The UK's tourism industry is among the world's worst performing amid continued travel restrictions, data shows. PA
The UK's tourism industry is among the world's worst performing amid continued travel restrictions, data shows. PA
The UK's tourism industry is among the world's worst performing amid continued travel restrictions, data shows. PA
The UK's tourism industry is among the world's worst performing amid continued travel restrictions, data shows. PA

Travel rules drops UK among worst performing countries for tourism


Laura O'Callaghan
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The UK’s travel restrictions are having a more damaging impact on its tourism industry, compared with other nations, figures show.

Spending by international visitors to Britain is forecast to drop nearly 50 per cent this year from 2020, the London-based World Travel and Tourism Council (WTTC) said.

This is making the UK “one of the worst performing countries in the world”, the council said.

The damning assessment of how the rules are affecting the ailing sector comes after the UK government rolled back another set of measures earlier this week.

The country’s red list of nations off-limits for non-essential travel was reduced to seven and testing requirements for fully-vaccinated travellers arriving in the UK were scaled back.

Ministers also agreed to accept vaccine certificates from dozens of countries, opening up travel for millions of people.

The WTTC said that the travel and tourism industry’s contribution to the UK’s economy may rise year-on-year by about 32 per cent in 2021, which is broadly in line with the rest of the global average.

But it argued that partial recovery is being driven by the boom in domestic holidays, which is not enough to achieve a full economic recovery and save millions of jobs under threat.

The WTTC branded UK testing and quarantine policies “destructive”, saying the rules have caused the country to trail the US and China when it comes to a recovery in tourism.

The group said the US and China are “set to see a rise in inbound international travel spending this year” but offered a more dismal outlook for Britain.

Julia Simpson, WTTC's president and chief executive, said travellers are deterred by expensive PCR tests, which have to be taken two days after arrival, regardless of vaccination status.

Grant Shapps, the UK’s transport secretary, last week said the government hopes to swap PCRs for less-expensive lateral flow tests in time for the school holidays on October 22.

Scraping mandatory PCRs could save families up to £200 ($272) per trip.

“WTTC research shows that while the global travel and tourism sector is beginning to recover, the UK continues to suffer big losses due to continuing travel restrictions that are tougher than the rest of Europe,” Ms Simpson said.

“Despite government announcements, the UK still has a red list, costly PCR tests and a requirement for day-two tests which simply put people off travel.

“Just as the world opens up, the UK has more requirements for the double vaccinated than our neighbours.”

The coronavirus crisis has led to the loss of about 307,000 tourism jobs in Britain.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

THE BIO

Born: Mukalla, Yemen, 1979

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Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.

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Updated: November 22, 2021, 9:08 AM