Domestic hotel and restaurant spend down, but tourism shows strong growth

By Carina Perkins contact

- Last updated on GMT

Households are still spending less on restaurants and hotels than they did before the recession
Households are still spending less on restaurants and hotels than they did before the recession

Related tags: Inflation, Recession, Late-2000s recession

Domestic household spend at pubs, restaurants and hotels remains below pre-recession levels, but tourism has bounced back quicker than other sectors of the economy, giving a welcome boost to hospitality.

The Office for National Statistics (ONS) published two separate reports this week, the first looking at average weekly household spend and the second looking at trends in tourism direct GVA (TDGVA), which is a measure of the importance of tourism to the UK economy.

Household spend

The ONS 2014 Family Spending report revealed that average weekly household spend on restaurants and hotels fell from £48.50 in 2001/2 to £40.40 in 2013.

A breakdown of 2013 figures revealed that on average, £15.90 a week was spent on restaurant and café meals, £7.10 was spent on alcoholic drinks out of the home, £4.20 was spent on takeaway meals and £4 was spent on UK hotel rooms.

Average weekly expenditure on alcoholic drinks at home, tobacco and narcotics also fell from £18.20 in 2001/2 to £12.00 in 2013 taking inflation into account.

However, overall spend on recreation and culture – a category that includes computers, games, gardening items, sport, cinema, theatres and package holidays – was up from £53.80 (adjusted for inflation) in 2001/2 to £63.90 on average.

“The trends for different types of spending show that consumers may be remaining price conscious following the economic downturn,” said the report.

“For example, consumers are continuing to spend less on certain items that may be considered discretionary such as restaurants and hotels, and alcohol and tobacco.

“The picture is not straightforward, however, as decreases have not been observed over time on clothing and footwear, and goods and services in the recreation and culture category.”

Total average weekly household expenditure was £517.30 in 2013, with housing, fuel, power and transport accounting for the biggest percentage of total spend.

Tourism growth

Meanwhile, the ‘Estimates of the Economic Importance of Tourism, 2008-2013’ report revealed that tourism has grown at a faster rate than many other sectors of the economy since the recession.

According to the ONS figures, tourism direct GVA (TDGVA) remained flat between 2008 and 2010 but grew significantly in 2011 and 2012.

In total, TDGVA rose 14.5 per cent between 2009 and 2013, while mining and quarrying GVA fell 32.9 per cent, financial and insurance GVA fell 12.5 per cent, construction GVA fell 2.6 per cent and manufacturing GVA fell 2.3 per cent.

The ONS estimated that the value of tourism stood at £49 billion between 2008 and 2010, increasing to £53 billion in 2011 and around £56 billion in 2012 and 2013.

It said tourism GVA growth was driven by ‘food and beverage services’ - including pubs, restaurants and bars - with hotels and other accommodation also making a valuable contribution.

“The results of this analysis have shown that in terms of TDGVA growth the tourism industry as a whole has been relatively resilient to the 2008 economic downturn,” said the report.

“Both 2011 and 2012 display strong TDGVA growth and, while in 2013 TDGVA has not experienced the same growth, the tourism industry has not experienced the falls in GVA that other UK industries have experienced since the economic downturn."

Infographic: Tourism contribution to the UK economy


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