Tourism in London may not return to pre-pandemic levels until at least 2025, according to new analysis published by the Mayor of London.
Data predicts numbers of overnight stays and associated spending in the city may not fully recover until the middle of the decade.
Last year, the number of overnight stays made by tourists to the capital more than halved to 60.8 million with a spend of £3.8 billion, compared to 147.4 million overnight visits and spending of £18.8 billion in 2019.
The spread of the Omicron variant had a significant impact on pre-Christmas trading in the capital, with UK Hospitality reporting an up to 65% decrease in food and drink sales across London in late December compared with 2019.
The Mayor of London, Sadiq Khan, said: ‘The data I am releasing today really underlines just how devastating the drop in tourism in the capital has been – and will continue to be – for years to come.
‘It is obvious that many of London’s hospitality, retail, cultural and leisure businesses that rely heavily on tourists will be fighting for their survival for months to come, meaning many thousands of jobs are still at risk.
‘I have committed to doing everything I can to support London’s economic recovery now, and in the years to come. But the stark reality is that these sectors won’t be able to sustain pre-pandemic levels of employment until tourists return in significant numbers.
‘That’s why I am urging Government to take meaningful action to prevent widespread job losses and the financial hardship this will bring for Londoners, many of whom are already struggling to make ends meet.’
Mr Khan has urged the government to come forward with a comprehensive package of measures to protect the tourism and hospitality sectors in London, including full business rates relief, extension of the VAT relief scheme, and an increase in direct grant funding to support hospitality, night time and cultural venues.
Chief Executive of UK Hospitality, Kate Nicholls, commented: ‘Omicron came at the worst time for hospitality and tourism, just prior to the crucial festive period, the revenue from which, in normal times, sustains many businesses during the quiet months of the new year. Diminished cash reserves have had been further plundered to keep venues afloat. Omicron also knocked back consumer confidence, which was starting to firm up in the autumn, setting back recovery by months, and was compounded by the rise in the cost of living witnessed since the variant hit us.
‘London’s recovery will drive national recovery, so it’s vital to get domestic and tourist footfall up. However, that won’t happen immediately, so we need the Government to act, to secure the futures of businesses that will drive recovery in the capital and nationally. A retention of the 12.5% VAT rate would help to keep consumer prices low, rather than risk an additional inflationary pressure in April. Furthermore, business rates are higher in London than anywhere else, so an extension of rates relief would also go a long way to boosting the capital’s hospitality and tourism.’
In related news, the City of London Corporation has agreed to launch a new grant scheme to support Square Mile businesses that have been affected by restrictions introduced in response to the Covid-19 Omicron variant.
Photo by Philippe Oursel