Leading data and analytics company GlobalData has adjusted its forecasts for the UK’s real GDP growth to 6.75% in 2021 – an upward revision of 0.4 percentage points from the May 2021 forecast – following several decisions taken by the UK Prime Minister last week to ease travel rules following COVID-19. The changes, which included the removal of Turkey, Kenya and six other countries from the ‘red list’ in its traffic light system, will only encourage so-called ‘revenge travel’ and spur economic activity such as demand for retail goods and hospitality services alongside an increase in employment.

Gargi Rao, Economic Research Analyst at GlobalData, comments: “The number of international arrivals to the UK is expected to rise by 58.9% in 2021, while departures increase by 98.2%, according to GlobalData’s Travel and Tourism database. This will be spurred by airlines keeping fares low and the removal of barriers to travelling such as PCR tests and quarantine periods.”

Rao continues: “Economic growth in the UK is likely to rebound due to the government’s effective fiscal measures and the swift vaccination rollout that has covered 66.4% of the population as of 19 September. Moreover, the COVID-19 positivity rate has come down in the past few weeks, implying that the government will not impose any further lockdowns in winter months.”

To keep pace with economic recovery, UK businesses went on a hiring spree in the first half of the year, with the unemployment rate declining from 5% in January 2021 to 4.6% in July 2021. If travel rules continue to be simplified and demand increases, the tourism industry may also start hiring – leading to a multiplier effect on air travel businesses, food & beverage industries, and other retail services sectors. GlobalData forecasts total tourism employment to rise by 3.38% in 2021, compared to 2020.”

“The government needs to provide financial assistance to sustain tourism industry growth.”