Examination of Witnesses(Questions 40-59)
MR DAVID
QUARMBY, MR
TOM WRIGHT
AND MR
BERNARD DONOGHUE
TUESDAY 5 NOVEMBER 2002
40. Is that ring-fenced for the whole of the
Britain? You are not ring-fencing just for England.
(Mr Quarmby) The new organisation will operate under
a regime where there will be two distinct funding streams which
will be embodied in our funding agreement. One funding stream
will be for overseas marketing. The second funding stream will
be for the domestic marketing of England and the accounting arrangements
within the organisation will enable the use of those funds to
be completely transparent. The third point to add is that there
will be strengthened accountability of the new organisation to
the Scottish Parliament and the Welsh Assembly to enable this
accountability to be made very clear.
41. Are you happy with this arrangement?
(Mr Quarmby) We were not the architects of the new
arrangement.
42. I take it that is a no.
(Mr Quarmby) No, I am not saying that. I am saying
I believe it is entirely workable and we are very confident about
the way in which the new role can be brought about. It will complement
our new overseas marketing strategy and I am encouraged by the
warm response we have already had from the industry and indeed
the recognition—I perhaps would not use the word support—but
certainly the recognition and acceptance by the leaders of the
devolved administrations in Scotland and Wales expressed in press
statements they made last week.
43. How does the amount of money you have available
for the promotion of Britain overseas compare with other similar
countries in Europe and elsewhere in promoting their countries
overseas?
(Mr Quarmby) In a normal year—and 2001-02 was
not a normal year for reasons we know well—we have £35-£36
million. To that we would normally add perhaps up to £15
million of partner funding from companies, regions, local government,
area tourist boards in Scotland, who come alongside us for our
marketing activities overseas, giving us total disposable funds
with our partners of about £50 million in a normal year.
I do not have immediately to hand, but we can let the Committee
know in writing afterwards, the exact amounts made available to
other national tourist offices, but we do not have many grounds
for complaint. There is no similar national tourist office which
spends more than we do and certainly France and Spain have similar
amounts, I believe.
(Mr Donoghue) In your inquiry last year the Committee
noted the fact that the grant to BTA has been standing still for
about five years and you noted that with regret. You also noted
something you had identified a couple of years previously, that
some of the domestic marketing budgets for some of the North American
states were in some instances two to three times larger than the
amount for the whole of the promotional budget of the United Kingdom.
You also noted that with regret. We share that regret and one
of the things we are keen to do is to make sure that even though
we cannot outspend our competition overseas, we can out-think
them. It means that we have to work harder for the same kind of
results. For example, the New Zealand Tourist Board, which is
a very successful tourist board on the global stage, achieves
85 per cent of all of its inbound tourists from just four markets.
We achieve 85 per cent from 27 countries, therefore we have to
work harder to get those people into Britain to achieve the same
income generation. One of the interesting things here, looking
at the overall balance of payment deficit, is to try to close
that gap as quickly as possible. Some of that can be done by encouraging
British people to holiday at home, but some of that will inevitably
mean spending more on getting people over here.
44. That seems to be in direct conflict with
what the chairman has just said. You said you had to work harder
to achieve that same input. You have compared it with states in
the United States, yet the chairman says he is very satisfied
with the amount of money he has.
(Mr Quarmby) For me the test is how the Government
responded during the crisis year 2001-02. The Committee will be
aware that the first tranche of money happened within days when
my colleagues appeared before you in April last year. Government
made available an additional £14 million to fight the foot
and mouth crisis and then made available on a matching fund basis
a further £20 million in February of this year and the industry
was able to match that and they exceeded it. So for the last several
months we have been running with the industry a £45 million
campaign overseas to get people back to Britain. I believe that
has demonstrated the Government commitment to promoting inbound
tourism to this country and I am very satisfied with that.
Chairman
45. I am the last person in this room, possibly
the last person in the world, to criticise the Government, but
a response to a crisis is very different indeed from a long-term
strategy. When this Select Committee last visited the United States
on a major tourism inquiry, we discovered that the British Tourist
Authority had less money to spend in promoting tourism in the
whole of the Americas than was spent by the State of Virginia.
(Mr Quarmby) That indeed was illustrated by my colleague;
that is perfectly true.
Mr Flook
46. I hope you will agree that the top hotels
in this country are very important in drawing in tourists from
abroad. You may or may not know, but we have had a flurry of letters
to the Committee from some of Britain's hoteliers, begun by Mr
Skan of the extremely well renowned Chewton Glen Hotel. From my
previous background I would accept that PR and marketing are a
very important third party endorsement. On the basis that these
hoteliers are not normally renowned for being shy and retiring,
why was it that nobody knew who you were, Mr Quarmby? When 50
of the top hoteliers in the land were present at a meeting in
London a question was put: what is the name of the current chairman
of the BTA? Mr Skan writes that no-one knew.
(Mr Quarmby) I have no idea. You had better ask them.
The organisation does not exist to put me up front. The organisation
exists to promote Britain and for me that is the test of our effectiveness.
47. Mr Skan's letter also goes on to say that
there is a large element of bureaucracy and mediocrity within
the BTA. To what extent do you agree with him?
(Mr Quarmby) It is difficult for anybody who is responsible
for an organisation to have the perspective of somebody looking
in. What I can reference is the quinquennial review which the
Government carried out of the BTA, which reported in the summer
of last year, which was on the whole pretty complimentary about
our efficiency, about our effectiveness and that was not just
based on their judgement but based on an extensive trawl which
they made of a wider range of our stakeholders. We also monitor
the opinions and attitudes of our stakeholders to the BTA on a
fairly regular basis and where there are deficiencies, we address
them. My reading is that on the whole our stakeholders, whether
they are our partner tourist boards, whether they are the industry
here in the UK, whether they are the industry overseas, are reasonably
satisfied with the service the BTA provides. We can always do
better and if anybody has any specific complaints about us, of
course we must attend to that.
48. I hear what you are saying, yet one of the
other missives we have had is from Kit Chapman at the Castle Hotel
in Taunton. As we all know, he is not a shy or retiring individual,
though I must declare an interest in that he is a good friend
and the Castle is an excellent hotel with a first-class restaurant.
I am sorry to say that most of these letters do address the new
BTA chairman with the new proposed arrangements. Mr Chapman writes
that the new chairman needs to be perceived as an international
super host, a roving ambassador with a passion for Britain and
an ability to communicate a vision and a mood which is uniquely
British. It seems to me that he is really referencing back to
what is going on at the moment, so it is hardly a ringing endorsement
for what is going on with the British Tourist Authority as it
stands at the moment.
(Mr Donoghue) I do believe that is an unfair assessment.
We believe that our outcomes and outputs are much more important
than some PR stories. For example, we would far prefer the British
industry to know that for every one pound spent of taxpayers'
money in BTA we return £28 back to the industry, of which
£5 goes back to the Exchequer. That is a return on investment
for the taxpayer which we think is far more important that a couple
of comments from hotels, albeit excellent ones and albeit those
hotels with which we would want to work in the future, but actually
it is the outputs for the British economy which we think we should
be measured by and which we can stand up and be proud of.
(Mr Wright) May I add, as the new chief executive,
that I disagree with some of the statements which you are reflecting
there. First of all, I have visited many of our offices overseas
and talked to much of the trade and the British Tourist Authority
is highly respected, both overseas and in the British trade. You
only have to look at the partnerships we have been managing in
our Million Visitors Campaign this year which has 31 partners
who together have contributed £5 million cash and £20
million of collateral to the joint campaign. The private sector
would not invest that scale of money in a body they did not trust
and have respect for.
49. If we invest one pound and we get £28
back and we have a massive deficit with the rest of the world
in terms of that, it must perhaps stand to reason that in France
and Spain they get even more back for each of the euros they spend.
(Mr Quarmby) It does not necessarily follow that it
is to do with the effectiveness of the marketing activity.
50. And effectiveness from the hoteliers—and
you agreed with me that our hotels are important. They are finding
that they are not being represented and they want a dynamism which
is not there at the moment.
(Mr Quarmby) I should like to feel that that is not
a representative sample. From the evidence I get on the industry
we deal with, of course there are going to be people who express
some concern about what the BTA does or does not do for them.
I do not believe that is a representative of the industry and
I hope when you have representatives of the industry in front
of you during the course of your inquiry, you will ask them the
same questions. The point about the BTA is that our activity is
most visible overseas. It is not really very visible to the UK
at large or even to many of the industry. The test of our effectiveness
should be on what we deliver for this country and how we are seen
by the partners with whom we work most closely.
Rosemary McKenna
51. When I read the statement, I was concerned
that Scotland and Wales would be disadvantaged by the English
Tourism Council being brought in under your umbrella. Having listened
to the previous evidence and what you are saying, I actually think
the opposite is the case. It is the English tourism industry which
will be disadvantaged rather than the other way round. My original
concern was that Scotland and Wales would be disadvantaged, but
when I hear about the situation and I know how successful VisitScotland
has been, despite a lot of criticism, not only within the industry
but within the media in Scotland, how are you going to ensure
that you look after the overarching remit you have and look after
the English tourist industry.
(Mr Quarmby) It is a key task of the board of the
new organisation to ensure that it does the job for England. Tom
Wright will be designing the organisation to ensure that both
sets of objectives will be delivered.
(Mr Wright) Absolutely. The industry partners who
very much worked on the Blue Skies Group to develop a marketing
remit for England welcomed the announcement which has been made.
They are very supportive of what is happening. The second thing
to say is that what the BTA does overseas is very much ring-fenced.
Our new strategy is very much focused on the professionalism of
our marketing around the world. We have a very successful track
record in delivering the diversity of Britain around the world.
We shall have a separate marketing unit to continue to focus on
Britain, engaging with the nations and regions of Britain and
we shall have an independent marketing unit doing the same for
England, which can benefit from the economies of scale and the
pre-existing specialism and understanding we have of Britain in
England overseas. We produce an enormous amount of material which
is also equally relevant to marketing England domestically. Scotland
and Wales already use part of this material in their own domestic
marketing and we can get the economies and benefits as a result
of that.
52. The budget will have to be there as well.
You cannot do this on the existing budget. If you look at the
budget in Scotland and how VisitScotland's website, again criticised
but very successful, as has already been demonstrated. Incidentally,
in Scotland we are about to launch a cultural portal which will
link to the VisitScotland site which will be absolutely fantastic
for people coming into Scotland and showing them just what is
available. How can you do that with the kind of budget which is
there at the moment?
(Mr Quarmby) First of all I should like to agree with
you that Scotland has been very successful and very effective
in the development of their website and their strategy surrounding
that. As you have heard, there is a similar strategy for England
based on EnglandNet. It is a few years behind. It will be there.
On the funding, we do not yet know what our baseline funding is
going to be for 2003-04, but we hope that the Secretary of State
will be advising us and parliament shortly and perhaps that is
something you might be wishing to press the Secretary of State
on when you meet her. Until we know that and the two distinct
funding streams for overseas, for Britain and domestic for England,
I cannot really answer your question. All we do have to go on
is that in the Secretary of State's statement last week she did
say that she was announcing additional funding for tourism services
in England of £10 million over three years, which will be
made available on certain conditions to be satisfied. We do not
have the overall picture yet.
(Mr Donoghue) The last time we appeared before this
Committee, we called for additional resources and within four
days we got £14 million. That was one of the reasons why
we were most keen to take up your invitation today, to try to
get that same sort of clarity and speedy efficiency.
53. The English Tourism Council mentioned staff
and young people leaving the industry, bright, intelligent, enthusiastic
young people who are leaving the industry. Do you have any idea
how many? Why are they leaving and how can you retain them?
(Mr Quarmby) I am afraid that sort of information
is not something we specialise in. We have our own information
on that, which we get through the English Tourism Council, the
other national tourist boards and through the industry. We are
a marketing organisation. Clearly we are concerned about the health
of the product, but we look to others both to advise and take
the initiatives on change and so on.
54. It is a substantial issue.
(Mr Quarmby) It is an important issue.
John Thurso
55. I want to ask you specifically questions
regarding devolution, but in view of some of what has been said,
I should like to make two brief points. One is regarding all my
very good friends who have written to this Committee about the
future chairmanship of the BTA, I suspect very prompted. What
I should like to say is that I do not think on this occasion that
their views are representative of the industry. I think the vast
bulk of the industry that I know feel that the BTA have done a
very good job in difficult circumstances and the difficult circumstances
particularly are lack of money and the difficult structures. Much
as I love Kit and Martin and Albert and Michel and all the rest
of them. on this occasion I think they are wrong. Having said
that, you will not now mind if I congratulate you warmly on the
script you read out, but say I think it is one of the biggest
bits of bovine scatology I have ever listened to. May I bring
you back to overseas representation and the devolution settlement?
Under the devolution settlement tourism is a wholly devolved matter,
therefore it rests entirely with Scotland and Wales and therefore
by inference it is devolved in England. The marketing of the United
Kingdom overseas, which is what the BTA does, could easily be
done either by one body for the whole country or it could be done
by each of the nations who might then come together. There are
many people in the industry who feel that the tourism devolution
was simply wrong and it is better to have a UK body, end of story.
That is not the reality we deal with. We deal with the reality
of devolution, which, for the avoidance of doubt, is something
I support. The point really which I should like you to address
is this. Is it not always going to be impossible to have one body
which is charged with bringing together three separate nations
with three separate viewpoints whilst at the same time asking
that same body to be one of the constituent players in that and
responsible for a very partisan marketing campaign with the other
two being their direct and biggest competitors.
(Mr Quarmby) Let me take those points in turn. First
of all, whether a body is constituted exactly the same way that
the BTA is or whether it is constituted in some other way, I have
no doubt whatsoever that Britain and Britain's tourism industry
benefits by having one representative organisation overseas rather
than three. First of all, when the visitors visit this country,
only a proportion of them only visit a part. We know, for example,
that half the visitors to Scotland actually visit England along
the way. Of the half who only go to Scotland, half of them come
into English airports anyway. The market expects to be able to
relate to one organisation. What we are doing in a new part of
our strategy is giving a much more distinctive branding to the
nations and the regions of this country because they represent
different things, different values, different experiences and
it is to the advantage of all of them that we make more of how
Scotland is different from Wales, is different from England, is
different from London. I have no doubt that there is a huge benefit
in having one organisation. The question is then: can that organisation
still continue to be as effective—and thank you for your
compliments—when it is given an additional task of domestic
marketing in England? My belief is that it can. Tom has already
explained how there will be two quite distinct marketing functions,
there will be a certain number of common services which will support
both activities. I foresee no fundamental problems in developing
two quite different strategies for the two different tasks which
the organisation is there to pursue.
56. May I pursue you on that? Your submission,
rather like the ETC's, has made it very plain that what they recommended
was something completely different. I understand you made exactly
the same recommendation.
(Mr Quarmby) We did; we have.
57. This was not something you would have wished,
had you been in charge of it. Moving on from that, you have two
strategies, you have two ring-fenced income streams, you have
two completely separate sets of marketing people and just a tiny
little bit of common support. It does not take a great deal of
wit to say that you actually have two organisations but you have
stuck them under one umbrella and you have a few back of house
which are common. Why on earth is it that the politicians in charge
of tourism simply cannot understand that what we need is two organisations
and two organisations in name? We have that in everything but
name. Why do we not just have England and Britain and be done
with it?
(Mr Wright) It is worth touching a little bit on our
overseas strategy and how well BTA already serves devolution.
We have a tremendous professionalism in the way we market Britain
around the world. We have a presence in 27 countries and we are
expanding that in new countries like China, Malaysia, Poland and
Korea. We offer that infrastructure to Scotland, Wales, England,
London, the regions of England, to buy into and to focus our energies
on those markets which are most appropriate for their particular
nations. Our strategy is to increase that professionalism and
in particular get closer to the customers around the world and
develop relationships and help understand the lifestyles and the
occasion that people travel around the world. Those skills, that
understanding, that professionalism is equally applicable to England
and there is a lot more in common than I think you suggest. Already
the BTA and ETC share a lot of services, for example we have common
data entry for some of our websites and internet, we have continental
services, we are in the same building. This is more logical than
perhaps it would look from afar and it allows us to fast track
all BTA's marketing professionalism and marketing skills to get
England up and running very quickly and not in any way damage
the diversity of Britain around the world, but to balance Scotland
and Wales in the way we market overseas and bring our marketing
skills and professionalism to get a really good job done.
John Thurso: May I just challenge you
on that? I am not for a moment saying you do not do a great job
for the devolved areas, although you sometimes miss out the top
half of Scotland, but we have corresponded about that. The point
is that what we all recognise is a great lack has been the fact
that England has had no marketing. It is not that it has some,
it has had none. There has been some regional marketing and it
has been marketed overseas by BTA, but domestically, as a whole
country, England has had zero. So everybody, for a year and a
half, has been saying "Let's create it", Ministers,
everybody. Now we are creating something, but we are not creating
something for England, we are creating a new body which is half
and half. We are then saying, "Oh, but we want something
special for England, so we have a separate strategy on each side,
we have a separate budget on each side". It is two organisations,
but it has been pushed together. If you look at the core competences
of any business and you are a modern manager, you say, "What
do I do? What is my core competence?" and you may well share
your back of house admin, you may well share your building, but
the one thing you do which makes you a unique business is your
core competence. The core competence of one of these two bits
of the new body is to prosecute the domestic marketing of England
and the other bit is to market the United Kingdom overseas. You
have admitted through everything in your evidence, the statement
and what you will design which you have not got round to yet,
that there will be two separate strategies, two organisations
and some back of house commonality. It is the only way you can
make it work but why can we not have two organisations in one
building, two organisations with the same back of house and just
be done with it?
Chairman: I am going to take that as
a statement rather than a question so that I can move on; an extremely
pungent statement actually.
Derek Wyatt
58. May I concur with my colleague? I also feel
that this is a complete Horlicks of an approach to tourism in
the United Kingdom. I am going to try not to make a statement.
If you live outside this country, you either call this country
the United Kingdom, Great Britain, Great Britain and Northern
Ireland, England, Wales or Scotland, or something called the regions.
When I was in California last week, five RDAs have five separate
offices and they are going to represent an element of tourism.
Forgive me, but this is rubbish. I know they are going to represent
it here, but they will want to represent it over there. It is
nuts. Nobody understands this overseas. It is crackers. It is
the wrong way to do it. We have another thing called the British
Council. The British Council represents us culturally overseas.
It has 106 offices. So why do we have a BTA with 26, or whatever
you have, not working in tandem; not just not working, but actually
being part of the British Council? It seems to me you have an
absolute mess and muddle about what this country is overseas.
It is good we have this inquiry, because frankly the decision
last week will have to be revisited. Let me just ask one question.
Given that most MPs in England cannot stand their regional development
agencies and when they have a crisis, as I did recently with my
steel workers, the first person you pick up the phone to is not
the chief executive of your RDA, it is the Minister responsible
for manufacturing, it is a bad decision to push the RDA into travel
and tourism. What is your comment on that?
(Mr Quarmby) My first comment is that if the RDAs
choose to establish offices overseas to promote investment and
economic development that is entirely up to them and within their
ability to do so. I do not support the RDAs having an independent
tourism promotion activity overseas and I very much hope that
that will not develop, indeed Alan Britten and I are meeting shortly
with the lead chairman of the RDAs who looks after tourism and
we shall be seeking to persuade him that that is neither in the
interests of their regions nor in the interests of the country
as a whole.
59. It is in the interests of their region.
If it is the fifth largest business and within their remit, they
have to take it.
(Mr Quarmby) With respect, it is not in the interests
of their region to seek to promote their tourism independently
of the BTA. That is a strong statement and it is one which I believe.
As a parallel to that, going back to Wales and Scotland, we have
offered and when I am in Edinburgh tomorrow I shall be re-offering
to the administration there, desks in BTA offices around the world
where we should be pleased to welcome representatives of VisitScotland
or the Wales Tourist Board to sit, as they have in the past, and
work with BTA, using BTA's infrastructure to promote their nation,
or in the case of the regions their regions.
(Mr Wright) We do work very closely with the British
Council, indeed there is a public diplomacy board which I am part
of which is chaired by the FCO and we meet and we look at how
we work collectively and how we promote Britain's best interests
around the world and we do indeed use some British Council offices
to help promote Britain. They clearly are looking at playing a
different part. We are looking at bringing tourists in, they are
looking at education and culture and other aspects. However, collectively
we are working together and using our resources to better the
promotion of Britain in a number of different ways.
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