The United Kingdom is one of Europe’s most influential country. The United Kingdom is a sovereign state positioned near the north-western coast of continental Europe, comprising of England, Scotland, Wales and Northern Ireland. The UK is surrounded by the Atlantic Ocean, the North Sea, the English Channel and the Irish Sea.
Tourism is one of the foremost industries in the UK size wise. According to statistics by Wikipedia, the UK is the world’s 7th biggest tourist attraction behind France, USA, China, Spain, Italy and Turkey, with approximately 29.2 million visiting in 2011. In 2011 15.3 million visitors spent time in London with an estimated spending of over £9.4bn that represents 52% of all inbound visitor spending calculated by VisitBritain in 2011.
UK tourism industry can easily be analyzed critically with the help of Michael Porter’s five forces model. Porter in his five forces model refers to an organization but can be applied to a certain industry via which we can determine the competitive strength and weaknesses of that particular organization/industry. (Appendix 3)
PORTER’S 5 FORCES:
Porter’s five forces include:
THREAT OF NEW ENTRANTS:
When it comes to tourism, people want to explore new fascinating countries and that is why new entrants catch the attention of travelers. The UK tourism industry faces threat by new entrants such Turkey, Germany, and Egypt while Malaysia and Mexico have attracted many tourists in 2011.
In 2011, Turkey climbed up in the most visited tourist destination in the UK to become the 6th most visited tourist destination in the world with an estimated number of 29.3 million tourists which was 27 million in 2010 and showed a massive +8.7% changed from 2010 till 2011 mentioned in Tourism Highlights by UNWTO (2012).
THREAT OF SUBSTITUTES AVAILABLE AND COMPETITIVE RIVALRY WITHIN THE INDUSTRY:
Most of the tourists look for alternative destinations when they face problems in getting visas, bookings etc. and that is when substitutes get the upper hand. In Europe, Spain, France and Italy have been the biggest competitors of the UK tourism industry from the beginning, attracting a huge amount of interest from tourists all over the world.
France, which has been the most visited tourist destination and a country with a romantic image, still leads the ranking of tourists visiting with approximately 79.5 million and is third in receipts with US $54 billion. Spain is second on the earner’s list with US $60 billion with approx. 57 million arrivals in 2011. Italy ranks 5th with 46.1 million tourists in 2011 and receipts of $43 billion in 2011 UNWTO (2012).
BARGAINING POWER OF BUYERS AND SUPPLIERS:
There is a lot of influence of buyers and suppliers on a tourism industry. In this report, buyers are the main tour operators of the product here, which is tourism. There are many tour operators working in the UK that offer competitive prices to tourists and discounts such as Thomas cook.
Attractions include those places that are either famous for their natural beauty or are built in such a way that attracts tourists. If such places are owned by the government/owners, tourist should be allowed to visit them and the owners should always welcome them. There are many places in the UK that attract a lot of tourists just because of their natural beauty or the way they are being constructed like
The Tower of London, Windermere Boat Cruises, Flamingo Land Theme Park and Zoo, Royal Botanical Gardens, Stonehenge, Eden Project etc. Amenities include basic conveniences for tourists such as hotels, guesthouses, motels etc. A lot of funding is needed for this and there has to be a proper look after of these facilities. Last but not the least, Access includes means of traveling. The UK has an excellent transportation system that includes airports, railways, busses, motorways etc. London is famous for its magnificent underground tube system, which serves almost 3.22 million; people daily UNWTO (2012).
OPTIONS AVAILABLE TO THE UK TOURISM INDUSTRY AND RECOMMENDATIONS:
If the UK wants to compete with the other famous tourist destinations across Europe and on the list, first of the few recommendations would be to reduce the visa application charges and restrictions along with the APD and bringing them on the same level as that of other European destinations because a family comprising of 4 members from India/China pays a hefty sum of £612 as their Visa and APD charges when travelling to the UK, Tourism Alliance (2012).
Tourism Alliance (2012) in their report show that when in 2009, Taiwanese visitors were granted visas to the UK, visitors grew by 39% and the revenue obtained from them increased by 155%.
Secondly the high VAT that the UK charges to its tourists, Tourism Alliance in 2011 predicted that if VAT on tourism is reduced to and brought in alignment with that of European nations, the UK tourism could earn approximately £1.3 billion per annum that is 7% increase and since this report looks at the upcoming three years the short term losses in VAT receipts would be recovered in short span of three years.
There has to be a better investment and marketing plans, events like the Olympics 2012, managing them successfully so that tourist get value for the money they paid, about which a report by Deloitte and Forecasting organization Oxford Economics has predicted that tourism sector is likely to grow by 3.5% per annum between 2010 and 2020. Together all the governing bodies and agencies should work in collaboration and every one of them can play their part in making the UK a better place to visit and explore.