TOURISM MANAGEMENT INSTITUTE
Submission of Evidence to the Culture Media & Sport Select Committee Inquiry
Tourism Investigation
1.0 The Tourism Management Institute (TMI)
1.1 The Tourism Management Institute (TMI) is the professional body for destination managers. Its 350 members are in the main practising tourism destination managers in national, regional, sub regional and local tourism and destination management organisations, from VisitBritain to local authority tourism teams. Affiliate members include a number of higher education tourism and destination departments, and suppliers of services to destination management. Further details about TMI can be found on the Institute’s web site, www.tmi.org.uk
1.2 This memorandum has been specifically prepared for the Select Committee Inquiry following e-mail consultation of our members. Responses were received from members in Regional Development Agency tourism teams, local authority tourism officers and consultants from a range of destinations across England, Wales and Scotland. It considers each of the issues on which the Committee requested evidence. Members’ responses are summarised below.
2.0 The challenges and opportunities for the domestic and inbound tourism industries,including cheap flights abroad, and their impact on traditional tourist resorts.
Challenges
2.1 TMI members believe that the main challenges confronting the UK’s tourism industry concern competitiveness and product quality. Competition will become increasingly fierce in the coming years from an increasing number of alternative lower cost destinations that are perceived as offering a better experience in terms of interest and quality. It will also come from alternative demands on peoples’ increasingly limited free time.
2.2 Many of the factors that have traditionally been held up as securing tourism’s long-term growth have been challenged in recent years:
2.4 Increased leisure time by the move towards more pressured lifestyles, longer working weeks and later retirement;
2.5 Increased affluence, particularly in retirement, by the increasing number of people living longer but without adequate pension provision and facing spiralling fixed home costs;
2.6 Increased wish to travel by the growth of other forms of interest and status and increasing awareness of the environmental harm caused by many forms of transport;
2.7 Increased safety as the world becomes a smaller place by the perceived growth in global terrorism;
2.8 Increased ease of travel by greater congestion particularly in developed countries.
Specific challenges include:
2.9 Cheap flights continue to undermine the ability of the UK to market itself as a competitive destination for short breaks, to UK residents.
2.10 The already high cost railway and road system being exacerbated by the possibility of road pricing being introduced on motorways and major highways. Will this lead to a clogging of the secondary road system?
2.11 The UK’s reliance on a light touch regulated product offer in accommodation, restaurants and attractions meaning that many sub-standard businesses continue to trade.
2.12 The continued decline of towns dependent on traditional leisure markets.
2.13 The potential decline of towns and cities dependent on retail as increasingly low margins and the move towards web based shopping lead to clone high streets and the inexorable rise of out of town malls.
Opportunities
2.14 Cheaper inter-city rail travel would help to encourage UK residents to take rail breaks in the UK rather than be seduced into flying abroad through cheap pricing.
2.15 There is scope for Visit Britain and gateway destinations in the UK to use the low cost carriers to more effectively generate inbound tourism. This will need a strong local need but core support from the national level.
2.16 More traditional resorts need to embrace their distinctiveness and local culture and harness the energy from the many artists and creative businesses which have chosen to locate to seaside towns in recent years. Brighton and Whitstable are two good examples of destinations re-emerging through the celebration of local creative energy.
2.17 Traditional resorts will also need to embrace one the most potent and sustainable trends in global tourism -people travelling for well-being and “self-fulfilment” to places where they can relax, get healthy and escape the stresses of modern life. There is no better place than the seaside to detox from the world.
2.18 Visit Britain should be identifying the “emerging” destinations more and pushing marketing resource around these rather than just towards the honey-pots. This will allow tourism to grow and thrive rather than become stagnant around the same messages and destinations.
2.19 The need to continue to learn lessons from abroad – in terms of marketing panache, destination development and improving public transport.
2.20 The completion of the Cross Channel rail link and expansion of Eurostar services across the country from 2008 will be a great opportunity for linking core city destinations through rail itineraries and rail holidays – an underdeveloped area compared to other major destinations in Europe.
2.21 Though it makes sense to retain traditional images and messages to emerging markets in Asia and Eastern Europe, more mature markets (US, Western Europe) need to be supplied with fresh images and ideas. The Spanish lead with “passion”, the Irish with “charm”. Perhaps the British (and certainly the English) should lead with humour and creativity.
3.0 The effectiveness of DCMS and its sponsored bodies (such as VisitBritain) in supporting the industry.
3.1 TMI members feel that the tourism reform programme initiated by this government has had mixed results.
3.2 We acknowledge that Visit Britain is doing an effective job at marketing Britain overseas. However, the abolition of the English Tourism Council and the devolution of responsibility and funding to the Regional Development Agencies has left a strategic gap at a national level for tourism policy and development. Visit Britain has struggled to manage and drive forward the quality, tourism statistics and tourist information agendas because we feel that it has had difficulty in diverting focus, attention and resources from its strategic marketing remit.
3.3 However, we do feel that Visit Britain could do more to support destinations in their promotional activities. The requirement for Visit Britain to develop its income generation levels results can result in it competing with destinations for industry marketing spend. There is a feeling from our members that there are opportunities for Visit Britain to help destinations promote their websites (for example) at no-cost, rather than only promoting product that has bought into (often costly) specific campaigns.
3.4 The ability of DCMS to ‘champion’ and advocate the importance of tourism at a national level is weak. Tourism is a minor player within DCMS and without the benefit of a tourism minister the voice of the industry within government is limited. Since 1997 DCMS has diverted funding towards Sport England (114% increase) and the Arts Council (111%) and away from Visit Britain (9%). Taking into account inflation, this has resulted in a 17% decrease in funding for Visit Britain, in real terms.
3.5 The DCMS ‘tourism team’ appear to be fully consumed with licensing and London 2012, leaving little opportunity to develop a better understanding of the issues facing the tourism industry and how they can support them. This has resulted in a feeling by TMI members that DCMS has done little to help local authorities and destinations retain their commitment to tourism services.
3.6 The links between tourism and other elements of the DCMS portfolio (culture and sport) are important. But they are no more important (and indeed arguably less important) than the links with the local authority’s place-shaping agenda (DCLG), with improving training and skills in the industry (DES), with delivering high value exports and inward investment (DTI), and with environmental and rural conservation issues (DEFRA). TMI members feel that either DCMS should begin to take seriously its role as the champions for tourism as an industry or the responsibility should be passed to the Department for Trade and Industry.
4.0 The structure and funding of sponsored bodies in the tourism sector, and the effectiveness of that structure in promoting the UK both as a whole and in its componentparts.
4.1 This question focuses primarily on ‘promotional effectiveness’, however, it needs to also cover tourism development, quality and skills issues, as these are also fundamental to a thriving tourism industry. A poor product will not sell, however much money is thrown at promotion.
4.2 The support structure for tourism has undergone massive change since the strategic lead for tourism in England was given to the Regional Development Agencies in 2003. TMI members understand that this was aimed at mainstreaming tourism within economic development activity; encouraging greater private sector involvement and reducing local authority tourism duplication and overlap through the formation of public/private sector partnership Destination Management Organisations; and providing greater marketing resources for overseas promotion.
4.3 All nine regions have developed different models to seek to meet these objectives. This has caused significant upheaval for TMI members; a great many of whom have had major changes to their roles and/or employers in the last four years. RDA leadership and support for tourism development has been much stronger in some regions than others. TMI members in the North and Midlands are more likely to feel that the change has been positive as central government has diverted funding to regions with higher levels of deprivation. Where Destination Management Organisations (DMOs) are receiving strong support from the RDAs there is optimism and members have positive expectations for future improvements. However, this will be contingent on maintenance of expenditure on tourism by all parties (DCMS, RDAs and local authorities). The implications of the Comprehensive Spending Review could therefore be dramatic and it is unlikely that the private sector will be able to make-up any funding shortfall within newly created DMOs.
4.4 However, the new structures did result in the creation of geographical regions that do not make any sense to the consumer. This has in some cases led to a shift from the promotion of small local authorities as destinations that have no ‘brand recognition’ to the promotion of whole regions that don’t either. Marketing activity is still too often led by the narcissistic aspirations of the funding organisations rather than focussing on generating consumer interest in recognised destinations or products. Although, we do recognise that there has recently been movement in some regions towards addressing this problem and support this development.
4.5 There is also a feeling that there is still a gap at a national level for promoting England to the domestic market and that the current England Marketing Advisory Board should be evolved to include representatives from local government, the regions and the private sector into a more effective stakeholder body.
4.6 However, whilst all these major changes have taken place, DCMS has given the appearance of being neutral to the changes. Far from leading the agenda, it has struggled to keep up and has issued no guidance to the RDAs about best practice or key improvement measures. We are left asking ‘why does the responsibility for tourism remain with DCMS when regionally it sits with RDAs that have an economic development role?’
4.7 The biggest impact of the changes has been for the local authorities who have sometimes felt as the ‘whipping boys’, held responsible for all the mistakes of the past. In fact, they have often been the only consistent source of public sector investment in tourism for the last 40 years. None the less, most local authorities do recognise the need for them to review their role in tourism and this is being fostered by working being done through Partners 4 England and through the Lyons Enquiry. This is leading to a greater understanding and recognition of the local authorities’ vital and unique place-shaping role.
5.0 The effect of the current tax regime (including VAT and Air Passenger Duty) and proposals for local government funding (including the “bed tax”) upon the industry’scompetitiveness.
5.1 As outlined in 2.1 the UK is known to be expensive and it doesn’t compensate for that with quality, distinctiveness or value for money - unlike Italy which is expensive but offers that extra va va voom! So existing and additional taxes will always be a ‘hold back’ during the decision-making process (domestic and overseas).
5.2 While TMI members recognise that additional funds to support UK tourism need to be sourced somewhere the problem with suggestions such as changes to APD and the introduction of bed tax is fundamentally that they are skewed towards certain customers and that there is no guarantee that new funds generated would be re-allocated towards the purpose given for its collection. Tourism interests have highlighted the amount of income generated for the exchequer by VAT payments from visitors for many years yet only a tiny fraction of this has been invested by successive governments in measures designed to grow the market although this would of course lead in turn to increased receipts.
5.3 TMI members are widely opposed to bed tax for the reasons articulated by the Tourism Alliance and the points made above: research by Nottingham University shows that a 1% rise in prices relative to other countries leads to a 1% decrease in international tourism; research by VisitBritain has given a higher (1.4:1) loss ratio for international tourism.
5.4 However they have particularly identified the unfairness of bed tax concentrating new income generation on the sector of the industry, accommodation providers, who already contribute most to effective marketing partnerships with destination organisations.
5.5 Many TMI members recognise the value in having an element of the taxation burden for the provision of local services used by and marketed to visitors paid by visitors rather than wholly by local tax-payers through Council Tax and Business Rates. They recognise that in many parts of the world an element of local taxation is added to each local sale because they see it on sales receipts often with an explanation of how the funding has been hypothecated. Whilst a local sales tax in the UK would create its own problems, not least in driving up costs, it would have the benefit of being applicable to all sectors and would have the potential to be transparently used in support of local service delivery.
6.0 What data on tourism would usefully inform Government policy.
6.1 The inability of DCMS to implement the findings of the Allnutt Review of Tourism Statistics has been very disappointing. However, we feel that this may well have been a result of devolving far too much responsibility to the regions and not retaining the ability at a national level through its own powers or that of its sponsored agencies to implement initiatives that would benefit the national tourism industry.