Featured

Tourism is Booming, Every Country Needs a Better Strategy

If you were to go to cities such as: London, Tokyo, Beijing or New York, just to name a few, there would be something quite similar in all cases, that is, tourists. Every year there are millions of visits abroad by UK residents alone; in 2017 there were over 72 million visits abroad by UK residents who spent a massive £44.8 billion overseas.[1] Tourism is big business.

Looking at data from countries that attract large number of international tourists or that generate substantial revenue from tourism could shine some light on differing tourism strategies used by governments. In this context, a thorough analysis is conducted on seven countries: United Kingdom, France, Spain, United States, China, Germany and Italy. These countries are specifically selected as they have consistently ranked in top 10 based on both the number of international arrivals and the income derived from international tourism each year between 2005 and 2015. A closer look at the experiences of these countries is required to understand more about their tourism strategies and why some countries fail to attract high-spending international tourists.

France attracted 84.5 million tourists in 2015, this put France up as the number one tourist destination in the world. In 2nd place, the US managed to attract 77.5 million. Whereas the value of international tourism receipts in the US was $205.4 billion which meant each tourist spent an average of over $2500 on their holiday. In France, $44.9 billion was spent in the same year which equates to slightly over $500 being the average tourist’s spree (see Figure 1).[2] It must be asked how the United States made almost five times more income from tourism than France. There is a clear difference in the attitudes of these two types of holiday makers.


Figure 1 — Top Tourist Destinations
The most visited country is not the one that make the most money from tourism

figure-1


On June 11th 2015 Laurent Fabius, who was the Minister of Foreign Affairs and International Development, chaired the closing meeting to ‘Counseil de Promotion du Tourisme’. The purpose of the meeting was to figure out a plan to evoke their ambition of having 100 million international tourist arrivals in 2020. Evidently, France focuses on maximising the number of international tourists that visit them each year. But this alone does not answer the question of why tourists visiting France spend relatively less money.

France is a place of vast culture but most of all it had connotations of romance, it has, the city of love. France compliments this with activities that focus on food and drink. This romantic appeal that France markets undoubtedly increases the number of international tourists they attract. However, when holiday makers plan a romantic getaway, it is often nothing more than a romantic weekend. Shorter holidays mean less time for expenditure, so, although the number of international tourists that visit France is impressive their actual expenditure is not.

On the other hand, the United States boasts expenditure figures that dwarfs any of its competitors. In fact, the US has always been taking home large pots of tourism cash. Even ten years ago the United States was making more money from tourism annually than any other country does today. This is particularly impressive given the fact that the USA did not have a sustained international promotion campaign or a federal agency to market itself as a premier travel destination for more than a decade between the closing of the U.S. Travel & Tourism Administration in 1996 and the Travel Promotion Act of 2009 – which created ‘Brand USA’.[3]

How does the United States attract high-yield international tourists? Clearly it is not easy to answer this fundamental question. USA is a large country offering a diverse range of experiences to travellers. There are many iconic tourist destinations and globally-renowned cities in the country that are assiduously promoted in popular culture through Hollywood movies, TV shows and the like. Yet perhaps the amount of government spending on travel and tourism in the selected countries should be examined for a more quantitative analysis.

Overall spending on projects that promote tourism and travel by governments has recently been increasing in most countries, specifically in China. But it is a fact that the US government is able to afford a generous budget, especially in comparison to what other governments spend to promote their countries abroad (see Figure 2).


Figure 2  Government Spending On Travel And Tourism Service
Billion (USD) – 2015

figure-2


The United States indeed continues to top the international tourism receipts ranking, earning more than $200 billion as noted above. However, it is also important to see which governments spend their money on promotional activities in the most efficient way. To perform this analysis, the following graph is constructed based on each selected country’s government spending on tourism and travel and how much they earn from tourism. 

The results demonstrate that several European countries are able to successfully attract international travellers with their relatively limited national budgets. Spain and Italy have specifically managed to generate income from tourism more than 25 times of what they spend on tourism marketing, promotion and visitor-related infrastructure and the like.


Figure 3  Proportion of Income Derived From Tourism to Government Spending on Tourism & Travel

figure-3


Finally, it should be noted that an analysis on the average spend of international tourists in the selected countries is also conducted. Income per tourist arrival had substantially (around 20%) decreased in Italy and Germany between 2005 and 2015. Whereas three countries (USA, China & UK) increased their receipt value per tourist arrival in the same period.[4]

This discussion puts forward that some countries (e.g. USA & China) need to learn how to promote themselves more efficiently, whereas some others (e.g. France & Italy) must develop a solid understanding about different segments of international travellers and strategically target high-spending tourists. All countries should refine their tourism strategies and stop narrowly focusing on maximising the number of tourists they attract.

∗∗∗

[1] Office for National Statistics (17 August 2018) Travel trends: 2017 
[2] [4] World Tourism Organization (2017) Tourism Highlights 2017 Edition
[3] Task Force on Travel Competitiveness (2012) National Travel & Tourism Strategy

Spread the knowledge

About the author

Christopher Richards is currently studying Business Mathematics and Statistics at the London School of Economics. 

The views and opinions expressed in this article are those of the author(s).

More from the author

Publish articles

Inquisitive university students and recent graduates are welcome to collaborate with our team to produce insightful articles.

About the author

Christopher Richards is currently studying Business Mathematics and Statistics at the London School of Economics. 

The views and opinions expressed in this article are those of the author(s).

More from the author

Publish articles

Inquisitive university students and recent graduates are welcome to collaborate with our team to produce insightful articles.