London economy hit hardest as tourists spending slumps £7.4bn
Central London’s economy has been hit hardest by Covid-19 mainly due to working from home and a sharp drop in tourism.
Major Sidiq Khan commissioned a report today looking into the future of the capital, which shows a profound effect on the Central Activities Zones (CAZ).
The impact is likely to create even bigger challenges for the city than those faced in other major cities like New York and Paris, due to less central residents and more reliance on visitors.
The Arts industry is at particular risk with over 26,000 jobs on the line and London’s night-time economy is also facing huge challenges.
The Mayor of London said: “When London thrives, the whole country thrives, so supporting our city’s businesses to survive the coming months will be absolutely vital.
“With the right support from the government, more businesses will survive and contribute to what this report shows could be a rapid recovery, once tourists and commuters return in numbers.
Tourism slumps
Khan commissioned the research to help City Hall and its partners understand the emerging trends that might affect London’s city centre economy.
VisitBritain revealed that tourist spending in central London was £7.4bn lower in 2020 than the previous year.
According to the report, people returning to the CAZ will give sectors a much-needed boost once the pandemic is over but there are fears that many venues will not survive until then.
Research suggests that London’s night-time economy may need to expand with shops and museums extending opening hours in response to changing working habits.
Matthew Dillon, City Economics Leader at Arup, said: “The impact of Covid-19 on central London has been severe, and without urgent action, there is a risk of significant scarring to the capital’s vibrant and diverse culture and leisure sectors.
“With targeted interventions now, these hugely valuable industries can receive a much-needed boost, and help assist in London’s and the UK’s recovery.”
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