2025 – The Year of Competition for Tourism – Current Landscape

10 January 2025

By Ant Rawlins, CEO 

I believe 2025 will be defined as ‘the year of competition’ for the tourism sector. The year that tourism businesses will need to strap in, and compete more effectively than ever before. And competing, not just for visitor spend, but for consumer spend as a whole.

Those that succeed, will maintain and even grow, those that don't, might join the growing list of visitor attractions that have closed.

This article will explore why I envisage the future landscape as such and in the next few days I’ll be writing a follow-up, providing the areas of focus that Navigate is recommending to its clients, so that you have the best chances of success in 2025.

20 years of change 

Navigate is 20 years old this year and over that time, we’ve seen a lot of different factors which have affected the domestic tourism market, significantly changing the fortunes and functions of the visitor destinations which service that marketplace.

Take the weather as an example, which believe it or not, is responsible for about 50% of domestic tourism numbers at any specific time. However, extreme weather and environmental events have had a huge impact on our sector, from ash clouds to the beast from the east and possibly the wettest summer since the dawn of time.

But when we explore the total landscape that our businesses operate in, and which factors that could impact our success, there are a lot of different things that are going to make 2025 a particularly difficult year for the sector as a whole, and dare I say - a perfect storm.

The Wider Landscape

In terms of how we explore the wider landscape, let's look at a simple strategy tool - a PESTLE analysis.

This helps us identify risks and opportunities, giving us a great chance to take a step back and look at the bigger picture, not just considering how we compete for visitor spend, but how we compete for consumer spend in general.

Photo by Anthony DELANOIX

Political 

Now, I can’t see the political landscape improving for our sector anytime soon, mainly because funding seems to be reducing across the board. We can assume that tourism hasn’t particularly been high up the priority list, seeing as we've had 20 culture ministers in 20 years.

Our sector is still in the process of recovering from the long-term effects of COVID and the removal of VAT for tax free shipping by international tourists. The drop in lower visitor numbers and international tourism is continuing to have an effect on visitor destinations.

The recent budget has left many organisations in our sector scrambling for money due to significantly higher staff costs. Our sector does utilise a high proportion of lower income professionals, therefore, the national insurance increases disproportionately affect us, rather than say, finance or other sectors.

Economic

Everyday consumers are going to have less money this year.

Over the last couple of years we've seen what feels like the fastest rate of pricing increase I’ve experienced. Energy prices, public transport, housing crisis, rent, food cost - we all know this as the cost of living crisis, and it's going to continue to bite hard this year.

It’s no surprise to us that, from an economic point of view, the everyday consumer will have less money in their pocket that ultimately is going to be resulting in greater competition for their spend.

Social

When it comes to societal change for the year, we might not be able to predict anything quite significant. However, we can provide an estimate if we take a look over the previous leisure and recreation spend of consumers.

Over the last 40 years, the spend has steadily declined, with society investing a lot more of that recreation budget in activities not within tourism. Last year, the average household leisure and recreation budget was around £180 per family per month and this now includes everything from meals and days out to sport and streaming platforms. With that reduced spending being stretched over more activities, visitor destinations are left fighting for a smaller slice of a much smaller pie.

Technology

Technology is a gift and a curse for us in the experience sector, because that is where a lot of our budget is actually going now. Technology has become so good at keeping our eyes down and our feet inside, with the ability to have immersive experiences without having to leave your front door.

Take the cinema, you can now probably have as good an entertainment system in your own home rather than the cinema where you have people grazing on sugar behind you, which I recently experienced whilst watching Moana 2.

Environmental 

The weather dictates around 50% of visitation, and we have 13 weeks to make the biggest difference in our tourism numbers. That’s when the majority of people visit, during the holidays. Whatever we think, those are the most essential times for the campaigns we’ve run.

Climate change is resulting in more extreme weather, whether hot or cold. The fact is, that’s only going to be exacerbated. It’s only going to compound the negative impact that weather has on our business numbers ever more so. Quite frankly, the environmental factors are also not in our favour.

Legal

The final part of PESTLE is the legal landscape and thankfully, it’s relatively calm. There’s not much to concern ourselves about in the coming year.

Since writing the above, I’ve seen Mark Zuckerberg's pandering announcement disguising reducing investment in content monitoring and management as ‘freedom of speech’. Specifically, he has mentioned ‘Europe’s restrictive attitude towards this approach, and that not much innovation goes on here.

This could potentially create legal issues between the utilisation of social networks in the US versus Europe but the good news is, as ‘Europe’ errs on the side of caution and is more restrictive with fact checking and verification than the tone set across the pond - any legals changes will be a relaxing of the rules, rather than more legislation.

Therefore, please be aware that as the incoming Trump administration has clearly signalled on oversight, content monitoring and red tape. A softening of these rules, which could reach the UK and Europe, could result in a landscape with lower legal blockers, that provides opportunity for more liberal opportunities to data capture, content production and the use of AI, which organisations could capitalise on if they choose to sail a bit closer to the wind.

Photo by Natalia Gasiorowska

Summary 

So there we are, my analysis for our sector, illuminating what I feel are the main areas of influence.

Change is double sided - on one side there is challenge, but on the other is opportunity. In my next article in a few days, I'll share with you how you can best navigate these shifting sands and if you have any thoughts, comments or advice, please do share with me at anthony@navigate.agency and I will try to include them to share with our industry peers.

Here’s to a competitive, but successful 2025 for you all.

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