Tourism and retail chiefs call for Chinese visa overhaul to drive £340m boost to UK economy

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Giving Chinese visitors longer visas would bring more than 250,000 high-spending tourists into the UK each year, boosting the economy by hundreds of millions of pounds, according to an alliance of British retail and tourism businesses.

The UK China Visa Alliance (UKCVA) – which includes business members such as Global Blue, London First, McArthurGlen Group, New West End Company, Walpole and Worldpay – is calling on the UK government to make 10 year visas the default offering to Chinese visitors and drop their cost from £737 to just £135.

Currently the UK issues nearly 400,000 visitor visas in China each year – the majority of which are provided at a cost to the taxpayer and grant visitors access for just 6 months. The UKCVA proposals would see the costs of provision cut while also encouraging more visitors to our shores.

UKCVA analysis shows its plan would:

  • Boost annual visitor numbers from China by nearly 265,000 each year
  • Generate around £337m in additional revenue for UK businesses.
  • Hand the Home Office a £19.5m saving each year in visa administration costs

The boost to UK businesses of increased numbers of Chinese visitors would be expected to come from higher spending by this group – with research from the tax free shopping network Global Blue showing that in August this year Chinese visitors spent the second highest of all the nations recorded per visit to London (£1,196 per visit), only second to visitors from Qatar (£1,352 per visit), with retail areas like Oxford Street offering extremely attractive brands to shoppers from the region.

UKCVA’s recommendations come at a time when UK-China relations are particularly strong; Chancellor George Osborne has just returned from a visit to the country and the Chinese President, Xi Jinping, is due to visit Britain in October.

Lessons from the USA

The estimates are based on a similar move the USA, which saw the numbers of visas issued in China grow by 68% in the first two months after introduction.

In December 2014 and January 2015, the USA issued 351,650 visas in China compared to only 209,100 over the same period the year before, without compromising their security measures and border enforcement measures.

The UKCVA believes that this uplift would be mirrored in the UK by making the process of combining a visit to European destinations with one to the UK easier and cheaper for Chinese travellers. In 2014 1.4m Schengen visas were issued to Chinese visitors, while only 390,000 UK visas were issued – demonstrating a market which would be expected to respond positively to UKCVA’s initiative.

If predictions are correct, this would result in an extra £337m spent by Chinese visitors in the country each year, based on VisitBritain’s estimate of the amount spent by Chinese visitors in the UK in 2014.

Lowering costs

It currently costs around £135 for the Home Office to process every visa application, regardless of their duration.  With six month visas costing visitors just £85, the UK therefore subsidises each of these applications by £50.

In 2014 the UK issued 390,000 visitor visas in China, the majority of which were for six months, creating a net cost of £19.5m to the taxpayer.

At £737, 10 year visas are deemed a considerable investment for Chinese visitors, particularly in addition to the cost of a Schengen visa. The UKCVA proposal would see the cost of 10 year visas reduced to £135 to cover the administration fee and provide some additional income.

With the purchase of a 10 year visa, Chinese visitors could be free to travel the UK and also the rest of Europe for a decade with only one more visa required per trip – increasing the attraction of repeat visits and streamlining the administration process facing prospective tourists. It would also ensure that Chinese nationals with family living or studying in the UK could travel more regularly to the UK for a much more affordable price.

New West End Company, which represents West End retailers and is a founding member of UKCVA, is one of those organisations championing the initiative. Its chief executive, Richard Dickinson, believes the opportunities resulting from such a change could be seized by businesses across the UK, and would build on the Alliance’s existing successes in campaigning for changes to the visa application process.

He said: “A move to make 10 year visas more affordable would help bring high net worth tourists to our shores and allow us to ward off competition from other global destinations.

“It is proving uncompetitive to force Chinese visitors to obtain two visas every time they wish to visit the UK and Paris. Instead, this move will draw in thousands more tourists every year, and save millions of pounds in administration fees at the same time.”

John Dickie, director of policy and strategy at London First, a founding member and the primary funder of UKCVA, said: “The changes we have suggested would be a win-win for the government and for businesses.

“Not only would they give us a bigger share of the world’s largest tourist market, they would encourage these lucrative visitors to come back again and again.

“It would be another step in the right direction for a government that is building a good record in this area, as demonstrated by its efforts to streamline the UK and Schengen visas process.”

Gordon Clark, head of commercial UK and Ireland, at the tourism shopping tax refund company Global Blue, said:  “Tax Free shopping sales in Europe with the Chinese from Global Blue’s data is growing at +75% for the first 6 months in 2015 but the UK is only growing at +4%. We need to look at ways of encouraging these luxuriate shoppers to come to the UK to do their shopping and start to compete with our European neighbours.

“By offering an improved more affordable 10 year Chinese visa will help encourage more Chinese visitors to the UK and saving the Government £19.5m in visa administrations costs.”

Michelle Emmerson, chief executive at Walpole, said: “As part of The UK China Visa Alliance, Walpole is committed to the proposed 10 year visas for Chinese visitors. The potential positive impact this proposal could have on boosting the UK economy must not be overlooked.

“As the second highest spenders of all tourists to the UK, there is huge potential in encouraging further Chinese visitors to the UK and creating Britain as the destination for Chinese luxury consumers.”