House of Commons - Administration

Select Committee on Administration First Report

APPENDIX TO THE REPORT

Report by the Visitor Manager

LINE OF ROUTE TRIAL

6 August—29 September 2001

CONTENTS

SECTION 1 EXECUTIVE SUMMARY

1.1 Duration and Volume

The tours were offered between Monday 6 August and Saturday 29 September:

26 full days x 3,000 places =78,000 places.

20 half days x 1,500 places =30,000 places.

Less the allocation for the Autumn Visits Schools Programme, 3,855 places.

Total = 104,145 places available for sale.

3,000 tour places were lost when Parliament was recalled on 14 September. A further 625 places were lost due to a fire evacuation on 15 September. Refunds were given and incurred extra cost.

1.2 Total visitors amounted to 86,284. This represents a +110 per cent increase on last year's figures. 51,102 (59 per cent) were sold by the temporary Ticket Office which was created in Westminster Hall. 35,182 (41 per cent) were sold by Ticketmaster and their outlets who were contracted as our Sales Agency for the period of this Trial.

1.3 Estimated Result [After VAT]

	2001 £	2000 (6 wk opening) £
Total revenues	£325,023	£258,542
Expenditure	£524,385	£468,153
Deficit	£199,362	£209,611

NB Provisional figures at 5.12.01.

1.4 The subsidy, reached by dividing the operating deficit by the number of visitors, (contribution funded by Parliament) per visitor was £6.26 in the year 2000. This year this subsidy was reduced to £2.31 per visitor.

1.5 Visitors' Reaction

Visitor reaction was again tested. The abnormally high response rate that we experienced last year was repeated. The normal visitor response rate to any tour of a museum or attraction is between 2-5 per cent. At more than 8 per cent, ours was very high. We analysed 4,000 selected comment cards and written comments in our visitors' book. These revealed that:

— 95 per cent of visitors said that the tours had greatly exceeded their expectations.

— 16 per cent of visitors said that they had difficulties with the ticketing and associated queuing and sales systems.

— 3 per cent said that they were too rushed on the tour and wanted more time. 4 per cent said they wanted to see more of the Palace.

— Just over 1 per cent criticised the facilities. In particular the lavatories and lack of seating for the elderly. Many of these comments were noticeably vehement.

1.6 Visitor Profile

A similar analysis has been carried out on the authorship of the written comments. This showed that at least 50 per cent of these came from overseas visitors. This, together with our own observations and the demand for language tours, validates the view that at least 50 per cent of visitors came from abroad. At over 43,000 this represents a 500 per cent increase on the previous trial, where only 8,000 visitors came from abroad. Visitors from the UK regions outside the southeast also increased by 20 per cent.

CONCLUSIONS

1.7 As a trial the exercise worked well. A great deal more was learned about how to run a guided-tour operation based on a throughput of 3,000 visitors a day. Experience was also gained in how to manage an in-house ticket office and also how to cope with site disruption and plan around it.

1.8 The Chairman of the Administration Committee addressed the House of Commons on 26 February 2001. The Chairman made reference to the 2001 business plan that had been put to the Steering Group and the 85,000 visitors that the plan required to remain within the planned deficit limit of £230,000. Furthermore, this plan was based on the assumption that market conditions would be stable. This was not the case. Furthermore the plan reflected the need for much higher productivity. The result shows this was achieved. This could not have been done without the longer working days and the very hard work put in by the temporary staff that were employed by the team.

1.9 Clearly the enthusiasm of the public be they British or overseas visitors is completely undiminished despite the events that have influenced tourism elsewhere in the UK this year. The very positive response seen last year was repeated. Once again we received a very high response rate from our visitors. Over 5,000 comments cards were completed and from the 4,000 that were analysed these comments reveal a depth of feeling and enthusiasm that is, in all probability, unrivalled by any other attraction in this country. More than 95 per cent of these comment cards said that the tour exceeded their expectations. Particular praise was reserved for the Blue Badge Guides.

1.10 The view of the 120,000 visitors over the past two years will create an expectation in the market, and the received view was that they would recommend a visit to 10 others, creates a potential market of 1.2 million.

1.11 Many visitors commented on the level of the administration fee at £3.50, which was seen as a ticket price. Many made comparisons with the nearby London Eye, Buckingham Palace and the Tower of London, charging a great deal more at £7.45, £11.00, and £10.50 respectively. There is no doubt that this fee could be increased without causing resentment amongst visitors.

1.12 The ticket office proved a difficult operation and it should not be repeated on a temporary basis. The location, requiring as it did, a security clearance for visitors before purchase, proved frustrating for both the queuing public and the police. The office was undermanned for peaks and under resourced. There were long queues. Visitors were frustrated by having to clear security both at St Stephen's and Black Rod's Garden before starting their tour. Any permanent solution needs careful evaluation.

1.13 The tour assembly at Black Rod's Garden Entrance was uncomfortable and noisy. The building works around the area made the whole assembly experience unpleasant and sometimes dangerous. It is clear that we could not have anticipated either the withdrawal of the use of the Victoria Tower or the scale of work on Abingdon Road. This should not be repeated in future.

1.14 3,000 visitors a day is clearly the optimum level. Volumes could not be increased further without increasing the opening hours and related costs. The operation could trade more effectively and improve advance sales with tour operators if it was permitted to sell advance allocations at a lower tariff and therefore allow bulk operators to make a margin. This is a matter of policy and needs to be examined in the context of any increase to the Administration Fee. Extension of the tour itinerary to include Portcullis House will reduce volume and slightly increase cost.

1.15 The objectives of increasing foreign visitors and wider penetration across the UK were achieved. This, together with the market demand for foreign language tours, much of which went unfulfilled, confirms that at least 43,000 of our visitors were from abroad. The Ticketmaster sales breakdown shows a 20 per cent increase in sales from the UK regions.

SECTION 2: RECOMMENDATIONS FOR THE FUTURE

2.1 If guided tours are to become a permanent feature at the Palace and form part of the strategy proposed by the Group on Information for the Public then investment will have to be made. It is recommended that a cross-departmental working team be formed, reporting through the current Steering Group to the Committees of both Houses.

2.2 This should include a permanent Visitor Management core team to be established by the Steering Group.

2.3 This team is then to be tasked to report on the establishment of a permanent Tour Management Office by May 2002. Specifically the team should be tasked to produce the following:

— An analysis of investment required in systems, property and staff.

— A Business Plan to support this proposed investment.

— A recommendation on future organisation and role within the Parliamentary management structure.

2002

2.4 Any operation next year will have to recognise the commitment made by the House of Commons Commission to the Golden Jubilee celebrations.

2.5 However 2002 should also be used to test any development work or suggestions put forward by the cross-departmental team. Amongst the changes to be evaluated during 2002 might be:

— the impact of the inclusion of Portcullis House on the tour operation;

— a re-sited Ticket Office and an improved and perhaps alternative Ticketing/Booking System prior to the establishment of a Permanent Tours Office.

SECTION 3: BACKGROUND

3.1 The House of Commons approved the report and recommendations of the Administration Committee on the trial opening in Summer 2000 and agreed to a further trial opening in Summer 2001, operating within the following framework:

— No interference with the Parliamentary Works Directorate (PWD) Summer refurbishment programme.

— No alterations to the Autumn Visits Programme for Schools.

— No interference with the work of Parliament as a working building.

— Visitors should again be charged at £3.50 to cover the ticketing charge and guide services.

— There should be in the planned deficit limited to an absolute maximum of £232,000.

3.2 Recommendations resulting from the 2000 trial included:

— The opening of an on-site Ticket Office.

— The introduction of foreign language tours.

— To introduce a wider sales network across the UK.

— A change in marketing direction to improve sales from outside the southeast region of the UK and overseas: it was hoped that more overseas visitors would improve shop sales.

3.3 A further recommendation was that Portcullis House should be open to visitors at no charge during the annual London Open House weekend only.

3.4 A Steering Group, jointly chaired by the Serjeant at Arms and Black Rod, continued to supervise the management of the trial, with the Visitor Manager leading a cross-departmental project group towards the implementation on 6 August 2001. This is the report proposed by the Visitor Manager on the conclusion of the second trial summer opening in Summer 2001. The reappointment of Michael McDonald and Charles Day, as Visitor Manager and Assistant Visitor Manager respectively, has greatly assisted in making a true comparison with the trial summer opening in 2000 for which they were responsible.

SECTION 4: FINANCIAL SUMMARY [VAT ADJUSTED ]

LINE OF ROUTE 2001—INCOME AND EXPENDITURE ACCOUNT

	Notes	2001 Actual £	2000 Actual £
Revenues
Admissions—Ticketmaster	1	72,520	114,627
Admissions—Direct Sales	1	152,160	5,364
Guidebooks		19,671	10,483
Merchandise	2	80,672	128,068
Total Revenues		325,023	258,542
Cost of Sales
Admission—Ticketmaster	3	39,112	39,634
Admissions—Tourguides	4	171,928	93,497
Guidebooks		18,693	8,408
Merchandise	2	53,078	85,700
Total cost of Sales		282,811	227,239
Gross Operating Profit		42,212	31,303
Operating Costs
Merchandise overheads		18,439	59,587
Staff Costs	4	77,235	65,948
Security		76,838	46,609
Portable Lavatory Hire	5	7,858	8,225
Advertising and Marketing	5	36,106	37,625
Development Costs	5	19,308	18,204
Uniforms	5		1,825
Entertainment			1,074
Contingency Provision			1,817
Communications		5,789
Total Operating costs		241,573	240,914
Net annual Surplus /(Deficit)		(199,361)	(209,611)

Notes:

1. Actual sales exceeded budgeted sales mainly due to the establishment of a ticket office within the precincts of the Palace.

2. Retail of souvenirs was lower than anticipated which is reflected in both the sales and cost of sales figures.

3. Ticketmaster fees were lower than anticipated due to the high proportion of direct sales which attracted a lower commission.

4. Promotional tours and language tours generated guide booking fees that lead to higher than budgeted spend.

5. Lower than forecast staffing levels, plus a high degree of flexibility lead to staff cost savings.

SECTION 5: OPERATIONS

5.1 Black Rod's Garden. At a meeting held on 19 March with PWD, the impact of the summer works programme was reviewed. At the time it was agreed that the contractor, working on the refurbishment of Victoria Tower, be asked to avoid use of the Victoria Tower hoist during our working hours.

5.2 By Easter it became clear that this would incur further cost which PWD could not accept. An alternative holding area for groups in Black Rod's Garden Entrance was proposed. This involved unbudgeted expenditure in both manpower and minor building works (see Financial Summary). Some adjustments were made to the contractor's schedule on the House of Lords car park (World Squares) project. In fact no work appeared to take place in Victoria Tower until 2 September. It is probable that some savings could have been made had this been known in advance.

5.3 Access to Black Rod's Garden Entrance was restricted both by road works in Abingdon Road and made uncomfortable by the consequent levels of noise and pollution. The House of Lords car park work was well confined within a fenced area. The lack of foul weather cover proved uncomfortable on seven occasions when wind and heavy rain made working and waiting conditions very difficult. There was criticism from some visitors regarding both the lack of seating for the elderly and the lack of lavatory facilities. The assembly and access flows were dependent on at least three staff being available at all times and wheel chair and baby buggy handling proved cumbersome. There was no proper storage area for the latter.

5.4 Temporary Ticket Office. The Committee asked that the sales of the tours be expanded across the UK to broaden the visitor base and that a ticket office be established in-situ, to enable visitors to purchase tickets on the day of their visit. The Committee also required an increase in the proportion of overseas visitors in relation to the total visitor base.

5.5 The temporary ticket office was created in Westminster Hall by converting the existing Refreshment Department's souvenir sales kiosk, with two selling positions. A large notice advertising its existence was put up at St Stephen's Entrance. This notice showed availability of tour places to the queues.

5.6 This ticket office was always an interim solution. It involved visitors passing through St Stephen's security checkpoint before buying tickets. In effect this created two queues: one on the pavement and one inside Westminster Hall. This proved both an irritant and a source of confusion, especially when we required visitors to pass through a further security check on entering the Palace at the Norman Porch entrance. This contributed to the relatively large number of critical comments (617) that we received about ticketing.

5.7 Two slim-screen personal computers were purchased, linked to the processor and ticket-printing machines installed and owned by Ticketmaster. A royalty in lieu of rental was paid on this equipment at a rate of 10p per ticket to Ticketmaster.

5.8 At the planning stage maximum sales were calculated on the combined potential of the two sales points. On any day that this maximum was exceeded queues and delays could be anticipated.

Till 1 + Till 2 = ( 30 x 2) = 60 transactions / hour

Average transaction= 2 tickets

Tickets sold / hour = 60 x 2 = 120 tickets / hour

Tickets sold / day= 120 x 7 hours

Total= 840 tickets = Maximum sales / day

This maximum was exceeded on 32 days during the 46 days of the trial. System training was provided by Ticketmaster and the operation of the system proved to be comparatively simple.

5.9 Difficulties occurred in the complexity involved in refunding tickets, because of the low-level technology offered by Ticketmaster system we used. In particular this was true of the link for credit card payments. Daily cash takings of over £4,000 were banked twice a day. The temporary nature of the trial meant that a postal bank account had to be used which gave limited service. Difficulties were experienced in aquiring stocks of paying-in books and even cash reconciliation proved difficult due to delays in receiving bank statements. These issues would be resolved by any future working group which will include a member of the Finance and Administration Department.

5.10 As noted in paragraph 5.8, volumes exceeded the maximum forecast on 32 days of the 46 day trial. Long queues developed during peak times on the pavement outside St Stephen's entrance. This caused congestion which was exacerbated by the roadworks outside.

5.11 The daily operation of the ticket office taught many lessons. An average of over 200 ticket collections a day were dealt with. Queuing constraints, together with only two sales tills, did mean that we could not offer a dedicated pick-up location or queue. One member of staff had to constantly patrol the queue for those collecting pre-purchased tickets to avoid them missing tours because of the long wait.

5.12 Refunds at the ticket office were complicated and difficult. There was no integral credit-card facility on the Ticketmaster system made available to us. This meant that credit-card validity was established separately. Two manual entries on the value of the transaction were mandatory. If a refund was called for, and visitors often spontaneously changed their plans, we were unable to record such a refund on the system despite the fact that it had been made. This complexity, together with a very large volume, further complicated by language problems, led to some discrepancies. These are still subject to reconciliation.

5.13 The system itself stopped and crashed seven times during the eight-week period. The Ticketmaster help service was prompt and effective. However restricted as we were to two sales-points meant large queues rapidly accumulating when this happened.

5.14 Without doubt the operation of this facility proved the most challenging part of the trial. Significantly 16 per cent of the comments analysed identified ticketing as the least satisfactory aspect of the visit. The creation of any permanent facility will need to be the subject of detailed evaluation together with further and more substantial investment. We do not believe that it should be located within the Palace itself.

5.15 The Open House weekend, 22-23 September, attracted 6,500 visitors on Saturday and 6,000 visitors on Sunday. The route through Westminster Hall and Portcullis House was successful although queuing arrangements outside St Stephen's need to be reviewed. The siting of the ticket office outside the environs of the Palace will help to resolve these difficulties in the future.

6. MARKETING AND PUBLIC RELATIONS

6.1 It was possible to plan ahead as the lead-in time for this trial was two months longer than the last trial. Advertising and promotional activity started in February 2001. Given that it was an objective to increase overseas visitors, extensive use was made of the British Tourist Authority recommended media, especially in North America. However this was still too late for tour operators to include in their 2001 marketing publications.

6.2 By the Spring it became clear that the market was in decline, however extensive brochure distribution and direct mail shots took place in North America. An article was put into British Airways' magazine "High Life".

6.3 During the Summer a joint marketing programme with Ticketmaster concentrated on the sales outlets in the UK regions. Many of these are located in record stores. Effectiveness and product knowledge of the sales staff in these stores left a lot to be desired.

6.4 Extensive use was made of direct mail throughout the UK regions. Regional Press Advertising was widely undertaken and a programme was developed with Ticketmaster and the Omega organisation, creating visits sponsored by local newspapers. In June and July advertising concentrated on London based travel publications and London's main press. The budget was limited. Spend fell into the following categories [NB: Figures not VAT adjusted]:

	£
National Press	£7,144
Regional Media	£6,503.78
Travel & Trade Media	£12,466.32
Direct Mail	£9,304.98
Staff Advertising	£928
Sales Promotion	£1,747.95
Point of Sale Material	£1,747.95
Print Costs	£6,760
Total Cost	£46,006

6.5 Several promotional/educational visits were held for journalists, tourism industry staff etc to the Palace. However the ability to create awareness in the leisure market is still inhibited by low budget provision.

6.6 A press conference was held at the Palace in March. The attendance was disappointing and coverage poor. It was felt that it was too far in advance of the event.

6.7 Media coverage in July was good. The opening was shown on SKY NEWS, GMTV and BBC London Live (Robert Elms) and "The Afternoon Drivetime Show".

7. RETAIL

SYNOPSIS

The merchandising operation was significantly smaller than in the summer of 2000, in line with the experiences and findings of last year. The most noticeable difference was the reduction in the number of souvenir lines for sale (reduced from 124 in 2000 to 47 in 2001). Based on experience in 2000, the range offered was aimed at the lower spend market and was again made up of souvenirs from both Houses of Parliament.

The top 20 selling items, by volume, are shown in the table below:

	Product	Sales Price	Sales Qty	2001 Ranking
1.	House of Parliament Postcard (Small)	£0.10	8,024	1.
2.	Guide Book (Jarrold)	£2.50	5,432	n.a.
3.	Palace of Westminster Post Card Pack (10)	£1.50	2,118	2.
4.	Pencil—HOC	£0.30	1,949	3.
5.	Bookmark	£1.00	1,807	5.
6.	Pencil—HOL	£0.30	1,790	4.
7.	Chocolate Mint Creams—200g	£2.90	1,690	7.
8.	Travel Sweets, Palace of Westminster—200g	£2.10	1,647	n.a.
9.	Whisky Miniature—5cl	£1.80	1,583	6.
10.	Gel Roller Pen—Palace of Westminster	£1.70	1,401	9.
11.	Chocolate Coin—90g	£1.95	1,330	n.a.
12.	2002 Diary	£3.85	1,105	10.
13.	Milk Chocolate Bar—85g	£1.50	1,095	/
14.	Jotter Pen	£2.50	918	12.
15.	Leather Key Fob	£1.20	769	17.
16.	Linen Tea Towel	£3.00	759	15.
17.	Whisky—70cl	£14.50	685	20.
18.	Mini Teddy with Rucksack	£2.70	639	13.
19.	Pill Box	£4.50	623	14.
20.	Ruler—HOC	£0.85	613	/

It is worth noting that despite the different visitor profile achieved this year, 15 of the 20 most popular souvenir items were also ranked in last year's best selling list. In common with last year, the vast majority of the most popular items retailed at a price of less than £3.00.

OBSERVATIONS AND RECOMMENDATIONS FOR THE FUTURE

7.1 Operationally, the layout and dimensions of the sales and display areas worked well. The aesthetics of the merchandising outlet require some enhancement, so as to capture greater numbers of departing visitors.

7.2 Considering the high proportion of international visitors participating on the tours, for whom English is not their principal language, a move away from the catalogue style retail outlet process should be taken, unless order forms, guidance notices and signage are accommodated in a variety of international languages.

7.3 The House of Lords Refreshment Department should make a greater contribution to the Line of Route Merchandising venture. The operation is designed as a "joint" venture between both Houses. The management, staffing and provision of souvenirs need to be a shared responsibility.

7.4 In general the product mix was popular. Consumers were vocal with their expectations and assumptions of product lines. Distinct gaps for visitor souvenirs are for those that are generic to the Palace of Westminster and not specific to either House. Pictures, paintings and souvenir replicas of symbolic features of the Palace are products demanded by visitors.

7.5 Although there is demand for specific items exclusively available in both Refreshment Department outlets, there is a need and demand for products representative of the visitor experience.

7.6 The design, sourcing and procurement of a separate range of souvenirs specifically geared towards the needs of the Line of Route would require significant investment, both in terms of time and money. Specialist merchandising knowledge, particularly of the heritage market, would need to be recruited or bought in. Such investment would constitute a significant commercial risk, and a direct cost that would need to be included in the Line of Route budgets should this direction be taken in future development of the product range.

7.7 Consistent supervision and staffing of the merchandising outlet is difficult to achieve. Refreshment Department staff can only be redeployed after the needs of all catering services have been covered, and even those staff who can be spared for the Summer Line of Route may not have the ideal skills set, nor be able to work at weekends. It has, therefore, proven essential to make extensive use of external, short-term contracted staff. The main source of such staff this year was from a pool of college/university students, but we encountered severe problems staffing the operation during the latter half of September when the students returned to their colleges. Use of agency casuals would in future overcome this, but there would be an increased cost to the Summer Line of Route.

7.8 The merchandising operation did not achieve projected sales and profit targets. Only 47 per cent of target income was achieved. The principal reason for this stems from the notion that every visitor will spend £2.55, whereas the net average spend per visitor was actually £1.16. Bearing in mind that the actual net average spend in 2000 was £1.00 per visitor, the target appears over-optimistic. In actuality, retail sales represented just 21 per cent of visitors purchasing souvenirs, each spending an average of £5.64.

7.9 When setting sales targets and spends, consideration must be given to the customer profiles of those participating in the Summer Line of Route tours. Visitors to the Houses of Parliament paying only £3.50 may well have very different proportions of disposable income (PDI) to the market segment prepared to pay £11.00 for a tour of Buckingham Palace. If the Line of Route continues next year on broadly the same basis as during the two years trial, a realistic and achievable retail sales budget would, we suggest, be 25 per cent of Summer Line of Route visitors spending a net amount of £6.00 (alternatively put, an average spend of £1.50 per visitor).

7.10 After accounting for staff costs and other operating expenses, the merchandising operation for the Summer Line of Route contributed an estimated net profit of £10,000, a significant improvement on last year's reported loss of £15,000. The Committee will recall, however, that last year's merchandising accounts included expenditure of over £22,000 for the purchase of the sales counters and storage units, which were re-utilised this year at minimal cost. If the Summer Line of Route is continued in future years, financial provision needs to be made for the periodic replacement of these counters.

8. PRICING AT OTHER VISITOR ATTRACTIONS

£5-£10 Admission for Adults

Venue	Admission £	Concessions £	Booking Fees £	Group Rate
British Library	5.00	3.50	—
London Transport Museum	5.95	free	—	10+
Eltham Palace	6.00	3.00	—	11+
Hermitage Rooms	6.00	4.00	1.00	10+
Westminster Abbey	6.00	3.00	—	11
Tower Bridge Experience	6.25	4.25	—	10+
London planetarium	6.50	4.35	0.50	10+
Imperial War Museum	6.50	free	—	10+
Kew Gardens	6.50	free	—	10+
Globe Theatre Exhibition	8.00	5.00	0.50	15+
British Museum (Tour)	8.00	5.00	—
London Aquarium	8.75	5.25	—	10+
London Eye	9.00	5.00	0.50	10+
Dali Universe	9.00	5.00	0.50	40

Source London Tourist Board 2002.

Over £10 Admission for Adults

Venue	Admission £	Concessions £	Booking Fees £	Group Rate
Hampton Court Palace	10.80	7.20	—	15+
London Dungeon	10.95	6.95	—	20+
Tower of London	11.30	7.50	—	15+
Madame Tussaud's	11.50	8.00	0.50	10+
Buckingham Palace	11.50	6.00	1.00	15+

Source London Tourist Board 2002.

GUIDED TOURS TO GREAT STATE BUILDINGS 2001-02

Site	Entrance Charge		Tour Charge/Duration
British Museum	Free		£8.0075 mins
Somerset House	Free		£2.7545 mins
Gilbert Collection	£3.00	+	£3.0075 mins
British Library	Free		£5.0075 mins
Brighton Pavilion	£5.00	+	£1.2560 mins
Westminster Abbey	£6.00	+	£3.0090 mins
St Paul's Cathedral	£5.00	+	£2.5075 mins
Canterbury Cathedral	£3.50	+	£3.5090 mins



© Parliamentary copyright 2001	Prepared 11 December 2001