LONDON TOURISM REPORT 2013-2014

LONDON TOURISM REPORT 2013-2014

CONTENTS SECTION 1 London tourism trends 2013 p. 06 SECTION 2 International visits to London p. 16 SECTION 3 Domestic visits to London p. 28 SECTION 4 London s connectivity p. 36 SECTION 5 London s hotel industry p. 42 SECTION 6 London s visitor attractions and theatres p. 50 SECTION 7 The forecast for tourism in London p. 58 LONDON TOURISM REVIEW 3

NORTH AMERICA AND EUROPE ACCOUNT FOR 80% OF ALL OVERSEAS VISITS The USA is London's largest visit market, its 1.89 million represented 11.2% of all visits in 2013 HEADLINES FOR LONDON This equated to 16.8 million overseas visits in 2012 spending a total of 11.6 billion over 97.4 million nights 1,218 HOTELS PROVIDING NEARLY 42.7 MILLION ROOM NIGTHS A YEAR 14.1 BILLION 117,000 ROOMS In expenditure 2.8 BILLION 29.1 MILLION Staying overseas and domestic visitors, generating almost 12.3 MILLION VISITORS from within the uk in 2013 spending a total of 2.8 billion over 27.4 million nights ONE OF THE BEST CONNECTED CITIES IN THE WORLD WITH 344 DIRECT LINKS TO A WIDE RANGE OF SOURCE MARKETS LONDON RECEIVED 262 MILLION DAY VISITS IN 2013 OVERSEAS VISIT MARKETS GERMANY FRANCE TOP 3 NORTH AMERICA 1.89 MILLION VISITS 1.87 MILLION VISITS 1.34 MILLION VISITS 4 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 5

SECTION 1 LONDON TOURISM TRENDS 2013 PHOTO London s tourism economy is dominated by overseas visitors. In 2013 overseas visitors accounted for 58% of visits, but more significantly, they accounted for 78% of nights and 80% of expenditure. London is the fourth most visited international destination in the world based on arrivals. 262 MILLION day visits in 2013 a daily average across the year of approximately 720,000. The total number of visits to London increased by 13% from 2008 to 2013, an extra 3.3 million visits LONDON ACCOUNTS FOR OVER 50% OF ALL OVERSEAS VISITS TO THE UK LONDON Overseas visitors spent over 11.26 billion in London in 2013, while domestic visitors spent 2.79 billion Total visitor spend increased by 36% from 2008 to 2013, an extra 3.7 billion in the six year period Like many tourist destinations, London experienced a recessionary downturn in 2008/2009. Since then, and with the added impetus of hosting the Olympic Games in 2012, the market has recovered strongly, to the extent that the number of visits to London in 2013 was 4.2 million higher than the market low-point in 2009. 1.1 Total London visits and expenditure 2008-2013 Visits (million) 40 In 2013, London welcomed 29.1 million staying overseas and domestic visits, generating 14.05 billion in expenditure. Since 2008 visitor expenditure has experienced consistent growth, resulting in a 3.7 billion (36%) increase in 2013. Expenditure ( bn) 40 12.3 DOMESTIC MILLION holiday visits in 2013 and represented 42% of all arrivals to London HOLIDAY VISITORS EXPENDITURE INCREASED BY 30% from 2008 to 2013, an extra 570 million in the six year period LONDON ACCOUNTED FOR 1.5% of all international visitors arrivals in the world 30 20 10 0 2008 2009 2010 2011 2012 2013 Visits Expenditure Source: Office for National Statistics, International Passenger Survey 2008-2013; Visit England, Great Britain Tourism Survey 2008-2013 30 20 10 0 6 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 7

LONDON TOURISM TRENDS 2013 THE GROWTH IN LONDON TOURISM The city saw a surge in the number of overseas visits in 2013, an increase of 1.3 million (+8.5% year-on-year), representing the greatest increase over the six-year period. Moreover, this growth is reflected in overseas expenditure for 2013, with an increase of 11.7%. Overseas visitors accounted for 58% of all visits to London, but more significantly, they represented 78% of nights and 80% of expenditure. London is the UK s major destination for overseas visitors, accounting for nearly 51% of all overseas visits to the UK and 10% of all UK domestic visits. As well as 29.1 million overnight visits, London also received an estimated 262 million day visits in 2013 - a daily average across the year of 720,000 visits. Day visits to London also accounted for 9.22 billion in spend in 2013. 1.3 TOTAL VOLUME OF VISITS TO LONDON AND ENGLAND 2013 Volume (million) London England (Total) 1.2 LONDON OVERNIGHT VISITS, NIGHTS & EXPENDITURE 2008-2013 2008 2009 2010 2011 2012 2013 Visits (million) Overseas 14.75 14.21 14.71 15.29 15.46 16.78 Domestic 11.02 10.65 11.37 11.09 12.15 12.31 Total Visits 25.77 24.86 26.08 26.38 27.61 29.09 Nights (million) Overseas 90.8 85.7 90.3 91.5 94.3 97.4 Domestic 26.5 23.5 24.3 27.1 27.7 27.4 Total Nights 117.3 109.2 114.6 118.6 122 124.8 Overseas 16.8 28.6 Domestic 12.3 101.8 Tourism Day trips 262 1,370 Overseas Visits 2013 Domestic Visits 2013 Day Trips 2013 Source of London Visits (million) 16.8 12.3 12.3 261.7 13.6 16.8 89.4 1,108.2 261.7 Expenditure (million) Overseas 8.13 8.24 8.74 9.41 10.08 11.26 Domestic 2.22 2.18 2.41 2.4 2.78 2.79 Total Expenditure 10.35 10.42 11.15 11.81 12.86 14.05 London Visits (million) Rest of England Visits (million) London Visits (million) Rest of England Visits (million) London Visits (million) Rest of England Visits (million) Overseas (million) Day Trips (million) Domestic (million) Source: Office for National Statistics, International Passenger Survey 2008-2013; Visit England, Great Britain Tourism Survey 2008-2013 Source: Office for National Statistics, International Passenger Survey 2013; Visit England, Great British Day Visits Survey 2013; Visit England, Great Britain Tourism Survey 2013 8 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 9

LONDON TOURISM TRENDS 2013 LONDON IN A GLOBAL TOURISM CONTEXT London s established footprint in the global tourism market puts it in 4th place in Euromonitor International s Top Cities Destination Ranking of 100 of the world s the world s leading cities in terms of international tourist arrivals, well ahead of its closest competition such as New York (8th), Paris (10th), Rome (12th), Barcelona (23rd) and Amsterdam (29th). 1.5 TOP CITY DESTINATIONS RANKING 2012 Rank Destination Arrivals 2012 (million) 2011/2012 % growth 1.4 TOTAL VALUE OF ENGLAND AND LONDON VISITORS 2013 Overseas Visits Expenditure 2013 7.14 11.26 London ( bn) Rest of England Visits ( bn) Value ( billion) London England (Total) Overseas 11.26 18.4 Domestic 2.79 18.71 Tourism Day trips 9.22 46.02 Overseas visitors are higher spenders, spending 11.26 billion in London in 2013, equating to 54% of the UK overseas expenditure total, while domestic visitor spent 2.79 billion just 12% of the UK domestic total expenditure. Quantifying that overseas visitors account for approximately eight pence of every pound spent by staying visitors. Domestic Visitor Expenditure 2013 15.92 2.79 London ( bn) Rest of England Visits ( bn) Day Trip Expenditure 2013 36.80 9.22 London ( bn) Rest of England Visits ( bn) Source: Office for National Statistics, International Passenger Survey 2013; Visit England, Great British Day Visits Survey 2013; Visit England; Great Britain Tourism Survey 2013 Sources of London Expenditure ( bn) 9.22 2.79 Overseas ( bn) Day trips ( bn) 11.26 Domestic ( bn) 1 Hong Kong 23.8 6.5 2 Singapore 21.3 7.7 3 Bangkok 15.8 14.6 4 London 15.5 2.3 5 Macau 13.4 3.4 6 Kuala Lumpur 13.3 6.7 7 Shenzhen 12.1 9.6 8 New York City 11.6 8.9 9 Antalya 10.3-1.6 10 Paris 9.8 3.3 11 Istanbul 8.8 16.5 12 Rome 6.7 13.9 13 Dubai 8.0 0.5 14 Guangzhou 7.9 1.2 15 Phuket 7.2 14.7 16 Mecca 6.9 6.9 17 Pattaya 6.6 8.4 18 Taipei 6.6 24.8 19 Prague 6.5 5.1 20 Shanghai 6.5-2.2 21 Las Vegas 6.3 5.9 22 Miami 6.0 4.5 23 Barcelona 5.5 0.5 24 Moscow 5.0 13.6 25 Beijing 5.0-3.2 26 Los Angeles 5.0 1.2 27 Budapest 4.8 12 28 Vienna 4.3 8 29 Amsterdam 4.3 2.1 30 Sofia 4.1-0.4 Source: Euromonitor International s Top City Destinations Ranking 2012 (2013 edition) 10 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 11

LONDON TOURISM TRENDS 2013 1.7 Domestic and overseas expenditure 2008-2013 Expediture ( billion) 12.5 10.0 7.5 5.0 DOMESTIC AND INTERNATIONAL TOURISM TRENDS Tourist nights - In 2013 overseas visitors stayed over three times as many nights as domestic visitors a trend which has been fairly constant since 2008. This trend reflects the much higher average spend and total expenditure of overseas visitors in the capital. Tourist expenditure - Overseas expenditure has increased year-on-year, resulting in a substantial increase of 3.2 billion since 2008 (40%), while domestic expenditure appears to have stayed relatively flat over the six year period since 2008, with small increases year-on-year. Yet, this is not as insignificant as it first seems, domestic expenditure actually grew 25% from 2008-2013, resulting in a 560 million increase. The average spend per visit to London increased by 19 to 483 in 2013 representing an 82 increase since 2008. In 2013 overseas visitors spent on average nearly three times as much per visit as domestic visitors; the main factor behind this difference is the longer average stay (5.8 days for overseas visitors, compared to 2.2 days for domestic visitors). On a per day basis, overseas visitors spend an average of 14 per day more than a domestic visitor. Despite domestic visits accounting for 42% of all visits to London, domestic expenditure only accounts for 20% of all overnight tourism expenditure in London. Overseas visits are proportionally more valuable than domestic visits, with a higher average length of stay and a higher average spend per visit. 2.5 0.0 2008 2009 2010 2011 2012 2013 8.13 8.24 8.74 9.41 10.08 11.26 Overseas Expenditure 2.226 2.179 2.414 2.398 2.784 2.793 Domestic Expenditure Source: Office for National Statistics, International Passenger Survey 2013; Visit England, Great British Tourism Survey 2013 1.8 AVERAGE EXPENDITURE AND TRIP LENGTH FOR DOMESTIC AND OVERSEAS VISITS, 2013 Average Length of Stay Average Spend per day Average Spend per Visit Overseas 5.8 days 116 671 Domestic 2.2 days 102 227 Total 4.3 days 113 483 Source: Office for National Statistics, International Passenger Survey 2013; Visit England, Great British Tourism Survey 2013 PHOTO 1.6 Total number of nights stayed by domestic and overseas visitors, 2013 2013 2012 2011 2010 2009 27.4 27.7 27.1 24.3 23.5 97.4 94.3 91.5 90.3 85.7 2008 26.5 90.8 Nights (million) 0 25 50 75 100 Domestic Nights Overseas Nights Source: Office for National Statistics, International Passenger Survey 2013; Visit England, Great British Tourism Survey 2013 12 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 13

LONDON TOURISM TRENDS 2013 Despite their lower volumes, international business visitors are the second most valuable segment. This reflects the much higher average spend per visit; almost double that of a leisure visitor. VFR visitors have a lower spend because they are usually not paying for hotel accommodation. AGE PROFILE 1.10 Ranking of London visits (volume) by purpose 2008/2013 London has a broad appeal to all.age groups. In 2013, 47% of overseas visitors to London were aged 25-44, while the 35-54 year old age group accounted for 44% of domestic visitors. Domestic visitors are more likely to be older than their overseas counter parts, with the over 65 age group accounting for 11% of all domestic visitors but only 5% of overseas visitors. REASON FOR VISITING Visitors travel to London for a variety of different purposes. The tourist visitor to London is looked at through a number of different lenses dependent on their travel purpose. Holiday visits to London totalled 12.3 million in 2013 and represented about 42% of all arrivals. Since 2008 overseas holiday visits have been the key driver of growth. The number of visits has continued to grow due to the increasing volume of leisure visits, including those classified as VFR (visiting friends and relatives). In terms of volume and value, the overseas holiday segment is the most important to London s tourism sector and its importance has grown significantly since 2008, with visitor numbers increasing 30% and expenditure increasing 72%. The holiday visitor segment is the main contributor to the increase in tourism spend over the period, driven by the large increase in arrivals from overseas. Business visits make up a lower proportion of London international arrivals in comparison to holiday visits or those visiting friends and relatives (VFR). Overseas Holiday Domestic VFR Domestic Holiday Overseas VFR Domestic Business Overseas Business Overseas Others Domestic Others 0 2.5 5 7.5 10 2013 2008 Visits (million) Source: Office for National Statistics, International Passenger Survey 2013; Visit England, Great Britain Tourism Survey 2013 1.9 Domestic and overseas visitor age profile 2013 1.11 Ranking of London expenditure (value) by purpose 2008/2013 Visitors (thousands) 4,000 Overseas Holiday Overseas Business 3,000 2,000 1,000 Overseas VFR Domestic Holiday Oversesas Other Domestic Business Domestic VFR 0 0-15 16-24 25-34 35-44 45-54 55-64 65+ Overseas Domestic Age Domestic Other 0 1 2 3 4 5 6 2013 2008 Expenditure ( bn) Source: Office for National Statistics, International Passenger Survey 2013; Visit England, Great British Tourism Survey 2013 Source: Office for National Statistics, International Passenger Survey 2013; Visit England, Great Britain Tourism Survey 2013 14 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 15

SECTION 2 INTERNATIONAL VISITORS TO LONDON In 2013, London received 16.8 million visits from overseas, spending a total of 11.3 billion over 97.4 million nights The South and Central American visitor market experienced growth of 89% over the six-year period to 2013 The European and North America markets together account for 80% of all visits to London The USA is London s largest visitor origin market, accounting for 11.2% of all visits 1.18 MILLION international visits and an additional 1.18 billion in expenditure in 2013 77% OF INTERNATIONAL visitors to London arrive by air transport International visitors to London are at their peak in Quarter 3 (the months of July, August and September), and at their lowest in the winter months of Quarter 1 (January, February and March) In 2013 the 25-44 year old age group accounted for nearly 47% of all overseas visitors LONDON Welcomed an extra 1.3 million international visits and an additional 1.18 billion in expenditure in 2013 Half of London s overseas visits profile is comprised of 8.5 MILLION HOLIDAY VISITS In 2013, London received 16.8 million visits from overseas, spending a total of 11.26 billion over 97.4 million nights. These figures represent a further 1.3 million visits over 2012, and a 1.18 billion increase in spend. 2.1 LONDON OVERSEAS VISITS, NIGHTS AND EXPENDITURE 2003-2013 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Visits (million) 11.70 13.39 13.89 15.59 15.34 14.75 14.21 14.71 15.29 15.46 16.78 Nights (million) 78.9 90.2 91.8 101.1 95.8 90.8 85.7 90.3 91.5 94.3 97.4 Expenditure ( billion) 5.87 6.44 6.86 7.82 8.19 8.13 8.24 8.74 9.41 10.08 11.26 Source: Office for National Statistics, International Passenger Survey 2003-2013 16 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 17

INTERNATIONAL VISITORS TO LONDON THE GROWTH OF OVERSEAS VISITS The ten year trend for London overseas tourism paints a picture of strong growth in the first half of the previous decade, experiencing a peak in 2006 at 15.6 million visits. This was followed by a period of decline coinciding with the global financial crisis. The market started its climb out of recession in 2011, culminating in its highest ever volume of overseas visits three years later in 2013 a 43% increase on 2003. The total spend has increased steadily over the ten year period, resulting in a 92% increase on 2003. 2.2 London overseas visits and expenditure 2003-2013 Expenditure ( billion) Visits (million) 12 20 10 15 8 6 10 4 5 2 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Expenditure Visits THE OVERSEAS VISITS MARKET BY REGION Europe and North America together account for 80% of all visits to London. European visitors are very much the majority, with two thirds of all visitors to London originating from the continent. However, South and Central America has experienced strong growth in both visitor numbers and expenditure, despite accounting for a small percentage of all London visitors. The Middle East region has the strongest growth in terms of expenditure and is London s third largest expenditure market, with a115% increase since 2008. North America is London s second largest regional visitor market, but over the last six year period, the volume of visitors has seen a slight decline. In contrast, the number of visitors from other parts of the world, such as the South and Central America and the Australasia, has continued to grow. Source: Office for National Statistics, International Passenger Survey 2003-2013 2.3 OVERSEAS MARKETS 2013 BY GEOGRAPHICAL REGION AND % CHANGE Visits (million) 2008-2013 % change Expenditure ( billion) 2008-2013 % change LONDON OVERSEAS VISITS AND EXPENDITURE GROWTH 2003-2013 2012-2013 % change 2008-2013 % change 2003-2013 % change Visits 9% 14% 44% Expenditure 12% 39% 92% Source: Office for National Statistics, International Passenger Survey 2003-2013 Europe 11.0 15% 5.29 28% North America 2.33-3% 1.80 13% Asia 1.04 16% 1.16 75% Australasia 0.90 23% 0.71 62% South and Central America 0.56 89% 0.58 67% Middle East 0.53 21% 1.32 115% Africa 0.44 2% 0.54 14% Source: Office for National Statistics, International Passenger Survey 2008-2013 18 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 19

INTERNATIONAL VISITORS TO LONDON The list of source markets for London is characterised by a long tail of small markets (many of them long-haul emerging economies), several of which have been growing at a rapid rate. China (ranked 36) has been making its way rapidly up the rankings, although with only 94,000 visitors in 2013 it represents only 0.6% of the total number of overseas visits to London. THE OVERSEAS VISITS MARKET BY COUNTRY In 2013, London s top 10 origin markets accounted for 60% of all arrivals into the capital. The USA was marginally ahead of France as London s largest individual market - its 1.88 million arrivals representing 11% of all visits. The French visitor market continues to perform strongly, as the proximity and comprehensive travel connections available to the French market generate high levels of demand for short city breaks. Other major Eurozone economies of Germany, Italy, Spain and the Netherlands have also followed this trend and are collectively 2.4 TOP 10 OVERSEAS MARKETS BY VOLUME 2013 AND SIX YEAR TREND Rank Country of Residence Visits (million) six year % change 2012-2013 % change 1 USA 1.88-1% 1% 2 France 1.87 33% 11% 3 Germany 1.34 27% 12% 4 Italy 1.09 11% 13% 5 Spain 0.84-6% 6% 6 Netherlands 0.70 6% 9% 7 Australia 0.70 19% 17% 8 Republic of Ireland 0.62-16% 4% 9 Belgium 0.53 73% 13% 10 Sweden 0.52 25% 4% Source: Office for National Statistics, International Passenger Survey 2008-2013 responsible for almost one quarter of London visitors. The Belgium visit market has experienced the highest rate of visitor growth since 2008, with visits to London increasing by 73% since 2008. Apart from the USA, Australia is the only other non- European country featuring in London s top 10. Visitor numbers from Australia have increased significantly in the six years leading to 2013 as a result of the substantial appreciation in the Australian Dollar. In terms of expenditure, London s top 10 markets accounted for 50% of the total international visitor spend. As well as being London s largest market by volume, the USA is also the biggest markets in terms of visitor expediture. Spending by American visitors in 2013 totalled 1.53 billion (13.6% of overseas receipts), twice as much as France which is the second most valuable market. One half of all visitor receipts are concentrated in the top 10 source markets, and this is split evenly between Europe and the long haul markets of the USA, Australia, Kuwait and UAE. A few markets are characterised by very high levels of average expenditure, such as Kuwait and UAE which contribute disproportionately high tourism receipts compered to their share of visits. Average spends from each of these markets is 4,000 and 2,500 respectively, substantially higher than the 670 all-market average. The Chinese market displays similar properties, its share of receipts (1.6%) being more than twice its 0.6% volume share. 2.5 Top 10 overseas visitor markets by six yearvisitor trend, 1-year visitor trend and number of visitors 2013 2008-2013 % change 80% 70% 60% 50% 40% 30% 20% Sweden France Germany Belgium Austria Italy 10% Netherlands USA 2012-2013 % change 0 Spain -5% 0% 5% 10% 15% 20% -10% -20% Ireland Bubble size = Number of Visits 2013 Source: Office for National Statistics, International Passenger Survey 2008-2013 20 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 21

INTERNATIONAL VISITORS TO LONDON 2.6 TOP 10 OVERSEAS MARKETS BY VALUE 2013 AND 2008-2013 % CHANGE Rank Country of Residence Expenditure ( billion) 2008-2013 % change 1 USA 1.53 14% 2 France 0.68 52% 3 Germany 0.56 33% 4 Australia 0.55 56% 5 Italy 0.51 8% 6 Spain 0.48 27% 7 Kuwait 0.38 329% 8 United Arab Emirates 0.36 107% 9 Switzerland 0.31 94% 10 Norway 0.31 42% Source: Office for National Statistics, International Passenger Survey 2008-2013 2.7 Top 10 value markets by 1-year % change, six year% change and total expenditure 2013* 2008-2013 % change 400% 350% Kuwait 300% 250% 200% 150% UAE Switzerland 100% Austria France 50% Norway USA Italy Germany Spain 2012-2013 % change 0% -20% -10% 0% 10% 20% 30% 40% 50% 60% -50% Bubble size = Total Expenditure 2013 Source: Office for National Statistics, International Passenger Survey 2008-2013 22 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 23

INTERNATIONAL VISITORS TO LONDON REASONS FOR VISITING Approximately half of London s overseas visitor profile is comprised of 8.5 million holiday visits, which has increased by 2 million visits since 2008. London s business visits sector has also seen solid growth in the same period, although the market is still about a third of a million short of the levels it achieved in 2006 prior to the financial crisis. Business visits to London account for 26% of expenditure, the high daily expenditure being nearly twice the level for holiday visits. The business sector is also characterised by a relatively low average length of stay (4.3 nights vs. all-market average of 5.8 days), meaning business visitors contribute a relatively modest 14% of London s 97.4 million nights. The average stay of a VFR visit (7.8 days) is much longer than the all-market average, hence its one-third contribution to the nights total. But it is a low value segment, on account of many not spending on accommodation. 2.9 AVERAGE OVERSEAS EXPENDITURE AND VISIT LENGTH 2013 Average spend per day Average spend per visit Average Length of visit Business 212 905 4.3 days Holiday 127 634 5 days Misc 118 646 5.5 days Study 83 2,627 31.5 days VFR 60 468 7.8 days Total 116 671 5.8 days Source: Office for National Statistics, International Passenger Survey 2013 2.8 Profile of London overseas visits by purpose 2008-2013 Visits (million) 20 2.10 London overseas visits, nights and expendture by purpose 2013 15 Study Expenditure 48% 26% 16% 6% 4% 10 Other Business Nights 44% 14% 30% 6% 6% 5 VFR Holiday Visits 51% 19% 22% 7% 1% 0 2008 2009 2010 2011 2012 2013 0% 25% 50% 75% 100% Holiday Business VFR Misc Study Source: Office for National Statistics, International Passenger Survey 2008-2013 Source: Office for National Statistics, International Passenger Survey 2013 24 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 25

INTERNATIONAL VISITORS TO LONDON OVERSEAS VISITOR PROFILE BY AGE VISIT FLOWS THROUGHOUT THE YEAR 2.12 Quarterly distribution of London overseas visits 2008-2013 London enjoys strong appeal throughout all age groups from 16 through to 64. Moreover, in 2013 the 25-44 year old age group accounted for nearly 47% of all overseas visits. Overseas visits to London consistently peak in Quarter 3 (the months of July, August and September), and are at their lowest in the winter months of Quarter 1 (January, February and March). 30% 20% 2008 2009 2010 Even at the extremities of the age spectrum, there are still significant volumes of tourists. There were approximately 850,000 visitors aged over 65 in 2013, while there were around half a million visitors aged under 15. The most notable disruption to visits was in the Olympic year 2012, when the volume of visits in Q3 was fewer than in the prior quarter. The event displaced overseas visits from that quarter, although it can be seen that visit numbers in Q4 were higher than in 2011, as the market rapidly recovered. 10% 0% Quarter 1 Quarter 2 Quarter 3 Quarter 4 2011 2012 2013 2.11 Overseas visitor profile by age 2013 Number of visitors (million) 5 4 3 2 1 0 0-15 16-24 25-34 35-44 45-54 55-64 +65 Source: Office for National Statistics, International Passenger Survey 2013 Age 2008 2009 2010 2011 2012 2013 Quarter 1 22% 21% 20% 21% 21% 20% Quarter 2 27% 26% 24% 26% 27% 27% Quarter 3 28% 28% 29% 29% 26% 29% Quarter 4 23% 24% 26% 24% 26% 24% Source: Office for National Statistics, International Passenger Survey 2013 2.13 LONDON VISITORS MODE OF ARRIVAL 2008-2013 2008 2009 2010 2011 2012 2013 Air 81% 79% 77% 78% 77% 77% Sea 8% 8% 8% 8% 7% 8% Tunnel 11% 13% 15% 14% 16% 15% Source: Office for National Statistics, International Passenger Survey 2008-2013 Arrivals via the Channel Tunnel (combining Eurostar rail and shuttle-based services) have increased their share to 15% since 2008. This mode of transport is the most popular for French and Belgian visitors. The prospect of additional routes being added (for example to Cologne and Amsterdam), means that train travel to London is set to increase in popularity. 26 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 27

SECTION 3 DOMESTIC VISITORS TO LONDON THE DOMESTIC VISIT MARKET 3.1. LONDON DOMESTIC VISITS, NIGHTS AND EXPENDITURE 2008-2013 In 2013, London received 12.3 million visits from within the UK, spending a total of 2.8 billion over 27.4 million nights 262 MILLION DAY TRIPS TO LONDON 2008 2009 2010 2011 2012 2013 Visits (million) 11.02 10.65 11.37 11.09 12.15 12.31 Nights (million) 26.5 23.5 24.3 27.1 27.7 27.4 Expenditure ( billion) 2.23 2.18 2.41 2.40 2.78 2.79 Source: Visit England, Great British Tourism Survey 2008-2013 In 2013, London received 12.3 million visits from within the UK, spending a total of 2.79 billion over 27.4 million nights. The six year trend for domestic overnight tourism illustrates that the market is growing despite challenging market conditions between 2008 and 2011. In 2013 London experienced approximately an extra 150,000 domestic visits - a small increase on the previous year while domestic expenditure remained stable at around the 2.8 billion mark. 3.2 Domestic visits and expenditure in London 2008-2013 Holiday visits accounted for the largest expenditure segment at 44% At 39%, VFR visits formed the largest volume segment of domestic visits in 2013. Visits (millions) 15 Expenditure ( billions) 3 10 2 5 1 0 2008 2009 2010 Visits 2011 2012 2013 0 Expenditure Source: Visit England, Great British Tourism Survey 2008-2013 28 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 29

DOMESTIC VISITORS TO LONDON 3.4 Profile of London domestic visits by purpose 2008-2013 Domestic Visits (millions) 15 REASON FOR VISITING Scotland and Wales account for just 12% of domestic overnight visits to London and 18% of expenditure. Whereas, visits from the South East and South West account for 31% of all domestic visits to London. The majority of domestic visits to London originate from England, with over 80% of visitors originating from English regions. The domestic visitor profile of London can be split into holiday, business and VFR visits, with the largest share of the city s domestic profile comprised of 4.66 million VFR visits. Since 2011 the domestic business sector has experienced consistent growth and has overtaken the level of visits reached in 2010. 10 5 0 2.7 3.3 3.3 3.0 2.7 2.9 4.8 4.1 4.1 4.2 4.3 4.7 3.1 3.5 3.9 3.7 4.2 3.8 2008 2009 2010 2011 2012 2013 Business VFR Holiday Source: Visit England, Great British Tourism Survey 2008-2013 3.3 DOMESTIC VISITS TO LONDON BY REGION OF RESIDENCE 2013 Visits (milllion) % of Visits Expenditure ( billion) % of Expenditure Scotland 0.82 7% 0.32 11% Wales 0.58 5% 0.2 7% North East 0.41 3% 0.12 4% North West/Mersey 1.33 13% 0.43 15% Yorkshire/Humberside 1.34 11% 0.33 12% East Midlands 1.11 9% 0.26 9% West Midlands 0.96 8% 0.27 10% East of England 0.85 7% 0.13 5% London 0.8 6% 0.06 2% South East 2.10 17% 0.32 11% South West 1.69 14% 0.36 13% Source: Visit England, Great British Tourism Survey 2013 VFR visits formed the largest volume segment of domestic visits in 2013, although their total spend was significantly lower than either business or holiday visits. Holiday visits accounted for the largest expenditure segment at 44%, and business visits accounted for nearly a third of the total volume. 3.5 LONDON DOMESTIC VISITS, NIGHTS AND EXPENDITURE BY PURPOSE, 2008-2013 2008 2009 2010 2011 2012 2013 Holiday Visits (millions) 3.07 3.50 3.90 3.70 4.17 3.80 Expenditure ( billions) 0.92 0.92 1.03 0.98 1.23 1.20 Nights (millions) 8.1 7.6 8.2 7.5 9.0 8.2 VFR Visits (millions) 4.75 4.14 4.09 4.22 4.32 4.66 Expenditure ( billions) 0.55 0.43 0.47 0.47 0.52 0.60 Nights (millions) 12.1 9.8 9.6 12.5 11.0 12.0 Business Visits (millions) 2.70 2.68 3.02 2.86 3.25 3.34 Expenditure ( billions) 0.73 0.78 0.84 0.88 0.95 0.90 Nights (millions) 5.9 5.4 5.9 5.72 6.9 6.3 Source: Visit England, Great British Tourism Survey 2008-2013 30 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 31

DOMESTIC VISITORS TO LONDON DOMESTIC VISIT CHARACTERISTICS Across all purposes of visit in the domestic market, the average stay spans a range between 1.9 and 2.6 days. In 2013 domestic visitors to London lasted on average 2.2 nights in 2013 (this figure has remained largely unchanged over the past few years). DOMESTIC VISITOR PROFILE BY AGE London consistently appeals to all age groups in the domestic profile but proves most popular to visitors aged between 35 and 54. With the 35-54 year old age group accounting for 44% of domestic visitors. 3.7 AVERAGE DOMESTIC SPEND AND TRIP LENGTH BY PURPOSE 2013 Average length of visit Average spend per day Business 1.9 143 270 Holiday 2.1 147 317 VFR 2.6 50 130 Total 2.2 102 227 Source: Visit England, Great British Tourism Survey 2013 Average spend per visit While the average daily spend of domestic visits ( 102) is on a par with that of overseas ( 116), the much shorter length of stay of domestic visits means that spend per trip is correspondingly lower ( 227 in 2013 while overseas visits averaged 671). 3.6 London domestic visits, nights and spend by purpose 2013* Holiday VFR Business 3.8 PATTERN OF SPENDING AND AVERAGE LENGTH OF STAY OF DOMESTIC LONDON VISITS, 2008-2013 2008 2009 2010 2011 2012 2013 Average stay 2.4 2.2 2.1 2.4 2.3 2.2 Expenditure per visit 208 207 212 216 229 227 Expenditure per night 86 94 99 89 101 102 Source: Visit England, Great British Tourism Survey, Quarterly Regional Summary Q4 2008-2013 Nights 31% 45% 24% Expenditure 44% 22% 33% 3.9 Domestic visitor profile by age 2013 Compared to the overseas visitor profile the over 65 age group enjoys greater prominence, accounting for 10% of the domestic profile and 1.3 million visitors. Visitors (millions) 3 Visits 32% 39% 28% 0% 25% 50% 75% 100% 2 Source: Visit England, Great British Tourism Survey 2008-2013 1 0 16-24 25-34 35-44 45-54 55-64 +65 Age Source: Visit England, Great British Tourism Survey 2008-2013 32 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 33

DOMESTIC VISITORS TO LONDON 3.10 Monthly distribution of domestic visits to London, 2008 and 2013 Visits (thousands) 1,500 1,000 2008 DOMESTIC VISIT FLOWS THROUGHOUT THE YEAR 500 2013 About half of all visits to London are made in the spring and summer period from April to September. However it is not unusual for December to be the most popular month for domestic arrivals to London, while a late Easter can generate a substantial spike in April activity. 0 Source: Visit England, Great British Tourism Survey 2008-2013 PHOTO 3.11 Quarterly distribution of London visits 2008-2013 Percentage of visitors 30% 20% 10% 2008 2009 2010 2011 2012 2013 0% Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 2008 2009 2010 2011 2012 2013 26% 21% 24% 22% 20% 22% 26% 30% 24% 25% 24% 26% 25% 24% 27% 25% 25% 26% 22% 25% 26% 28% 30% 27% Source: Visit England, Great British Tourism Survey 2008-2013 34 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 35

SECTION 4 LONDON S CONNECTIVITY London has 6 airports serving the city, making it one of the best connected cities in the world, with over 344 direct air links. HEATHROW is the dominant London airport with 72 million passengers in 2013, representing 52% of London s total, and nearly 32% of all UK air passenger traffic. GATWICK S 35 million passengers represent one quarter of London s air passenger total. Waterloo IN 2013, EUROSTAR CARRIED A TOTAL OF 10.1 MILLION PASSENGERS, A 2% INCREASE ON 2012. LONDON LONDON SOUTHEND served nearly 970,000 passengers in 2013, a massive increase compared with the 44,000 passengers served in 2008. STANSTED AND LUTON have a combined annual passenger total of 27 million passengers. is London s busiest rail terminal with 95.9 million passenger entries and exits in 2012/2013, followed by Victoria (77.3 million passenger entries and exits). In October 2013, London had direct connections to 212 countries LONDON CONNECTIVITY London has 6 airports serving the city, with over 344 direct air links to a comprehensive range of origin markets. London also has international rail links to Europe via the Eurostar Terminal at St Pancras Station, making it one of the best connected cities in the world. Heathrow is the dominant London airport, with its 72 million annual passengers in 2013 representing 52% of London s total. The airport is a European hub for many national carriers and their alliance partners, and is the main entry point for most long haul traffic into the UK and premium air traffic. Heathrow Airport accounted for nearly 32% of all UK air passenger traffic in 2013. Gatwick s 35 million passengers represent over one quarter of London s total. With several low-cost carriers and charter operators at the airport and route networks spanning Europe, the passenger mix is strongly weighted towards holiday visitors. London City is the capital s newest airport, accounting for 2.4% of London air passengers in 2013. Its close proximity to the centre of London means that business travellers form its core catchment. As one of London s smaller airports, it has a smaller operating scale than its bigger rivals, which means its schedules are dominated by small, short-range aircraft on European routes. Stansted and Luton are the main bases for UK s leading low-cost airlines, Ryanair and EasyJet. Both airports have also successfully attracted low cost operators based in continental Europe meaning that the mix of their combined annual 27 million passengers is strongly leisure-oriented. London Southend is a fairly recent addition and provides a regional hub outside of congested London airspace. The airport has undergone a major redevelopment in recent years - with a new airport railway station and Air Traffic Control Tower in 2011, and a runway extension in 2012. London Southend served nearly 970,000 passengers in 2013, a massive increase compared to the 44,000 passengers served in 2008. In 2013, Eurostar carried a total of 10.1 million passengers while estimated 10.3 million passengers used the Eurotunnel 36 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 37

LONDON S CONNECTIVITY LONDON S LINKS TO THE REST OF THE WORLD 4.1. SUMMARY OF DESTINATIONS SERVED, WEEKLY FLIGHTS AND SEAT CAPACITY OF LONDON AIRPORTS No. of destinations No. of weekly flights Seat capacity UK 14 1,229 159,158 Europe 211 6,731 1,053,822 Asia/Australia 30 494 164,930 North America 31 842 237,243 Latin America/Caribbean 18 98 29,191 Middle East 9 248 79,897 Africa 31 272 62,065 Total 344 9,914 1,786,306 Source: Official Airline Guide, October 2013 In October 2013, London had direct connections to 212 European destinations. Amsterdam and Dublin are the most frequently served, but most capital and second cities in Europe s main economies are served by over 100 flights a week. London has direct flights to 31 American cities. There are 206 departures a week to New York alone, as well as a further 98 flights a week to Washington and Boston. Chicago is a major mid-west hub for the Star Alliance group of airlines, with an average of 7 flights a day from London, while flights to the West coast are dominated by the 54 weekly flights to Los Angeles. 4.3 Main worldwide connections from London, October 2013 LONDON Sydney and Melbourne are the major routes into Asia/ Australasia, along with the main hubs of Hong Kong and Singapore. Delhi and Mumbai have the highest frequencies from London to the Indian sub-continent. Middle Eastern networks are dominated by Dubai, the destination for 40% of flights and 49% of capacity into this region. Dubai s major hub status also means that it is helping to connect London with destinations that aren t served by direct routes. 4.2 Summary of destinations served, weekly flights and seat capacity 2013 75% Share destinations (%) Share Flights (%) Share capacity (%) 50% 25% 0% UK Europe Asia/Australia North America Latin America Caribbean Middle East Africa Source: Official Airline Guide, October 2013 Source: Official Airline Guide, October 2013 38 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 39

LONDON S CONNECTIVITY DOMESTIC CONNECTIVITY There are 14 National Rail terminals in Central London. These stations are the main passenger hubs for the city and provide connections to almost every part of the UK. Waterloo is the busiest London terminal based on reduced exit and entrance tickets (off-peak and railcard tickets) in 2013. Victoria is a close second with 27.8 million reduced exits and entries while Euston is third. London rail terminals Blackfriars serves stations on the Bedford to Brighton cross-london Thameslink route. Cannon Street serves stations throughout London and Kent. Fenchurch Street serves stations on the North side of the Thames Estuary. Moorgate serves more local, commuter stations in North and North East London. Euston serves central and North- West England and western Scotland, including Birmingham, Manchester, Liverpool, Glasgow, with links to both rail and ferry services from both Northern Ireland and Ireland. King s Cross serves the north east of England and eastern Scotland including Leeds, York, Newcastle, Aberdeen and Edinburgh. St Pancras serves the East Midlands including, Leicester, Nottingham and Sheffield. It is also the terminus for Eurostar services to Brussels and Paris. Waterloo Serves the South Coast including Bournemouth, Southampton and Winchester. Marylebone serves stations in the south Midlands including Leamington Spa and Birmingham. Paddington serves the West Country and stations in South Wales including Bath, Bristol, Cardiff, Exeter and Oxford. Paddington is the terminus for the Heathrow Express to Heathrow Airport. Victoria serves the south and south east costal towns including Brighton, and Canterbury. It is also the terminus for the Gatwick Express to Gatwick Airport. London Bridge serves stations in Kent, Sussex and South East London. GLASGOW LIVERPOOL Holyhead EDINBURGH LEEDS MANCHESTER Doncaster Leicester Peterborough BIRMINGHAM Cambridge Norwich 4.8 USAGE OF LONDON S RAIL TERMINALS 2012 2013 Station Reduced Exits and Entries (millions) All Entries and Exits (millions) Waterloo 29.1 95.9 Victoria 27.8 77.3 Euston 21.5 36.5 Paddington 17.6 33.7 King s Cross 16.3 27.8 Liverpool Street 14.4 57.1 London Bridge 13.0 52.6 Charing Cross 11.7 38.1 St. Pancras 10.9 23.0 Marylebone 6.3 13.4 Fenchurch Street 3.3 16.9 Blackfriars 2.3 12.8 Cannon Street 2.1 20.2 Moorgate 1.2 7.6 Source: Office of Rail Regulation, Train Station Usage 2012-2013 AREAS COVERED BY PROMINENT LONDON RAIL TERMINALS Euston London Bridge E LB Liverpool Street serves stations in the East, including East Anglia and Essex. It is also the London terminus for the Stansted Express to Stansted Airport. Charing Cross serves stations throughout the south east London and Kent. Swasea CARDIFF Newport BRISTOL M P E KC LONDON W LB LS DOVER King s Cross Liverpool Street Waterloo Paddington Marylebone KC LP W P M EXETER Weymouth BRIGHTON Penzance PLYMOUTH 40 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 41

SECTION 5 LONDON S HOTEL INDUSTRY The luxury class bracket (broadly comparable to the 5-star rating) accounts for over 10% of London s room stock. ALMOST OF LONDON S HOTELS 1/2 1,218 HOTELS PROVIDING NEARLY 117,000 ROOMS LONDON HOTEL MARKET The London hotels census recorded 1,218 hotel establishments providing approximately 117,000 rooms in autumn 2013; meaning that London offers about 42.7 million room nights a year. Based on an average of 1.75 beds per hotel room, this converts to approximately 75 million bed spaces to cater for a current demand level from holiday and business visitors totalling nearly 71 million nights. PHOTOS 5.1 BREAKDOWN BY CATEGORY Rooms Hotels Total Rooms Total Establishments Economy 26,282 23% 449 37% Midscale 11,236 10% 117 10% Upper Midscale 13,321 11% 132 11% Upscale 33,576 29% 289 24% Upper upscale 20,488 18% 149 12% Luxury Class 11,869 10% 82 7% Total 116,772 1,218 Source: STR Global London Survey, July 2013 HAVE 50 ROOMS OR LESS, WITH 90% OF THESE BEING INDEPENDENTLY OWNED. 42.7 MILLION room nigths a year Since 2010, hotel occupancy levels for London hotels have averaged 83% 2013 SAW THE AVERAGE ROOM RATE IN LONDON DECREASE TO 143.51. THE WEST END PROVIDES 16% OF LONDON S HOTEL STOCK AND 22% OF THE CITY S ROOMS THE DEVELOPMENT PIPELINE FOR THE FIVE YEARS TO 2017 IS SUBSTANTIAL, WITH APPROXIMATELY 21,600 CATEGORISED BEDROOMS IN THE PROBABLE STAGE. Across London s 33 Boroughs, there are currently 31 hotels under construction, adding approximately 4,700 bedrooms to the city s room stock. 42 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 43

LONDON S HOTEL INDUSTRY 5.2 London hotels breakdown by category 10% 7% 12% 18% Luxury Class Upper upscale LONDON HOTEL CATEGORIES The top-end Luxury class bracket (broadly comparable to the 5-star rating) accounts for over 10% of London s room stock. This sector has attracted significant development in the last three years. Slightly lower down the price spectrum, Upscale properties comprising of the Upscale and Upper Upscale categories (roughly comparable to 4-star/upper 3-star) number 438. These provide nearly 36% of London s room stock. 29% 11% 10% 23% Rooms 24% 11% 10% 37% Establishments Upscale Upper Midscale Midscale Economy Midscale hotels are broadly comparable with a 3-star designation. Just over one-fifth of London hotels are in this category, providing over 24,500 rooms. At the lowest end of the price offer, the Economy category is the most populous in terms of establishments (449 hotels representing 37%). A large number of these are small guest-house style properties, many with less than 20 rooms. However, in the past five years, leading budget chains have driven growth in the category, making low-cost accommodation more accessible to larger numbers of visitors closer to the centre of London. Source: STR Global London Survey, July 2013 LONDON S HOTELS BY SIZE London s hotel portfolio now includes 20 properties with over 500 rooms, including 4 properties with more than 1,000 rooms. It means that these 20 hotels alone control 13% of London s room stock. The largest hotel in the capital is the independently owned Royal National Hotel in Bloomsbury, a Midscale hotel with 1,630 rooms. Hilton s London Metropole in Paddington provides 1,054 rooms in the Upper Upscale banding, making it the largest hotel in the category. Almost half of London s hotels have 50 rooms or less, with 90% of these being independently owned, and nearly 50% having an Economy designation. Within the ranks of the smallest hotels, however, there are a small number of Luxury Class properties such as the Firmdale hotels, as well as 45 Park Lane. 5.3 BREAKDOWN OF HOTELS BY ROOM SIZE Establishments Rooms Total % Total % 1000 + 4 0.3% 4,722 4.0% 750-999 5 0.4% 4,217 3.6% 500-724 11 0.9% 6,615 5.7% 250-499 76 6.2% 25,752 22.1% 100-249 259 21.3% 40,796 34.9% 50-99 272 22.3% 19,253 16.5% Less than 50 591 48.5% 15,417 13.2% Total 1,218 116,772 Source: STR Global London Survey, July 2013 44 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 45

LONDON S HOTEL INDUSTRY GEOGRAPHICAL PROFILE OF HOTELS New areas of London, such as the City of London, Southwark, Lambeth and boroughs to the East are supplementing traditional accommodation hot spots such as Bloomsbury, Mayfair, Victoria and Kensington. The West End provides nearly 16% of London s hotel stock and nearly 22% of the city s rooms, with a strong cluster of Luxury class properties in areas such as Park Lane and Mayfair. A westerly corridor in the direction of Paddington/Bayswater provides for more cost-conscious visitors, as does the neighbouring Earls Court/Kensington area. Between them these areas account for 24% of London rooms. Elsewhere, developers have been improving the availability of hotel amenities around Canary Wharf and Docklands, so that this zone accounts for almost 5% of rooms. Further growth opportunities have come from the recently enlarged Excel Convention Centre, a significant draw for event business visitors to London. 5.4 BREAKDOWN OF HOTELS BY DISTRICT Establishments Rooms Total % Total % London West End 191 15.7% 25,217 21.6% Earls Court/Kensington/Chelsea 184 15.1% 15,160 13.0% Paddington/Bayswater/Notting Hill 175 14.4% 12,857 11.0% North Central London 108 8.9% 11,975 10.3% The City/Shoreditch 62 5.1% 9,758 8.4% South Central London 58 4.8% 8,816 7.5% Knightsbridge/Pimlico/Victoria 100 8.2% 7,065 6.1% Outer London South 98 8.0% 6,366 5.5% Docklands/Greenwich 34 2.8% 5,700 4.9% Outer London West 78 6.4% 5,073 4.3% Outer London North 63 5.2% 4,681 4.0% Outer London East 67 5.5% 4,104 3.5% Total 1,218 100.0% 116,772 100.0% Source: STR Global. London Survey, July 2013 One tenth of rooms are located in the North Central zone, anchored around Bloomsbury/Russell Square, with a number of very large properties catering primarily for leisure tourists. The proximity of attractions such as the British Museum, as well as easy access to the most popular tourist zones makes the area an attractive base. The City of London has traditionally been under-supplied with hotel accommodation, with most business visitors to the Square-Mile using facilities in adjacent districts. However, re-generation of the neighbouring Shoreditch area has helped to change this, and there are now 62 hotels offering 9,758 rooms. Much of London s visitor activity has traditionally been centred north of the river. But the gravitational pull of major visitor attractions on the South Bank, and the enhanced business infrastructure in the area has seen a raft of hotel development in the boroughs of Lambeth and Southwark and along the river frontage. The South Central zone now has 58 establishments, providing nearly 9,000 rooms. 46 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 47

LONDON S HOTEL INDUSTRY 5.6 London hotel pipeline by room grade 2013 2017 Apartments Budget 2-star 3-star 4-star FUTURE HOTEL DEVELOPMENTS AND PIPELINE There was a significant period of hotel development in the period leading up to the 2012 Olympic Games. More than 7,700 new rooms opened in three year period between 2009 and 2011, with a further boost of almost 7,800 rooms in 2012. The development pipeline for the five years to 2017 is substantial, with approximately 21,600 bedrooms (182 hotels) categorised in the probable stage (i.e. hotels with detailed planning permission granted). In addition, a further 20,700 bedrooms (190 hotels) are categorised as possible (i.e. hotels with outline planning permission that are likely to be constructed, or hotels likely to gain permission) for the next five years to 2017. 5.5 London hotel developments measured in room additions 2003-2017 Number of Rooms 10,000 7,500 5,000 2,500 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f Source: CBRE Hotels/London & Partners London Hotel Development Monitor 2013 5-star 0 5,000 10,000 15,000 20,000 25,000 Source: CBRE Hotels/ London & Partners London Hotel Development Monitor 2013 5.7 London hotel pipeline by borough and planning status 2013 2017 Merton Kensington & Chelsea Havering Richmond Waltham Forest Bexley Bromley Enfield Barking & Dagenham Barnet Sutton Haringey Kingston Redbridge Harrow Lewisham Croydon Wandsworth Ealing Camden Southwark Hammersmith & Fulham Islington Lambeth Greenwich Hackney Brent Newham Hounslow Westminster City of London Tower Hamlets Hillington 0 1,000 2,000 3,000 4,000 5,000 6,000 Source: CBRE Hotels/ London & Partners Under London Construction Hotel Development Monitor Probable 2013 Possible 48 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 49

SECTION 6 LONDON VISITOR ATTRACTIONS AND THEATRES The British Museum, National Gallery, Natural History Museum and Tate Modern attracted almost between them in 2013 THESE 4 ATTRACTIONS HAVE GROWN IN COLLECTIVE POPULARITY BY 19.6%, YIELDING AN ADDITIONAL 3.8 MILLION VISITORS ST PAUL S CATHEDRAL SINCE 2009 19.6% + WESTMINSTER ABBEY CATHEDRAL 23 MILLION VISITORS 65% of the British Museum s visitors were from overseas The number of visitors visiting the Churchill War Rooms has grown 38% since 2012. LONDON VISITOR ATTRACTIONS british museum London s iconic attractions are a major draw for visitors, with the city hosting 17 of the top 20 visited attractions in the UK. The city s rich mix of built heritage, world class museums, galleries and royal attractions provide a compelling motivation to visit. BOTH ATTRACTED OVER 2 THEATRES ATTENDANCE INCREASED 4.3% TO 14.6 MILLION, AN ADDITIONAL 600,000 PEOPLE MILLION VISITORS IN 2013 1/3 of overseas visitors visited a theatre performance during their stay in London The capital s iconic museums and galleries are undoubtedly the big draw for many visitors, the four largest - the British Museum, National Gallery, Natural History Museum and Tate Modern - attracting almost 23 million visitors between them in 2013. Over the last four years since 2009, these four have grown in collective popularity by 19.6%, yielding an additional 3.8 million visitors between them. Beyond these four, the list of popular museum venues includes the Science Museum, the Victoria & Albert (one of London s fastest growing major attractions in the last five years), as well as the National Portrait Gallery, all with an excess of 2 million visitors in 2013. London s historic properties are dominated by the Tower of London, while the city s two landmark cathedrals, St Paul s and Westminster Abbey, both attracted over 2 million visitors in 2013. While most of London s leading attractions are located in the central area of the city, the top 20 attractions in 2013 also included the trio of Greenwich venues the Old Royal Naval Hospital, National Maritime Museum, and Royal Observatory between them attracting 4 million visitors in 2013. To the south west of the capital, Kew Gardens is London s world class botanical attraction, with just over 1.3 million visitors. 50 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 51

LONDON VISITOR ATTRACTIONS AND THEATRES ATTRACTIONS AND THEIR POPULARITY WITH OVERSEAS VISITORS London s four most popular attractions benefited from substantial volumes of international visitors in 2012/13. The British Museum was one of the most popular attractions for international visitors, with 65% of all visitors from overseas. Just over one-half of visitors to the Natural History Museum were from overseas. Overseas visitors also make up a large proportion of attendances at the Tate venues, National Portrait Gallery and the Victoria & Albert Museum. London s Top 4 attractions receive at least 50% of their visitors from overseas, with the 5th most popular (the Tate) receiving 48% of all visitors from overseas. 6.2 OVERSEAS VISITORS TO LEADING London ATTRACTIONS, 2008/09 AND 2012/13 6.1 TOP 30 LONDON ATTRACTIONS 2013 Attraction Visitors (millions) % change compared to 2012 1 British Museum 6.70 20% 2 National Gallery 6.03 14% 3 Natural History Museum 5.36 6.7% 4 Tate Modern 4.88-8% 5 Science Museum, South Kensington (SMG) 3.32 10.9% 6 Victoria & Albert Museum (V&A) 3.29 1.8% 7 Tower of London (HRP) 2.89 18.4% 8 Somerset House Trust 2.4 N/C 9 St Paul s Cathedral 2.14 19% 10 Westminster Abbey 2.02 13.8% 11 National Portrait Gallery 2.01-4% 12 Old Royal Naval College Greenwich 1.8 1% 13 British Library 1.48 4.3% 14 National Maritime Museum (RMG) 1.44 27% 15 Tate Britain 1.38-10% 16 Royal Botanic Gardens, Kew 1.32 29.4% 17 ZSL London Zoo 1.29 26.4% 18 Houses of Parliament 1.04 4% 19 Royal Academy of Arts 1.02-19% 20 Royal Observatory Greenwich 0.8 27% 21 Tower Bridge Exhibition (CLA) 0.6 17% 22 Hampton Court Palace (HRP) 0.56 7.6% 23 Churchill War Rooms (IWM) 0.48 38% 24 Victoria & Albert Museum of Childhood 0.44 3.7% 25 Kensington Palace (HRP) 0.4 13.4% 26 Imperial War Museum, London (IWM) 0.36-62%* 27 HMS Belfast (IWM) 0.33 107%** 28 Cutty Sark (RMG) 0.32 26% 29 The Monument (CLA) 0.24 9% 30 The Royal Air Force Museum London 0.23 7.4% 2008/09 2012/13 % change Tate Gallery 2,967,000 3,744,530 26% British Museum 3,228,234 3,609,800 11% National Gallery 1,553,600 3,225,000 108% Natural History Museum 1,264,959 2,670,989 111% Victoria & Albert Museum 817,800 1,536,900 88% Science Museum Group 981,295 1,240,000 26% National Maritime Museum 1,060,012 1,007,526-5% National Portrait Gallery 680,000 923,473 36% Imperial War Museum 634,702 727,707 14% Wallace Collection 140,074 143,547 2.5% Sir John Soane s Museum 24,112 35,749 48% Horniman Museum 9,092 24,491 169% Geffrye Museum 9,000 11,728 30% Total 13,369,880 18,901,440 41% Source: Department for Culture, Media and Sport Performance Indicators 2012/13 6.3 Proportion of overseas visitors to leading London attractions, 2012/13 British Museum National Gallery National Maritime Museum Natural History Museum Tate Gallery National Portrait Gallery Victoria and Albert Museum Wallace Collection Imperial War Museum Sir John Soane's Museum Science Museum Group Geffrye Museum Horniman Museum Source: Department for Culture, Media and Sport Performance Indicators 2012/13 4% 11% 24% 52% 51% 48% 45% 41% 38% 37% 34% 65% 60% * Six month closure & partial reopening due to building works ** Closure in previous year Source: Association of Leading Visitor Attractions (ALVA) 2013 52 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 53

LONDON VISITOR ATTRACTIONS AND THEATRES PHOTOS In central London a number of visitor attractions have experienced a surge in overseas visitors. The Natural History Museum has experienced the most substantial increase, resulting in a 111% change from 2008/9 to 2012/13. This is closely followed by the National Gallery, which has benefitted from a 108% increase. However, even attractions outside of the city centre have experienced growth in overseas attendees with The Horniman Museum increasing its volume of overseas visitors 169%. ATTRACTION ATTENDANCE Full year figures for attendances at London visitor attractions underline the strength and growing appeal of the sector, with attractions reporting 14% higher attendances than in 2012. The Olympics resulted in a temporary downturn in visitor numbers in 2012, so to some extent this flatters the results for 2013. However, if the comparison is made against prior conditions in 2011, the increase is an appreciable 12%. 6.4 Attractions attendance in London by month and year 2009 2013 6 5 4 Visitor (millions) 2013 2012 London s free museum and gallery venues attractions generate the largest attendances, increasing by 10.5% in 2013, buoyed by a number of highly popular temporary exhibitions such as David Bowie is at the Victoria & Albert Museum, and Life and Death Pompeii & Herculaneum at the British Museum. In the paid-for category of visitor attractions, attendances enjoyed a 19.6% boost in 2013. 6.5 Attendance at London attractions by fee 2013 Visitors (million) 3 3 2011 2010 2 Free Attractions 2 2009 1 Charging Attractions 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: London & Partners Visitor Attraction Monitor 2013 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: London & Partners Visitor Attraction Monitor 2013 54 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 55

LONDON VISITOR ATTRACTIONS AND THEATRES LONDON S THEATRES 6.6 Attendance trends at free and charging attractions 2009-2013 Visitors (millions) 50 40 18.3 The Society of London Theatre s (SOLT) 2013 figures show that both attendance figures and ticket revenue reached record highs. Attendances increased 4.3% to 14.6 million, an additional 600,000 people and gross revenues of 585 million were up 11% on the previous year. Among the 52 West End theatres that comprise the membership of SOLT, there were just over 18,400 performances in 2013 with 270 new productions. According to a survey conducted in 2012, one third of overseas visitors had visited a theatre performance during their stay in London. This figure was as high as 50% for US visitors, while for other English speaking markets such as Canada and Australia, 40% is typical. Musicals are very much the mainstay of London s West End theatre offering. In 2013, these accounted for 56% of West End theatre volumes, and 61% of revenues. Plays contribute 29% to the West End s attendance mix and 24% of revenues. 2013 was a particularly strong year for West End productions, buoyed by the popularity of musicals such as Book of Mormon, The Commitments and Charlie and the Chocolate Factory, as well as plays including The Audience, Iago and Othello. 30 20 15.3 15.3 16.1 15.6 Charge Free 6.8 ATTENDANCE AND REVENUE AT WEST END THEATRES SPLIT BY PERFORMANCE CATEGORY, 2013 attendances (millions) % attendances revenue ( millions) Musicals 8.20 56% 355.4 61% % revenue 10 22.2 23.1 23.2 23.5 28.3 Plays 4.25 29% 140.0 24% Others 2.14 15% 90.1 15% Total 14.59 100% 585.5 100% 0 2009 2010 2011 2012 2013 Source: London & Partners Visitor Attraction Monitor 2009-2013 6.7 SOLT S TOP 10 THEATRES BY SEATING CAPACITY Theatre Seating Capacity 1 London Palladium 2,291 2 Drury Lane, Theatre Royal 2,188 3 Dominion 2,137 4 Lyceum Theatre 2,107 5 Apollo Victoria 1,832 6 Prince Edward 1,625 7 Victoria Palace 1,575 8 Adelphi 1,500 9 Shaftesbury 1,405 10 Palace 1,390 Source: society of London theatres, list of prominent London theatres 2013 56 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 57

SECTION 7 THE FORECAST FOR TOURISM IN LONDON The outlook for London s tourism economy is strong. Visit numbers are forecast to rise by 4.9% in 2014, driven by robust demand from international markets. For the next two years slightly lower levels of growth are forecast, mainly as the post-olympics impact begins to dissipate. However, there is strong momentum in terms of growing global tourism demand as well as improving economic conditions in London s core European markets. At these rates of growth, London will be welcoming 2.7 million more international and domestic visits in 2015 compared to 2013, equivalent to consolidated growth of 9.2%. London s overseas markets are expected to generate about 58% of the additional volume in 2014. International visitor numbers are forecast to grow 6.7% in 2014, with subsequent growth slowing to 4.4% in 2015. The domestic market should respond to improving conditions in the UK economy, underpinning growth of 2.5% in 2014, and 3.7% in 2015. 7.1 LONDON TOTAL OVERNIGHT VISIT FORECAST 2013 2015 2013 2014 2015 Total 29.3 30.7 32.0 % change 5.2 4.9 4.1 By purpose Business 6.7 7.1 7.5 % change 5.8 5.8 4.9 Leisure 13.0 13.8 14.5 % change 7.2 5.8 5.4 VFR 9.6 9.9 10.0 % change 2.1 3.1 1.8 By origin International 16.7 17.9 18.7 % change 8.2 6.7 4.4 Domestic 12.5 12.8 13.3 % change 1.3 2.5 3.7 Source: London and Partners forecast produced by Tourism Economics: An Oxford Economics Company, 2013 58 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 59

THE FORECAST FOR TOURISM IN LONDON 7.2 LONDON OVERSEAS TOURISM FORECASTS BY ORIGIN MARKET 2013-2016 Visits (million) 2013 2014 2015 2016 North America 2.3 2.6 2.8 3.0 % change 2.7 10.1 8.1 7.3 EU-15 8.5 8.9 9.2 9.4 % change 10.1 4.8 2.8 2.2 Non-EU Europe 2.4 2.6 2.7 2.8 % change 8.8 8.1 3.4 3.2 MENA 0.6 0.6 0.6 0.6 % change 5.2 7.5 3.0 1.9 Latin America 0.5 0.6 0.6 0.7 % change 9.6 10.1 7.4 8.4 Africa 0.4 0.4 0.4 0.4 % change 6.6 4.0 6.0 5.4 Asia Pacific 1.9 2.1 2.2 2.4 % change 8.0 8.8 7.5 6.9 Total 16.7 17.9 18.7 19.4 % change 8.2 6.7 4.4 3.9 Source: London and Partners forecast produced by Tourism Economics: An Oxford Economics Company, 2013 Latin American visits make up 3.2% of London s total, having grown by two-thirds since 2009. Brazil has been mainly responsible for fuelling tourism growth and by 2016, London could be welcoming a further 152,000 visits from this region, representing 28% growth. Countries such as Mexico and Argentina are beginning to appear around the edges of London s visitor economy, and these can be expected to make a growing contribution to regional growth. The trend for Middle East and North Africa has tended to be driven by the performance of the UAE, the region s largest contributor. The country has now recovered from 7.3 London tourism forecasts by origin market 2014-2016 12% 10% 8% 6% the 2009 Dubai financial crisis, and moderate growth is expected over the next three years. As with several other main areas of geography, the next three years will see growing contributions from a number of the individually small, but rapidly growing, tourism markets such as Qatar and Kuwait. The outlook for Africa (2% of visits) is looking more positive in the wake of the Egyptian crisis. Beyond 2013, strong underlying conditions in markets such as Nigeria and South Africa, as well as some dynamic economic growth projections for several much smaller countries in the African continent, should stimulate solid growth up to 2016. SOLID PROSPECTS IN LONG HAUL MARKETS As the prospects for the USA s consumer and business economies brighten, demand for London as a destination for North American tourists looks positive in 2014, with forecast growth of 10.1%. By 2016 visit numbers from North America to London are predicted to increase by 27%, an additional 645,000 visits. Currently the Asian Pacific countries comprise about 11.5% of all visits, but strong growth of 25% is also anticipated from this region in the next three years. This will be led by strong growth from Australia and India, the two largest source markets in this area. South Korea, China and the rapidly expanding economies of South-East Asia can be expected to make a sizeable contribution to regional Asian growth. 4% 2% 0% Asia Pacific Africa Middle East Non EU Europe EU Europe C. & S. America Source: London and Partners forecast produced by Tourism Economics: An Oxford Economics Company, 2013 N. America 2014 2015 2016 60 LONDON TOURISM REVIEW LONDON TOURISM REVIEW 61

CONTACTS Head of Strategy Insight and External Affairs Alex Fong afong@londonandpartners.com Tel: +44 (0) 20 7234 5800 Tourism executive Mariella Southgate msouthgate@londonandpartners.com Tel: +44 (0) 207 234 5883 London & Partners 6th Floor 2 More London Riverside London SE1 2RR londonandpartners.com 62 LONDON TOURISM REVIEW