Why the UK risks missing out on an economic boost unless travel opens

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The UK is set to miss out on billions of pounds of Heathrow passenger spend if its travel ‘green list’ is not extended. New research from the CEBR (Centre for Economics and Business Research, a leading economic forecasting and analysis consultancy) reveals that business and leisure passengers arriving at Heathrow alone spend over £16 billion pounds across the country. This passenger spend is vital, not only for the aviation industry, but to sustain jobs at thousands of businesses, from boutiques on Bond Street to distilleries in Dundee.

American visitors travelling through Heathrow are the largest source of inbound tourism revenue for the entire economy, with these passengers accounting for £3.74 billion – nearly a quarter (23%) of total spend. Prior to the pandemic, the USA was the top market for passenger traffic, with London Heathrow (LHR) to New York JFK being one of the world’s most lucrative routes, with more than 21 million passengers travelling from LHR to JFK in 2019. This highlights the urgent need to restore the UK’s transatlantic routes – by adding the USA to the green list at the earliest opportunity. These visitors support towns and cities across the UK, with total spend from US passengers contributing over £700m to the Scottish economy alone, according to VisitBritain, the official tourism website of Great Britain.

However, there’s a risk that these US visitors could go elsewhere. Italy has opened its doors to fully vaccinated American travellers, and France is preparing to follow suit. If EU countries continue to move more quickly and efficiently than the UK to restore their US links, then the UK could end up giving these economic opportunities away to the EU, just as the Government is supposed to be laying the groundwork for its Global Britain ambitions.

Since the initial restart of international travel on 17 May, rapid progress has been made with the global vaccine rollout, especially in the USA, where the vaccination rate is fast catching up to the UK’s rate. This progress, alongside testing and the Government’s own risk-based controls, allows for links to be safely restored to more of the UK’s low-risk key trading partners, unleashing the huge economic contribution of these visitors, while protecting the gains made in the fight against this virus.

The CEBR research also indicates that expenditure by passengers travelling through Heathrow is set to grow to £18.1bn a year by the middle of the decade, if international air travel resumes this summer. But if conditions prevent that and visitor numbers grow more slowly, expenditure could fall by more than 18% by 2025, to £13.6bn.

This news comes as Heathrow is working with the UK Government to launch a new dedicated red list arrivals facility, creating more capacity for arrivals from an expanded green list. At first, the dedicated facility will be in Terminal 3 and launch on 1st June, before it is moved to Terminal 4.

Heathrow’s CEO, John Holland-Kaye, stated, “This research shows just how many businesses across the UK are losing out because of the Government’s restrictions on access to overseas visitors and markets. The Government has the tools to protect both public health and the economy and Ministers must unlock more low-risk destinations across Europe, as well as the US.”

Here are two examples of how business would benefit from the UK-US air travel corridor:

Jace Tyrrell, chief executive of New West End Company, a business voice for London’s West End, representing the world’s largest retail destination, including Bond Street, Oxford Street and Regent Street: “The streets of London are usually bustling with tourists at this time of year as they fly in not just to visit our world-famous landmarks, but to spend money in our shops, theatres, hotels and restaurants. Many of these businesses have lost out enormously in the last 15 months, impacting livelihoods across the capital, so a return of visitors this summer from overseas would be hugely welcome. We urge the Government to do all it can to enable their safe return.”

The Lindores Abbey Distillery in Newburgh, Fife

Andrew McKenzie Smith, Founder of Lindores Abbey Distillery, a whisky distillery in Newburgh, Scotland: “Distilleries in Scotland are renowned across the world. It’s why tourists – especially from the USA – have always flown in in their droves to see our craftsmen and women in action, bringing millions of pounds with them, which helps support local workers, businesses and communities. However, without overseas travel, this vital source of revenue has been lost for the last year to the detriment of these very same people. It’s not just airports and airlines counting on its resumption. It’s distillers across Fife and wider Scotland like ourselves.”

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