Should tourists pay more?
Plus, use of cash hits four-year high, ice cream prices rise by 30 per cent and lessons from the global IT outage
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For much of the country, today marks the first day of school holidays. While many are looking to escape for the (semi-guaranteed) sunshine, tourists are flocking to the UK for their holidays. ONS data shows that 38 million people visited our shores last year. But increasingly tourism is seen as an economic and environmental issue, so much so that one Asian country is exploring drastic changes that will have other nations watching closely.
A record 17.78 million tourists visited the beautiful island of Japan in the first half of this year to see attractions such as Mount Fuji, the Imperial Palace and the Hiroshima Peace Memorial Museum. However, the weakness of the yen (see the chart below) and a surge of foreign visitors has led to businesses in the country considering a dual pricing system that would see tourists pay more than locals.
Last month, the mayor of Himeji – home to the Himeji Castle, a Unesco World Heritage site – said that he’d like to see foreign visitors paying four times as much as the current price of 1,000 yen (£5). Spending by tourists hit 5.3tn yen (£26.5bn) for 2023, a record high and making it Japan’s second-largest “export” category after cars.
This is a practice that is well-established in South Africa. One of the country’s main attractions, the Kruger National Park, charges a premium for non-South African residents. Citizens of the SADC bloc (made up of 16 member states, such as Botswana, Tanzania, Mozambique and Eswatini) get charged almost double that of SA citizens, with non-SADC countries paying almost quadruple. It is a lucrative business, with 1.6 million people visiting the park between March 2023 and March 2024.
People in Spain, however, are looking to curb the number of visitors. An estimated 50,000 people took to the streets of Majorca on Sunday to protest mass tourism. Such protests have been taking place in Barcelona and the Canary Islands, where protesters said excessive tourism is pricing out locals. Sceptics have come out saying that discouraging tourism will lead to local economies collapsing, but the discussion is spreading across the world – including the UK.
In May, the chief executive of Visit Cornwall, Malcolm Bell, came out in support of a tourist tax but said that other parts of the southwest that are popular with tourists should also implement such a tax. Last April, Manchester introduced a version of tourist tax that added a £1 fee on a stay per night at a hotel room or other accommodation.
The tax has raised £2.8m for local coffers, but it might be time to have a national conversation about an official dual-pricing approach similar to the one being pondered in Japan.
Watch this space.
Business Question
How much did businesses spend on R&D in 2022?
A. £42.6bn
B. £49.9bn
C. £52.7bn
D. £54.3bn
The answer can be found at the bottom of the page.
Business in Brief
Everything you need to know today
1. The number of people mainly using cash for day-to-day spending hit a four-year high in 2023 amid the cost-of-living crisis. According to data from UK Finance, 1.5 million adults mainly used cash, the first rise since 2019. But at the same time, younger people are increasingly using devices such as smartphones or watches to pay for thighs, with 72 per cent of those aged 18 to 24 regularly using digital wallets to make contactless payments. You can read more here.
2. The price of popular ice creams has increased by more than 30 per cent over the past two years, according to data from Which?. It found, for example, that a six-pack of Cornetto strawberry cones increased from £2.57 in the two months to 8 July in 2022 to £3.55 in the same period in 2024 – a 38 per cent increase. It comes amid rising costs of ingredients and energy. You can read more here.
3. Google’s parent company Alphabet’s revenue increased by 14 per cent to $84.7bn (£65.7bn) in the three months to the end of June on the pack of a strong performance in its search and cloud businesses. CEO Sundar Pichai said the results show how it is “innovating at every layer of the AI stack”. It comes as the company confirms it is abandoning plans to block third-party cookies from its Chrome internet browser. You can read about the results here and the cookie U-turn here.
4. Reckitt Benckiser, the company behind brands including Durex, Air Wick and Cillit Bang, is planning to sell off its home care and nutrition brands in a move to simplify the company and focus on its core business. The sale of the homecare portfolio, which generates revenues of around £1.9bn, and Mead Johnson, would leave the company with revenues of around £10bn, compared with the £14.6bn the whole group generated in 2023. You can read more here.
5. Nationwide is offering fixed-rate mortgages with an interest rate of below 4 per cent, marking the first time since February that rates have dropped below this figure. The building society is cutting rates by up to 0.25 percentage points across its two-, three- and five-year fixed mortgage deals, with a five-year deal priced at 3.99 per cent for customers looking to borrow up to 60 per cent of their property’s value. You can read more here.
Business Quotes
Inspiration from leaders
“Do not follow where the path may lead. Go instead where there is no path and leave a trail.”
– Muriel Strode
Business Thinker
Ideas on the future of business and leadership
1. ?️ Lessons from the global IT outage ?️
2. ? A simple, yet powerful way to use ChatGPT to analyse earnings calls ?
3. ? Retirement gets harder the longer you wait ?
And finally…
We recently waxed lyrical about how good Disney +’s The Bear is. Keeping in the restaurant theme, a Leeds bistro has beaten off tough London-based competition to take the crown of the best local restaurant in Britain.
Bavette came top of The Good Food Guide 2024 list of 100 local restaurants. The restaurant was described as a “pitch-perfect French bistro”, adding: “With the cooking as dazzling as the warm-hearted service, it’s our model of the perfect local restaurant.”
You can see the full list here.
The answer to today’s Business Question is B. £49.9bn.
