Post-pandemic international visitors to London
Last Summer there was a significant recovery in international tourism after it nearly fell to nothing during the pandemic. This supplement reports on what is driving those trends, and how they differ from pre-pandemic trends.
GLA Economics also publishes tourism forecasts for both domestic and international visitors. This analysis will feed into the development of the next set of forecasts.
This analysis uses data from the Office for National Statistics (ONS) International Passenger Survey. Data collection ceased during 2020, and has been re-introduced in stages. There was no interviewing at Dover until October 2021, and none at the Eurotunnel until July 2022 – interviews with Eurostar passengers re-started in 2021. This means that only the Q3 2022 data provides a complete picture of international tourism. To provide an indication of the potential importance of these factors, in 2019 all tunnel crossings on visits to London accounted for 22% of all visits from Europe, and sea crossings (which will include crossings to other ports from elsewhere in Europe, such as Ireland and Holland, as well as France) accounted for 9% of all visits. The small number of travellers in 2021 also had the consequence that the number of interviews were insufficient to provide some of the breakdowns available for earlier years and 2022.
Trends by market
Prior to the pandemic in 2019 there were 21.7 million visitors to London, who stayed 118.9 million nights, and spent £15.7 billion. Europeans accounted for 56% of stays, 44% of nights, and 38% of spend. The corresponding figures for North Americans are between 15% and 18% (Table A1). These are the two largest markets for visitors to London.
As well as significant seasonal variation in travel patterns there is also marked changes over time. Figure A1 takes account of seasonal variation by comparing visitor nights for a quarter compared with the same quarter in 2019 – this is the approach adopted throughout for analysis over time. Over the period 2002 to 2019 the numbers of visitor nights increased steadily, but this was not uniform across markets. For Europe, numbers rose before declining after 2013. For North America, visitor nights declined to 2009 before holding fairly steady, and picking up after 2014. The numbers declined markedly in 2018 and 2019.
Post-pandemic visitor nights from across the world picked up slightly in 2021 before falling back again. There has been a more sustained improvement in 2022 to around 85% of levels in 2019. Nights stayed by North American visitors has more than exceeded numbers in 2019, if still below numbers in 2017.
There is a similar picture for stays and spend (after inflation). In both cases activity in 2022 returned to around 80% of 2019 levels (for the corresponding quarter). Activity by North Americans for both stays and spend was higher than the highest levels recorded previously – the pound depreciated against major currencies over 2022, but it is not clear why London became relatively more attractive to North Americans.
Trends by purpose of visit
Pre-pandemic in 2019 around half of visits to London and associated spend was on holidays. Holidays accounted for 45% of nights away. Visiting friends and relatives (VFR) was the next most important purpose making up around a quarter of stays, although relatively more nights at 32%, and relatively less spend at 18%. Business trips were 18% of stays, but relatively fewer nights at 14%, and relatively higher spend at 23% (Table A2).
For these three main purposes of visit the general trend was of rising numbers pre-pandemic. Figure A2 reports this for stays as the trend is more discernible by this metric. In 2022 the recovery has been strongest for VFR exceeding 85% of its previous level globally by 2022 Q3, while holidays were a little under 80%, and business trips were two-thirds of where they previously were in 2019 (for the corresponding quarter).
VFR had more than returned to the previous number of nights in 2019, and spending was at 90% of its previous levels (in constant 2019 prices). Holiday nights had returned to just under 80% of their former 2019 level, and 80% of their former spend. Business nights had reached 65% of their former level, and 85% of spend.
An interpretation of these findings is that the comparatively strong recovery in VFR reflects a desire to catch up with family and friends after the pandemic, and that this might be more likely to be combined with a holiday so stays are longer, and spend is higher. Higher spend may be making use of savings built up during the pandemic. It is possible that this will be a one off effect once links have been re-established. The weaker recovery in business trips may reflect ongoing greater use of videoconferencing, and so may be a permanent effect.
Figure A3 repeats Figure A2 for the North American market. It shows that VFR and holidays reached their highest recorded levels in 2022, and that the weakest recovery was in business trips. For nights and spend all purposes of visit have more than recovered their 2019 levels.
For Europe, VFR and holidays had recovered by 2022 Q3 to 85% of their 2019 levels (in the corresponding quarter), while business trips were at 70% of their former level. Nights spent VFR were over 120% of their previous level while spend was at 80%. Nights and spend on holiday had reached around 80% of their former level, while for business trips nights were at 60% and spend was at 70%.
During 2022 there was a rapid recovery in the international travel market led by North Americans and in visits to friends and relatives. There is also evidence that spend per visit and per night has been higher than previously, even after adjusting for inflation. Some of this may be temporary as people re-connect after the pandemic, and use savings built up during this time. Business trips have been the slowest to recover, and this may be a permanent phenomenon, perhaps reflecting greater use of videoconferencing facilities.