Walpole, in partnership with our fellow luxury associations across Europe in the European Cultural & Creative Industries Alliance (ECCIA) - Comité Colbert in France; Altagamma in Italy; Spain’s Circulo Fortuny; Germany’s Meisterkreis, Sweden’s Gustaff III Kommitté, and with support from Forwardkeys, Global Blue and Virtuoso Travel - have worked with Bain & Co on a pan-European study, High-end Tourism – A Strong Driver For Europe, into the impact and value of the high-end visitor which will be published in Summer 2022.
The report allows us to quantify for the first time the value of high-end visitors over mass-tourism as well as motivations for travel, drivers of tourism and a view of high-end visitor spend when travelling. It gives us a comparative picture of the strengths of the key European destinations for high value visitors - not least the way the eco-system of culture, luxury brands and hospitality work together.
Inspired by the European level report, Walpole has produced its own, What It’s Worth: Enabling The Return Of The £30bn High-End Tourism Sector, in which we examine the key data points from the European study and take a deep-drive into the UK high-end tourism eco-system as well as opportunities for growth via policy and promotional recommendations.
We already know that Continental Europe including the UK, accounts for more than half of the international arrivals worldwide, making it the number one tourist destination globally. However, if you split tourism into two – mass and luxury – the report suggests that with the right support from government, the UK the world’s number one destination for luxury visitors.
Looking at the research, prior to the pandemic, the direct economic impact of tourism across Europe was between €575 – €725bn in 2019 with the highend segment accounting for 22% or €130-€170 in value terms. The largest tourism economies – France, Germany, Italy, Spain and United Kingdom – generate almost 70% of the overall economic value. High-end visitor spend across Europe is divided between accommodation (30%), culture, entertainment, dining and shopping (65%) and 5% on transport –cultural experiences are particularly important.
Compare this to the UK where the high-end visitor is worth a staggering 14 times more in terms of daily spend than the mass tourists. This increases to 20 times more on accommodation and 18 times more on culture, entertainment, shopping and dining. Around a third or £30bn in value terms of the UK’s overall £85bn domestic and international tourism market, can be attributed to luxury tourism. In other words, for every £3 spent by tourists, £1 is spent by the high-end. Of total high-end visitor spend in the UK, 53% is attributed to culture, entertainment and shopping and 30% to accommodation with dining at 14% and transport at 3%.
The positive economic spill over from this revenue is also high. For every £1 spent by a high-end visitor, £8 of value is generated in other industries spread across the UK, all of which demonstrates that the high-end visitor is economically important and a highly valuable group to nurture, as we build back our tourism industry post-Covid.
The report also underlines the strength and importance of the high-end tourism eco-system and the halo effects to other industries as it creates a virtuous circle with a knock-on effect across retail, hospitality, culture and art. All of which work together to create extra value for the economy, contributes to the creation of employment, the preservation of the historically important buildings and sites and drives the desirability of Great Britain as a destination enhancing the reputation of the UK.
Understanding who high-end visitors are, where they come from, their motivations for travel, and the key drivers enabling a visitor experience that meets their expectations is crucial to creating a suitable proposition whether marketing in advance of a stay or the on-the-ground experience. For instance, for the UK in particular, the US is a major source of inbound tourism, particularly at the high-end level.
High-end visitors value a variety of high-quality sites of interest and seek out cultural experiences in galleries, museums and art fairs. They travel around internationally relevant cultural, sporting and social events from Wimbledon to Goodwood and Glastonbury. The presence of high-end boutiques and luxury brands for shopping and a high concentration of gastronomic experiences is a key driver as are facilities related to tax-free shopping, a transport infrastructure that includes high-end travel options and a visa system that makes entering the UK simple. In recent years, the high safety level of a location has become an increasingly important attraction factor when choosing a destination.
When comparing pan-European data versus UK, it is clear that Britain has held the advantage (explored in our report) when competing for high-end visitor wallet-share. The figures achieved are without the support of a legislative framework that recognises the value of the luxury industry and high-end tourism.
We believe that, if we are to maintain and enhance our desirability and competitive-edge, policy makers must make changes to unlock the economic and reputational value of high-end tourism. The report outlines range of recommendations at both a policy and promotional level, that will enable the UK to capture the full potential of this high-spending group; from simplifying the visa regime for visitors from the GCC, to re-introducing a world-class tax-free shopping offer and extending Sunday trading hours. There is also an opportunity to re-consider how we market the UK to the world and how we can create connected experiences which see the ecosystem working together.
As we look back at the pandemic, it’s clear just how much of the luxury sector is fuelled by international visitors so as travel re-opens across the globe, now is the time to act. With the right support and by unlocking the uniqueness and distinction that governs the very ethos of luxury, we can secure our share of an incredibly valuable pie.
