Travel agencies and tour operators outperform wider economy

Travel agencies and tour operators made “positive contributions” to the UK economy in the second quarter of this year, according to figures out on Friday.

Overall, the UK gross domestic product (GDP) is estimated to have fallen by 0.1% the quarter covering April, May and June, said the Office for National Statistics.

However, it added: “There were positive contributions from consumer-facing services, such as other service activities (travel agencies and tour operators did particularly well as Covid-19 restrictions eased on the tourism industry), accommodation and food service activities, and arts, entertainment and recreation activities.”

The statistics show that “administrative and support service activities” rose by 1.2% in the quarter “driven by an increase in travel agencies, tour operators and other related activities, benefitting from the easing of Covid-19 restrictions on the tourism industry”.

Travel agencies, tour operators and other related activities were up by 27% compared to Q1 2022, with a gross value added figure of £2.3 billion – and up by a whopping 438% compared to Q2 in 2021, although that was from a very low base.

However, the figures show the sector is still behind the level seen in Q2 2019, which reached £2.7 billion.

The wider services sector fell by 0.4% in the quarter, with the largest fall seen in health and social work activities, reflecting a reduction in Covid-19 activities, such as NHS Test and Trace, vaccinations and lateral flow orders.

Despite shrinking between April and June, the UK economy avoided recession because GDP grew by 0.8% in the first three months of this year.

A recession is defined as the economy getting smaller for two consecutive quarters.

The BBC reported that the latest figures from the ONS have prompted some experts to warn that recession could come sooner than they had initially thought.