Research published by Sadiq Khan shows central London’s economy has been hit hardest by Covid-19, largely due to home working and a sharp drop in tourism.
Tourism spending fell by £10.9bn in 2020 compared to the year before, with more than 26,000 jobs at risk in arts and culture alone and the night-time economy also facing huge challenges.
Central London contributed £38.7bn to the Treasury before the pandemic struck, and any extended slowdown will be felt across the country.
The impact is likely to produce bigger challenges in London than those faced in other major cities including New York and Paris, due to fewer centrally-located residents and more reliance on visitors.
Arts and Culture 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.”
Drop in tourism
Khan commissioned the research to help City Hall and its partners understand the emerging trends that might affect London’s city centre economy.
Many businesses and jobs in London’s sectors are at threat due to the growth in home-working, social distancing needs and a collapse in tourism.
VisitBritain revealed that overseas tourist spending in central London was £7.4bn lower in 2020 than the previous year, and domestic tourism down £3.5bn.
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.”