2024 inbound tourism forecast

Summary

• VisitBritain forecasts 38.7 million inbound visits and £32.5 billion spend in 2024, 95% and 114% of the 2019 levels respectively, although spend would be 92% of 2019 in real terms i.e. when adjusting for inflation. Compared to 2023, this would represent growth of 2% in visits and 5% in nominal spend (2% in real spend).
• This follows final results of 38.0 million visits and £31.1 billion spend in 2023, 93% and 109% of 2019 levels respectively (spending 90% in real terms). 
• This is a downgrade on the previous forecast, due to the slower than expected numbers for late 2023 and indications of a similar start to 2024. The previous forecast was for 39.5 million visits and £34.1 billion spend, 97% and 120% respectively of the 2019 result.

Recent patterns: The recovery of inbound visits hit a plateau in 2023 according to official data from the International Passenger Survey. Visits were 92% of 2019 levels in the first quarter of the calendar year, 96% in the second quarter, but then back to 92% in each of the last two quarters. In the final quarter of 2023 visits were actually below the levels of the same period in 2022. The recovery in the value of inbound visitor spending slowed down more markedly as the year progressed. Spending was 17% up on 2019 in nominal terms in Q1, 15% in Q2, and 10% in Q3; but spending was 2% down on 2019 and 4% down on 2022 in Q4 in nominal terms and well behind in real terms. 

No official inbound statistics have been released by the ONS for 2024 at time of writing, as monthly data has been temporarily paused to make data improvements. However, flight bookings data from Forward Keys for arrivals to date and those in the near term future suggests that passenger trends are similar in the first half of of 2024 to those seen in the second half of 2023.

Flight bookings data for August onwards is currently looking strong. However, bookings maturity is low and the consistent trend has been for longer lead times than pre-COVID, so we would expect numbers to ease down. However, with global economic conditions better than forecast a few months ago and interest rates in many countries likely to fall, we anticipate a renewed recovery in inbound tourism in the second half of 2024 consistent with a return to 2019 levels around the end of the year or early 2025.  

Markets and journey purposes: European inbound tourism to the UK recovered to 91% of 2019 levels in 2023 in volume terms and this is forecast to pick up slightly to 92% in 2024. Numbers in late 2023 were not strong and we expect this pattern to continue in early 2024 before a pickup from the summer. The 2024 forecast is for 25.1 million visits and £13.9 billion spending. Long haul markets had recovered to 97% of 2019 visits levels in 2023 in aggregate and full recovery to 100% is forecast for 2024; this equates to 13.5 million visits and £18.6 billion spending. While this overall forecast is for a more rapid recovery to pre-COVID levels than Europe in the aggregate, there is huge variation within this picture. While we have not forecast individual market level numbers, visits from North America were 14% up on 2019 in 2023 whereas from East Asia were much slower, although are trending upwards. Read the latest market level data from the International Passenger Survey. 

Different journey purposes have also recovered at different rates. Comparing 2023 to 2019, holiday visits were down 6%. Visits to friends or relatives had surpassed 2019 numbers by 3%; these visitors usually stay longer but spend less than holiday visitors. Business visits are still down 25%, although higher-spending MICE visitors are recovering faster than more routine business trips.

Visitor spending: In nominal terms, spend has been setting records, although not in real terms. Spend per visit has been almost tracking inflation; therefore the total value of spend has been almost tracking the volume of visits in real terms i.e. adjusting for inflation. In 2023 spend per visit was 18% up on 2019 in nominal terms, but the price level according to the Consumer Price Index was 21% higher than in 2019, giving a real-terms decline of 3%. This was dragged down by a weak end to the year. Initially in the recovery, length of stay was much higher than pre-COVID but spend per night was lower, which was driven partly by VFR (visits to friends or relatives) recovering fastest. Length of stay still remains somewhat elevated; it was 9% up on 2019 in 2023. In recent quarters, however, European visitors are now easing towards a more normal trip pattern; we are expecting a similar recovery path for long haul markets. Taken together, these patterns suggest that overall spending is likely to track close to visits in real terms, i.e. the spend outlook is approximately the visits trend plus inflation. Competing effects are broadly balancing each other out. The model assumes that spend per visit will gradually transition from recent patterns to an indexation of 2019 plus inflation for each of Europe and long haul. 

Economic drivers: Global consumer spending slowed in 2023, especially in Europe. With consumers still feeling squeezed from global cost of living pressures, this is likely one of the biggest factors why visits and real-terms spending have not yet recovered to 2019 levels. With interest rates expected to fall later in 2024, the consumer financial landscape could brighten and encourage growth in international tourism as the year progresses. The forecast assumes that the consumer outlook is moderately accommodating in the second half of the year although not so dramatically as to trigger a significant additional boom in consumer spending.

Assumptions: It is assumed that COVID will not present fresh challenges to international travel and that restrictions will not be re-imposed, and that markets where travel is currently slow will continue to recover. It is also assumed that there will be no major disruptive global or UK events that will significantly affect inbound tourism. The forecast assumes that from summer 2024, visits will gradually return to 2019 volume levels by early 2025. This is premised on the assumption that there are no unforeseen shocks that will surprise on either the upside or downside.

We will publish a revised forecast for 2024 and a forecast for 2025 in December or January.