Examination of Witnesses(Question Numbers
291-299)
MR PHILIP
EVANS, MR
JONATHAN JONES
AND MR
STEVE WEBB
TUESDAY 17 DECEMBER 2002
Chairman
291. Gentlemen, I would like to welcome you
here this morning. I am sorry for the delay in inviting you into
the room but we had some private business which ran over a little.
I wonder, Mr Evans, if you would like to make an opening statement?
(Mr Evans) Thank you, Chairman. I welcome
this opportunity to be before you and thank you for your courtesy
in extending us the time. We are probably a slightly different
organisation to those that have stood before you previously as
a national tourism organisation. We do differ in that we are probably
more commercially driven because tourism in Wales is more important
to us than it is in any other region of the UK—ie, it gives
7% of GDP which in Wales is more than agriculture and construction
put together. We generate about £2 billion a year, which
is £5 million a day, through our industry. However, probably
the most important aspect of difference is that we do have grant-giving
powers, so we do get very involved in the development of the tourism
product as well. I would, at the outset, like to introduce on
my right Jonathan Jones, Chief Executive of the Wales Tourist
Board, and Steve Webb, Director of Strategy. They are my intellectual
minders, so I am delighted to have them along with me today. We
do also have a different board structure in Wales, in that we
are very different to the quangos of old. We do have a specialist
skill board where we actually recruit board members because of
their specialist skills, and not just making up numbers. Where
we do have the various departments within the organisation we
have a board member allocated almost in a vice-chair capacity
to actually drive economic regeneration through strategy, or development,
or finance or marketing, so it is very important that we understand
that we are a very commercially driven organisation. We work to
a ten-year strategy, which is a bit—I must admit—like
buying a computer from Dixons, because by the time you take it
out of the door it is probably obsolete. So we revisit our strategy
continually and everything we do is strategy-compliant. Therefore
we justify it. I think probably that we are very target driven
and performance ambitious because we are very well aware that
we have had the huge benefit of Objective 1 funds—European
funding—which gives us some £39 million worth of budget.
Our grant-in-aid really has not changed; we are currently running
at about £22 million. I know there are lots of fictitious
stories about this incredible budget that Wales has, but we actually
have a grant-in-aid core budget of £22 million. We build
that by bidding for European funds, pathway to prosperity funds
through our own Assembly, but we are very aware that by 2006 we
will be back down to a budget of about £24 million from £39
million. So within our strategy we are attacking this by, obviously,
appealing to our own Assembly but looking at more commercial strains
of partnership issues, with local authorities and with the private
sector. So that is probably what makes us very different to other
tourist boards. We are just about to appoint a commercial director
(which, again, will be a new, innovative post for a national tourism
organisation) whose sole job or priority will be to look at revenue
streams from other sectors. In a nutshell, Chairman, that is the
Wales Tourist Board, and we welcome your comments.
Chairman: Thank you very much, Mr Evans
Derek Wyatt
292. Good morning. Can I just ask you about
the overseas presence. I have been asking this of quite a few
people. What does Wales have specifically overseas that is just
Welsh that represents the Welsh tourist industry?
(Mr Jones) Chairman, we do not have any of our own
offices, we work very closely with our colleagues in the British
Tourist Authority who have, I believe, 26 offices overseas. We
have two members of staff working out of the BTA office in New
York and actually paid for by the BTA, and we reimburse them in
London. If we were to expand our operations overseas that is indeed
what we would like to do—have more Wales Tourist Board people
working out of BTA offices overseas.
293. You would rather that was how it is done
as opposed to having your own Welsh office. Forgive me, I do not
know much about Welsh inbound tourism, but is your main market
America or Japan, or what?
(Mr Jones) Our main overseas market is the United
States—some 200,000 people a year—but our main market
is the United Kingdom, generating some 10 million visits a year
as opposed to one million visits from all our overseas' markets.
Bricks and mortar are very, very expensive, and if we were spending
money overseas we would rather spend on marketing campaigns than
on expensive bricks and mortar.
294. So would you rather have Welsh offices
in British airports or Oxford Street? In other words, is it in
your interest to say "Come to Wales" from London or
New York?
(Mr Evans) We are fairly mercenary in our outlook,
to be perfectly honest. We look at what gives us best value—the
biggest bang for the buck. If we can piggy-back on the BTA we
will piggy-back on the BTA. It is really where we are market strong—ie,
in the States. This year, above the line, in open marketing terms
we will spend more in America promoting Wales than the BTA will
spend promoting Great Britain.
295. One of the things that the Government tells
me they are doing is they are trying to bring together the Foreign
Office, the DTI and as it were the diplomatic section. Although
it has failed dismally in California, there are now nine government
offices for business that do not report back to the Washington
Embassy. To what extent do you think there is a role for tourism
in the DTI section of our embassies and consulates abroad, as
opposed to the BTA?
(Mr Evans) I think it is very important, as I say,
where we are market strong. Where we are market weak—and
there are quite a few areas where we are market weak—we
would use the umbrella of the BTA. Where we are market strong
and we feel we can use a Welsh presence—because there are
various areas around the world where the Celtic brand is stronger
than the British brand, as far as identify is concerned—we
will use the Welsh presence offices (we are not allowed to say
"embassies"). For example, the Assembly have pushed
us, on certain issues, to join in five strategic overseas markets.
On four of them, I think, we have refused to do so because we
do not think it is best value. We actually control our budgets
and we say what is best value and we take that from our strategy.
That is the direction we drive it in.
296. As the Welsh Assembly develops into a parliament,
which I think it will do, do you feel there are tax implications
that are specific to Wales that you would want, as it were, a
Welsh Parliament or British Parliament to address that are different,
other than VAT on hotels, or things like that? Are there specific
issues that have, for the Welsh market, tax implications?
(Mr Evans) Thank you for that Pandora's Box! I do
not think we set ourselves out to make comment on that sort of
issue. The imbalance of VAT is very relevant, where in Europe
it is 11.4% as an average across the board, where we are paying
17.5%. So it is very much a braking mechanism as far as that is
concerned. We would be delighted to be involved in the disbursement
of tax revenue but we have not been given that courtesy yet.
Alan Keen
297. It is interesting to hear you, because
we are all learning—which I suppose is why we are holding
a short inquiry—about tourism and how to get the best from
it. It sounds to me as if you have a more flexible system than
the rest of the UK on this; it sounds as if you are able to take
a proactive view: "What is missing? We will find it and put
it there, somehow or other"—through the private sector,
presumably. Can you explain a bit more about how you operate?
Are you a trade body as well as a public body?
(Mr Evans) No, we are not. We have just pump-primed
the industry because in Wales we believe that the industry has
got to grow up. The Wales Tourist Board, probably, over the last
20 years has been very much Mothercare to the industry and we
do not do that any more. We believe for any industry, like the
motor industry or the metal bashing industry, they have to handle
their own fortune. We consider that our role is to get the best
budgets we possibly can and that our role is to market the great
product that we have got internationally. We have now set up four
regional partnerships which we are devolving our funds into, which
again is quite innovative, in that for the first time we have
local authorities and the industries working together on regional
partnerships; we are actually devolving some £3.5 million
a year down to the regional partnerships for regional marketing
issues. We are looking now to devolve grant-giving issues, up
to £100,000, down to the regions. I think it is a very socially
inclusive policy, which is what I personally believe in. I am
a commercial company chairman and I bring those views to the board.
We work very closely with our Assembly. We do have the huge benefit
of access to our First Minister and our Minister for Economic
Development—literally at the end of the telephone. Great
on a Sunday morning! But we do have those sorts of access points.
Consequently, when we are talking strategy and we want to change
issues—for example, when the Foot-and-Mouth impact hit us,
we were out with rescue packages within four or five weeks and
we were on television with major advertising campaigns within
four or five weeks of Foot-and-Mouth coming up. So very proactive,
but our Government allows us to do that. That integration is very
important.
(Mr Jones) May I add, Chairman, on the grant-giving
side as well, the area of flexibility that you mentioned is the
ability that the Wales Tourist Board still retains, which our
colleagues in VisitScotland and the ETC either gave up or had
taken from them. We can still offer capital grants of up to 50%
of eligible capital cost to businesses who wish either to come
into Wales or wish to develop. We do that proactively. We sit
down with the Assembly and our colleagues in the Welsh Development
Agency and agree investment strategies. So if we want a large
hotel somewhere or a large self-catering development or a large
leisure attraction, we can actively go out after those private
sector people and pave the way for them to come into Wales.
298. That is what I interpreted from your evidence,
that you had a much more proactive role than the other bodies
in the other regions. Do you think the other regions could adopt
that policy? Or are they too large to have the ability that you
have got?
(Mr Evans) If I can involve Steve Webb, my Director
of Strategy on that, he has cross-conversations with all the other
bodies.
(Mr Webb) I think you have got to look to history.
At one stage the English Tourist Board in those days (now the
ETC) and VisitScotland (in those days Scottish Tourist Board)
did have grant-aiding powers. For one reason or another the government
of the day decided that those grant-aiding powers either should
be taken away from those bodies or moved into other government
agencies. In Scotland, for example, those grant-aiding powers,
I think, are still made available through the Scottish Enterprise
network. We are the only tourist board within the UK to maintain
that dual role, not just a marketing agency but a development
agency, in terms of the investment grants that we can make available.
299. What I have picked up from the other people
we have seen so far is that because it is a fragmented industry
there are lots of gaps there which, when you are marketing to
people overseas or people in the rest of the UK, you would love
to fill. You would love to be able to advertise that that is there
and, if it is not there, you can in fact step in and look for
people and say "Look, there is money available if you will
fill that gap that we perceive".
(Mr Evans) That is right.
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