UK Economic Gloom? Not Where the Tourists Hang Out
As tourists continue to flock to London from around the world, the capital's top landmarks and attractions from the Tower of London to Madame Tussauds are experiencing a boom in visitor numbers and revenues, despite the economic downturn.
In the first half of 2012, London drew 4.1 million visitors, an increase of nearly 90,000 visitors compared to 2011, according to the latest visitor survey conducted by the British government. There's also been a 9 percent increase in visitor expenditure meaning overall tourism receipts for the last quarter were 2.48 billion pounds ($4 billion).
According to Bernard Donoghue, Director of the Association of Leading Visitor Attractions (ALVA), London was a big draw for foreign visitors due to its iconic "must see" and "must experience" attractions.
"Fifty percent of all visitors to London visit [the] capital alone — that is, they come to the U.K. for London itself and nothing else. No other city in the world can say that," he told CNBC.
Donoghue said the top attraction this year had been the Harry Potter Studio tour in Watford in north London, which had been "packed full of families from day one" when it opened in April this year.
London's free attractions such as the National Gallery, Tate Modern art gallery and British Museum also attracted millions of tourists.
"Most overseas visitors love our stunning free museums and galleries…they love our tradition, heritage and history – anything from the Queen to the Tower of London and lastly, they love the quirky ways of getting round London, that it's like a lot of villages stuck together."
A Summer Dampener for Some?
This summer's events in London — from the Queen's Jubilee celebrations in June to the Olympic Games in July might have given Britain's gross domestic product a boost but they also had a downside. The events hurt retail sales and led to a decline in visitor numbers for some of London's other attractions.
As thousands of visitors flocked to see the Queen's residence Buckingham Palace or attended outdoor Jubilee events or went to the Olympics, indoor attractions suffered weaker visitor numbers. Indeed, coupled with the wettest summer in living memory, there was a 60 percent drop in visitor numbers to the nation's attractions according to ALVA, which has 43 members and oversees over 2,000 attractions in the U.K.
(Read More: Highlights From the Queen's Jubilee)
Donaghue said it was worse for some attractions in London, which reported a drop of 80 percent in visitors. Despite this, Donaghue said, "this year we're looking at it being a really good year overall."
Merlin Entertainments is Europe's largest visitor attraction operator and owns Madame Tussauds, the London Eye and the London Dungeons. In its 2011 earnings, the company reported a 15.9 percent rise in revenue to 928.4 million pounds ($1.48 billion) from a year before, and operating profit of 222.5 million pounds up 12.4 percent from a year prior.
As visitor numbers increased by 13.2 percent to 46.4 million across its group of 94 attractions in London and beyond, the company upped its investment in its attractions to 174.1 million pounds during 2011 from 119.4 million pounds in 2010.
Bernard Donoghue from the ALVA said that attractions that have invested to improve the visitor experience have gained.
"Even at a time of economic restraint those attractions which have invested in refurbishment, new exhibitions, new marketing, new catering and retail products have seen a real return on investment and more money for the visitor economy."