The UK is predicted to be facing a domestic tourism boom in the coming years, with visits increasing at CAGR of 4.3% between 2021 and 2023, according to GlobalData. This has provided tourism companies with a prime opportunity to capitalise on new customers and improve the nation’s reputation for domestic tourism.

Capitalising and sustaining growth

The UK domestic tourism market has been presented with a huge opportunity due to the pandemic. The UK is a global front runner in terms of vaccine distribution and with plans to end lockdown by spring 2021, there will no doubt be pent-up demand for travel. However, some travel restrictions to other countries could potentially continue until 2022, meaning domestic tourism will continue to benefit.

Due to national lockdown restrictions in the UK, there is a renewed appetite for experiencing the outdoors, visiting friends and relatives and eating out. Travel and hospitality companies should take into consideration the increased need for shared experiences as travel resumes due to many consumers feeling isolated because of the pandemic. Value-added products will also be a key factor. Loyalty schemes, particularly for business travellers, free child tickets for trips, vouchers, and complementary guides could generate repeat visits for destinations and companies.

The rise in home shares and second home ownership in the UK has been well documented. Relatively solid performances in the pandemic by accommodation providers such as Booking Holdings, Airbnb, and Vrbo (Expedia) are encouraging for some sections of the industry. Taking into consideration the demand for VFR, alternative accommodation types enable larger groups of friends or families to stay together in one location. It is something destination marketers should take into consideration when constructing their campaigns once restrictions are lifted.

Generation Hashtag is the younger demographic that travel and tourism companies should capitalise on this cohort now. This demographic craves experience over substance and by providing more unique and immersive experiences, companies can attract new business. The use of influencers on social media platforms such as Instagram could have a profound effect.

Although the UK tourism sector has been battered by the pandemic, a projected sustained increase in domestic tourism provides a beacon of hope for many businesses. However, being proactive is key and companies must not rest on their laurels waiting for demand to return.

Contributing factors to the domestic tourism boom

The Covid-19 pandemic has resulted in widespread international travel restrictions and lockdowns, decimating UK demand for international trips. On a global scale, international travel is predicted to reach pre-Covid-19 levels by 2024, resulting in a higher demand for domestic tourism. According to a live GlobalData poll with 1,201 respondents (dated 3 February 2021), 52% of travellers will not travel internationally due to fear of contracting Covid-19, suggesting that the virus is still at the forefront the traveller’s mindset.

Financial circumstances have also changed for many individuals and families, meaning they have less disposable income to spend on international trips. In GlobalData’s Week 11 COVID-19 UK recovery survey (fieldwork undertaken 2-6 December 2020), 53% of respondents said they were either ‘quite’ or ‘extremely’ concerned with their current financial situation. A motivating influence for international travel was once the strength of the GBP, however, this is no longer the case with the currency’s value being similar to the EUR. Domestic tourism also offers lower transportation costs, with tourists being able to travel by car or rail. Travel duration is another factor, resulting in increased accessibility and convenience for shorter stays.

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