Staycation summer to cut UK’s £30.5bn ‘tourism trade deficit’ – with Wales, Devon, Cornwall and Cumbria set to benefit most

Press release from the Resolution Foundation

The boom in ‘staycation’ holidays this Summer will provide some much-needed respite for the UK’s travel and hospitality sectors, with areas such as West Wales, Devon, Cornwall and the Lake District benefitting most – but cities such as London and Manchester losing out – according to new research published today (Thursday) by the Resolution Foundation.

The Foundation’s report, Football went to Rome, holidays came home, finds that, compared to other European countries, the UK will benefit significantly from the switch to staycations, due to the comparatively high proportion of British people holiday who typically holiday abroad and spend far more doing so than overseas tourists spend in the UK.

To illustrate the winners and losers from the staycation trend, Resolution Foundation analysis shows that if all tourists across Europe replaced their foreign holidays with a holiday in their own country, annual spending on tourism in the UK would increase by one sixth to a total of £30.5 billion. That would be associated with 300,000 extra jobs in the hospitality industry (which has a total workforce of 1.7 million).

In contrast, holiday hotspots such as Greece and Spain have huge tourism trade surpluses and are expected to lose out most from the switch towards staycations.

The Foundation notes, however, that the UK’s staycation boom will not entirely close the £30.5 billion ‘tourism trade deficit’, with some still travelling abroad, and overall spending on holidays likely to fall.

The contrasting fortunes of the staycation rise across Europe are also playing out within the UK itself, where the main beneficiaries will be rural and coastal areas popular with domestic tourists.

The Foundation’s analysis shows that in Cumbria 85 per cent of the total nights spent in the region’s tourist accommodation were taken by British tourists before the pandemic. The situation is similar for Cornwall and the Isles of Scilly (where 83 per cent of nights spent in tourism accommodation came from UK-based tourists), Devon (78 per cent) and West Wales and the Valleys (79 per cent).

In contrast, cities such as London – where more than 90 per cent of the nights spent in the city’s tourist accommodation are usually taken by foreign tourists – and Manchester (71 per cent taken by foreign tourists) may see less of a boost from the staycation trend.

Overall, the staycation boom will provide vital relief for the UK’s travel and hospitality sectors, which have been at the heart of the Covid-19 economic crisis – with more than half of all travel agency, passenger travel and hotel sector employees still furloughed in May 2021.

This impact has also disproportionately hit younger workers, the Foundation says, due to the high numbers of under-25s typically employed in these sectors. Under-25s normally fill one-in-four tourism jobs, compared to one-in-ten jobs in the rest of the economy.

So while the anticipated impact of a smaller tourism trade deficit on the UK hospitality industry is something to celebrate this summer, the wider damage from the pandemic will outweigh it, and in some cases be with us long after the staycation summer has passed.

Nye Cominetti, Senior Economist at the Resolution Foundation, said:

“An expected boom in ‘staycation’ holidays will provide some much-needed relief for the UK’s hospitality industry this Summer, with areas such as West Wales, Devon, Cornwall and the Lake District set to do especially well from a rise in UK tourists choosing to explore their own country, rather than jet off abroad.

“But while another staycation summer will help to reduce the UK’s £30.5 billion trade tourism deficit, the hospitality sector – and the near two million workers employed in it – still face huge challenges going forward.

“Supporting the disproportionately young and low-paid workers who rely on the hospitality industry should remain a priority, especially when both the British summer – and the furlough scheme – ends.”