Inbound Tourism

Mr. Mark Field (Cities of London and Westminster) (Con): I congratulate the hon. Member for City of York (Hugh Bayley) on securing this important debate. He told us about elements of the machinations by which he was able to acquire such an important 90-minute slot. I hope that he will forgive me if I focus most of my comments on tourism in my own constituency and the nearby area, which I believe the Minister knows extremely well. I believe that she still has a house in the Soho part of my constituency.

I thank the hon. Member for City of York for his interesting comments. It is often easy from the London perspective to think of our city being the capital not just of this country, but almost of the world, and not to appreciate the broad range of tourism opportunities that are available so close to his beloved city of York.

I am fortunate enough to represent a constituency that, as well as including the financial and political heart of our country, houses some of Britain’s most iconic buildings, many of its historical and cultural gems, and a selection of the country’s best shopping and entertainment hubs, some of which are perhaps slightly too lively for many residents of Soho. The Minister has never pestered me directly, but I am sure that she writes letters to herself, in her role as Minister with responsibility for such matters.

The list of attractions in my constituency is breathtaking: several royal palaces, including the one that we are in at present; three royal parks; several major galleries; Westminster abbey; St Paul’s cathedral; and all the joys of the west end, which include Trafalgar square, Chinatown, famed shopping streets and luxury hotels such as the Savoy and the Ritz—a true embarrassment of riches in many ways.

The vibrancy of the central London area, the sheer number of fantastic places to visit and the fact that anyone can feel at home walking through the streets of London ensure that our capital city draws visitors from around the globe. Unsurprisingly, London is the No. 1 destination for international travel, each year welcoming more overseas tourists than any other city in the world. In 2007 alone, 25 million overseas and domestic tourists flocked to the capital, and we have had two consecutive years of record spending by overseas visitors, bringing in a colossal £8.2 billion to the UK economy. The health of the tourism market in London, which is the gateway to the UK as a whole, is crucial to the wider UK tourism industry.

However, because tourism represents 10 per cent. of the capital’s gross domestic product, there is growing apprehension that any decline in the tourism sector as a result of the recession could hit London hard. Unfortunately, it is difficult to grasp the full picture on the number of people who visit the capital, as we have only UK-wide figures from the international passenger survey. However, the number of overseas residents visiting the UK in the three months from October to December 2008 was down 12 per cent. compared with the same period in 2007.

I should say that anecdotal evidence from my constituency is, thankfully, rather more mixed than that stark statistic might present. Indeed, at the end of January, I attended the Regent Street Association’s annual luncheon, expecting the retailers on that famous London thoroughfare to be rather gloomy about the economic situation. Not so. Shops along the street had been pleasantly surprised by their final-quarter 2008 performance, which was buoyed by a huge uplift in foreign visitor numbers owing to the weakening pound. In December 2008, sterling was, on average, 26 per cent. weaker against the US dollar and 20 per cent. weaker against the euro compared with 12 months previously.

I do not wish to be complacent, but it is right that I put on the record the context of London’s tourism trade, particularly the retail offering for high net worth individuals, because I have an appreciation of many other high streets across the capital city. I look to my hon. Friend the Member for Orpington (Mr. Horam), because I am sure that Orpington high street has had difficulties for some years, not just because of inbound tourism, but because of the emergence of the Lakeside and Bluewater out-of-town shopping centres.

Mr. John Horam (Orpington) (Con): I am grateful to my hon. Friend for taking the trouble to mention my constituency. In that context, the outer London scene, which he mentioned, has some iconic buildings. There are some wonderful buildings in central London in his constituency, but in outer London we have, for example, the home of Charles Darwin. It is the 200th anniversary of his birth this year, and the 150th anniversary of the publication of his great book, “On the Origin of Species,” so I thank the Minister for the Government’s efforts to make his home a world heritage site.

Mr. Field: I know London very well and love it very much, and not for nothing is the main road into Down called Single street. It is a rather small street, so I hope that not too many tourists will take their cars into Down from Orpington, otherwise there will be problems afoot, I suspect.

Amid all that, there is little doubt that 2009 will be a relatively tough year, so I am keen to know what the Minister will say about the contributions that she will hear from Members representing various parts of the UK. For a start, it is likely that corporate entertainment and international business travel will be pared back. There is an especial concern also about the capital’s exposure to the US market, which remains far and away the UK’s biggest source of visitors.

Visits from north America in 2008 were down 13 per cent. compared with 2007, and a sharp downturn in the US economy, rising unemployment there and the lowest recorded levels of US consumer confidence are likely, I fear, to ensure that the number of visits continues to fall. There is also concern about the exchange rate. There has been a depreciation during the past year, but the situation may change through 2009, and there could be a large reduction not just in visitor numbers, but in absolute spend.

The Minister will appreciate, and Members from all parts of the House will know, that we live in volatile times, so it is hard to tell whether more domestic visitors will in the coming months spend time in London and the UK, rather than going abroad. Preliminary research indicates that most UK residents regard their main summer holiday—normally abroad—as sacrosanct, in which case domestic visitors may choose to drop their breaks in London or, indeed, other parts of the UK to preserve what they regard as their main holiday.

Visit London—the official visitor organisation for the capital, and part-funded by the Department for Culture, Media and Sport, the Mayor of London, the London Development Agency and London’s councils—has been undertaking some quite aggressive marketing campaigns to promote the capital internationally. In December, a four-month drive was launched to stimulate visits to London. At a cost of £3.25 million, the campaign is expected to deliver £70 million in economic benefit to the capital. Money assigned to promoting tourism traditionally provides good value, and tourism is one of the industries in which a relatively modest investment can provide solid economic returns in a short period. As part of the Mayor’s recovery plan, alongside that of central Government, Visit London has tried to capitalise on the opportunity of the favourable exchange rate as a valuable promotional tool, and, if there is any new Government funding, it should be concentrated on responsive campaigns. I hope that the Minister will bear that in mind.

In the longer term, Visit London looks towards the London Olympics, which are now only three and a half years away, of the summer of 2012. Surprisingly, when one considers that the Government sold the games to the public as a way to draw money into the capital from international visitors, there seem to be no specific plans to provide funds to help to realise the tourism benefits of the games. It is estimated that such benefits could be worth £2 billion, with the games representing a once-in-a-lifetime opportunity to market and promote London and the UK to emerging markets, such as China and India.

There is also great enthusiasm among those in the tourism sector for a re-examination of immigration arrangements. There have been recent increases in visa fees, and some visitors are aggravated by having to purchase a separate visa to the Schengen area. Visit London also believes that a capital investment in an international convention centre, which has been in the offing for many years, would create jobs and benefit London’s economy in the long term, particularly as the organisation believes that, on tourism, one of London’s saving graces could be its hosting of many conferences, fixed-term annual congresses and sporting events.

In an economic climate that is undoubtedly worsening rapidly, it is essential that we continue robustly to promote our capital city. London drives the UK’s visitor economy to a large extent, and, where it succeeds in attracting visitors, the rest of the country will, I hope, benefit. But, while the picture is mixed in the capital, with some areas of the industry upbeat about their prospects, there is no room for complacency. In this sector, over many others, a little investment can go a long way, and we should play on London’s myriad advantages as a fantastic, diverse and exciting city to keep it as the jewel in the crown of a thriving British tourism industry.