Viability and the long-term future of capital
projects
22. From the beginning, the Commission claimed to
have paid careful attention to the viability and long-term future
of its projects. However, Mr Smith conceded that initial difficulties
had been experienced in examining those issues. The Commission
tried to improve its monitoring processes, in response to difficulties
encountered by some of the earliest grant recipients, through
a programme of business operational reviews. Those reviews examine
each of the projects during construction and as they approach
completion. Mr Smith explained that the reviews examined "the
assumptions on which the original grant was given are ... holding
good".[72]
Operational reviews have been broadly welcomed by project managers.[73]
23. Mr Mike O'Connor, Director of the Millennium
Commission, emphasised that only 25 per cent of the capital projects
depended on paying visitors.[74]
Nevertheless, the robustness of visitor number forecasts will
be central to their viability. Mr Smith admitted that the Millennium
Commission had been "brought ... up sharp in terms of not
automatically accepting the visitor projection figures that were
in the original application".[75]
Long-term viability of those attractions depends upon repeat visitors.
Both @Bristol and the National Botanic Garden of Wales noted the
likely impact of their respective locations on their ability to
attract repeat visitors.[76]
Capital projects that are visitor attractions are entering an
increasingly cluttered and competitive market and are subject
to the pressures that affect all visitor attractions.
24. Both the domestic and the incoming tourist trades
have suffered recently as a result of a combination of factors.
Mr David Quarmby, Chairman of the British Tourist Authority and
NMEC, explained the impact of the strength of the pound on both
the outward and incoming tourist trades.[77]
He also observed that there has been a growth in the number of
tourist attractions and that the capital projects therefore faced
a "shrinking market to go round an even greater number of
visitor attractions".[78]
Research by the English Tourism Council indicates that demand
for visitor attractions is slowing.[79]
However, Mr Smith referred to a publication from the Henley Centre,
which suggested that "visitor numbers for attractions in
general are likely to rise over the next few years".[80]
He went on to list some of the capital projects that had opened
and exceeded their visitor forecasts.[81]
He told us that the Commission was assessing the long-term prognosis
for each of the visitor attractions and explained the importance
of the management team and the need for constant rejuvenation
for the attractions to succeed.[82]
72 Q 446; Evidence, p 124. Back
73 Evidence,
pp 149, 159, 172. Back
74 Q
475. Back
75 Q
446. Back
76 Q
135. Back
77 Q
219. Back
78 Ibid. Back
79 Evidence,
pp 223-224. Back
80 Q
451; See also Leisure in the new Millennium, The Henley
Centre Report for the Joint Hospitality Industry Conference, July
2000. Back
81 Q
443; Evidence, p 144. Back
82 Q
471. Back
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