experts agree that the era of low-interest rates is over. London being the capital enjoys the benefit of being an economically strong city which helps in flourishing tourism. The UK has a wide demand for consumers. The UK population was 66.4million in 2018, as per the data published by the Office for National Statistics in August 2019 (Czaika and Neumayer, 2017). Births appear to outweigh deaths and it is projected that by 2039 the population will exceed 74 million. The number of the young population is also increasing as the number of foreign students are on the rise. With a low unemployment rate, tourism gets benefits in the city of London. Tourism in London has helped in the development of socio-economic conditions of people of London
Some of the key stakeholders of tourism and their roles are as follows:
Government: In the growth of tourism, the government plays a significant role. At the state level, the government schedules tourist experiences. Planning at the national level includes the creation and implementation of effective policies. The responsibilities of the UK government include, but are not limited to, the construction and maintenance of infrastructures such as highways, railways and ports; the promotion of domestic and regional tourist places and maintaining tourist comfort and protection (Liu and Dunford, 2016).
Tourism establishments: In tourism growth, service providers and businesses perform various functions. For example, from one location to another, flights, ships, and taxis transport visitors, cafes offer them food and beverages and hotels provide lodging. This category also includes travel agents, tour companies, and visitor information centres.
Tourists: Perhaps the most significant stakeholders are tourists, particularly business travellers, and enthusiasts to tourist destinations. People visit attractions; spend loads of money; and, if their program is successful, can endorse the destinations by mass media and social media. As stated by Waise et al. (2017), vacationers may not visit the places later but might spread negative feedback if the impression is not favourable.
Local people: Also, local communities are very significant in the growth of tourism. They may have genuine grievances and may hinder any growth of tourism. Therefore, where applicable, they ought to be engaged in the decision-making process. With their diverse beliefs and traditions, local people can add significance to any tourist hotspot (Bianchi, 2018). In several different ways, visitors can also stand to gain from local people.
Employees and Professionals: In tourism growth, tourism workers, practitioners and specialists also play a vital role. Almost 3.8 million jobs are projected to be funded by tourism that is around 11 percent of the total volume of UK workers by 2025 (Rogerson and Rogerson, 2019). These statistics show how important workers and specialists in tourism are. Restaurants, cafes, airlines, taxis, railways, and others will definitely fail if an insufficient number of workers are employed, or if there is a lack of eligible people on the market.
Other Stakeholders: Any other stakeholders should be considered by tourism planners. For example, a number of roles in tourism growth are played by organisations involved in funding tourism ventures, trade unions of workers and practitioners working in hospitality, tourism awareness centres and other tourism specific organisations.
In London’s economy, tourism plays a critical role. The industry employs 750000 people, one in seven of the work in the nation, and provides for 12 percent of London’s GDP (Maxim, 2019). The less positive outcomes are equally significant as tourists add to making London such a vibrant and accessible community. Many of the millions who reach the city every year become supporters, returning as tourists or studying, attending an event or meeting, working or living. At a remarkable pace, the industry is rising too. 2016 witnessed a historical number of international tourists to London, fuelled by an international visitor boom and intense competition from developing markets: there were 32 million nighttime domestic and overseas trips, a rise of 18 per cent since 2011 (Cooper and Alderman, 2020). And from weekend visits in 2016, £15 billion was produced, a rise of 26 per cent since 2017. Sector’s socioeconomic opportunities are being exchanged across London.
Enhanced transport systems, such as night Tubes affordable accommodation and incentives, allow tourists, both within and outside of operation and around the day, to enjoy the outer areas of the city. 9 percent of national GDP is generated by the UK tourism industry, contributing £ 127 billion in gross value added to the government (Su et al., 2018). The tourism sector in London plays an essential part: the city has long been a bridge to the rest of the United Kingdom, boasting particular amenities, landmarks and archaeological places as the key attractions. Overnight stays elsewhere around the world are now being linked to a growing number of London-bound tourists. Foreign holiday tourists make up to 64 percent longer in London than those who visit a single UK destination when combining a trip to London with another UK venue. In the economies of UK countries, these tourists spend about £641 million a year (Stors and Kagermeier, 2017).
In addition to generating jobs in the service sector, tourism also increases employment in the primary and secondary sectors of the economy. This is known as the multiplier effect, and that is how much money being spent by a traveller condenses through the economic development of a country in its basic form. Money invested in a hotel helps generate employment directly in the hotel, but it also ultimately generates employment somewhere in the market (Paulauskaite et al., 2017). The hotel has to buy local produce farmers, who may expend some of the income on feedstock or clothing. As visitors also purchase memorabilia, the appetite for local goods increases, which enhances secondary jobs. The multiplier impact persists until the money finally ‘leaks’ by acquisitions from the market-the buying of goods from other nations.
The London tourism sector provided a £20.2 billion gross value-added boost to UK GDP, or 12 percent of UK GDP, in 2015, including primary, indirect, and induced impacts (Moreno-Gil and Coca-Stefaniak, 2020). Due to the extreme multiplier effect of the London tourism sector, each £100 of national income produced by the London tourism industry itself is sponsored anywhere in the market by another £130 gross value-added investment. This consists of a £59 gross value-added contribution to the nation funded by the purchases of goods and services from suppliers who are based in the UK (Bianchi and de Man, 2020). Across the different economic impact networks, 386,000 workers were funded by the London tourism market or 1.2% of all UK employment in 2015. The workforce multiplier impact of the tourism sector ensures that for every 100 people employed by the London tourism sector, the sector funded additional jobs somewhere in the economy by buying suppliers’ contributions of goods and services. The multiplier effect plays a vital role in the development of the economy of London. Tourism in London has a direct impact on the secondary and tertiary economies. The increase in tourism in the city will help in the development of the other sectors also. For example during the London Olympics, the hotel industry was not alone in earning and generating revenue, the companies working in the food and beverages industries were also benefited.
As a socio-economic activity, tourism, which affects a variety of industries, behaves as both a catalyst for economic growth and employment generation. Thus, as a practice on the revenue side, tourism can be defined to tourist behaviours and their involvement in the provision of goods and services. Tourism can also be interpreted from the supplier side of the platform and can then be described as a collection of creative pursuits that cater primarily to visitors. As such, tourism is an effective contributor to job generation and, for this factor, economies are engaged in its growth. Statistics will explain the relation of tourism companies to job development and evaluate the influence of public policy and capital consumption on the employment generation prospects of practices that are detrimental to tourism or the tourism industry (Gossling and Michael Hall, 2019). Tourism creates opportunities for investors and many micro and small scale businesses, whether in the direct or indirect sector, in the course of catering to a mixed desire for a wide range of tourists. Global tourist companies are focused on hospitality and transport operations. They produce a substantial percentage of overall employment, albeit few in size. Most workers are hired from the local job market.
The tourism employment market is competitive in nature, i.e. high attrition of labour across companies, a wide variety of levels and procedures of wages, seasonality, etc. There is traditionally intense competition in emerging regions for tourism jobs among a huge, mostly very young and uneducated, population. As a labour-intensive industry, tourism creates job opportunities for people trying to enter the labour market or having difficulty looking for work elsewhere. The emphasis on jobs in the tourism industry is also strengthened by the fact that, despite the rising global and regional competition, market volatility and shifts in customer demand, the travel industry has grown into a commercial market. This demands further focus, not only on the quality of goods and services but also on the level of human capital, one of the travel industry’s main assets. However, despite the fact that the employment capacity of tourism has long been understood, work in the tourism industry has so far been one of the least explored aspects of tourism. Only a few governments have completely developed a special set of statistical processes and indirect implementations for the calculation and analysis of a plethora of employment aspects required for the development, implementation and monitoring of successful tourism labour market policies and behaviour in the tourism industry.
By many ways, tourism can be empowered: holidays, company, visits to family members and friends, events, processions, etc. Most research, however, considers the factors that influence inbound tourism that are only driven by weekends, totally ignoring an outstanding aspect of tourism. The variables that have led to tourism demand and development in London are as follows:
Population: It is assumed that the amount of international tourism from a given origin depends on the populace of the country, with a rise in population causing an increase in order. By changing the response variable to be per capita, the influence of the populace on the tourists demand function can be analysed.
Revenue or Investment: A major dependent variable is the type of income of visitors from the home country if the tourist arrival demand is measured or the spending of tourists at the place if the outbound sustainable tourism is analysed. Disposable revenue, capital spending or government revenue may be represented. This variable is supposed to have a favourable effect on tourism revenue, whether it is earnings or expenses. The bigger the income of visitors, the more they can spend on tourism (Scheyvens and Biddulph, 2018)
Tastes: Market preferences are expected to have a relevant impact on the demand for tourism on the basis of tourist taste. This is often seen as a linear relationship due to a shortage of sufficient data, suggesting that tastes change at a constant pace, either in preference or against the place. However, this is often very hard to justify and interpret.
Lagged variable dependent: In tourism forecasting models, tourist preferences and tendency durability are integrated by adding the explanatory variables lagged by one timeframe. When tourists have been to and enjoyed a place, in the future, they will revisit that location. It is also assumed to have a positive effect if this variable was included in the model.
One-off events: In order to account for the effect of exceptional events, dummy variables are also used in tourism demand parameters. Good events such as the staging of international events like the Olympic Games, negative events such as terrorist attacks or political unrest. Awareness of the influence of these incidents on the market for tourism is a vital first step in assessing the impact on the entire ecosystem.
Globalisation will play an important role in the development of tourism in London. In the next 5 years the tourism industry is set to transform in a much wider manner. Especially important are the advancements made in travel that have facilitated global integration. Modern planes, cruise ships, railways and other forms of transport make it possible for individuals to travel easily and relatively inexpensively. By designing a plane capable of travelling “long-haul” journeys with a greater passenger load, aircraft like the Boeing 787 Dreamliner have opened up new routes.
Quick rail, road networks, and even rental programmes for city bikes allow individuals to move, visit, and discover the world. Such improvements have encouraged more individuals to travel more frequently in less time. A greater understanding of locations and the variety of outdoor activities, places, and traditions to visit around the country is another effect of globalisation on tourism (Cheng and Edwards, 2019). Obviously, creating a destination’s awareness is a crucial first step in promoting a destination, and this is accomplished through travel shows, movies, blogs, and other means of communication.
Economic driver: The world economy’s centre point is moving from west to east and from north to south. New companies and alternative sources of innovation are being generated by rapid income gains within developing nations. This growth in trade is being driven by newly developing countries, especially China and India. Financial innovations and new sources of competitiveness would be generated by wages growth within developing countries. As industrialised economies absorb developing economies into their value chain to succeed in the current competitive world, global supply chains are able to intensify.
Technological drivers: It is likely that the globalising economy and technological change demand a more professionally qualified workforce. The increasing two-way flow of trained employees and the increasing size of the internet-literate, information-oriented employees in some developing economies, will result in the movement of employees from between the developing and the developed world. The spread of new technology is fuelled by governments and attempts by multinational companies to diversify their high-tech operations.
Social drivers: Modern life continues to be influenced by enhancing global communication, further decreasing the limits of physical borders and expanding the global reach of social networks. With consequences for social society and human society, the rate of social change and development worldwide has increased sharply. This social change, along with greater recognition of this connectivity worldwide, is connected to growing communication between people and countries worldwide.
Political drivers: In emerging societies, there is continuous pressure on the government for better living conditions, with an increasing global middle class generating a cycle of rising ambitions. In several emerging and developing economies, the massive growth of the corporate companies, along with redistributive policies, promotes economic development by creating competitive demands for more effective use of resources.
Demographic drivers: In most social structures, significant demographic changes have profound consequences. The associated areas of rapid urbanization and age structure change, powered by differential rates of productivity and access to healthcare, are key determinants. A high level of public health has led to improved longevity in developing countries. The demographic in advanced nations is ageing, but in developing economies it is younger (Maxim, 2019). The growing world workforce is ageing with rising longevity, particularly in rapidly expanding populations. A global trend toward urbanisation has been created by economic growth in the wake of development. About 60 percent of the global population will live in cities by 2025. The number of very large cities, with a megacity of more than 10 million inhabitants, is expected to rise to about 30 by 2025.
The report studied London tourism and its effect on the business environment. The role of different stakeholders was also studied. It was found that tourism in London proves to have a multiplier effect on the economy by generating resources and jobs to different other sectors. Tourism in London is expected to grow substantially in the next five years with different drivers playing a part which supports the tourism and movement of people from one part of the world to another.
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