APPENDIX 22
Memorandum submitted by England's Regional
Tourist Boards
ENGLAND'S
REGIONAL TOURIST
BOARDS
England's regional tourist boards are not-for-profit
companies limited by guarantee (with one exception). Their role
is to promote the sustainable development of tourism and improve
the competitiveness of tourism businesses in the regions, in partnership
with tourism businesses, local authorities, regional development
agencies, other regional/sub-regional agencies and the English
Tourism Council.
1. What is the current and likely future performance
of the British tourist industry following foot and mouth disease
and the events in the USA on 11 September 2001?
1.1 Current state of the tourism industry
in England
Tourism is a powerhouse of the UK economy. It
is Britain's fifth largest industry, worth around £70 billion
to the economy each year, nearly 5 per cent of the gross domestic
product. It employs 7 per cent of the UK workforce (around 2 million
people) and creates up to one in four of all new jobs. It generates
significant tax revenues and can help to deliver key elements
of the Government's agenda, including urban and rural regeneration
and job creation.
Britain is fifth in the world for international
tourism receipts, and around 85 per cent of all UK tourism receipts
are generated in England. Yet the tourism deficit is growing—every
year more UK residents take holidays overseas than foreign visitors
come to Britain. England's tourism offer needs to be more competitive.
The industry is rising to this challenge, but needs further support
and recognition, and a more helpful trading environment.
Visitors want accurate and impartial information,
easy ways to get the information and buy holidays, convenient
ways to travel, reliable quality, value for money and increasingly
excellent service.
England's tourism sector can provide a product
second to none. But rising burdens on business and a lack of recognition
of the importance of tourism's contribution—even after the
events of last year—are impeding its growth prospects. Action
is needed to give tourism businesses the confidence to invest
for future growth, generating even more jobs and wealth for the
economy.
The submission from the English Tourism Council
to this Inquiry provides substantial detail on the current performance
of the industry and the position after the adverse events of 2001—the
Foot and Mouth outbreak and the events of September 11 in the
USA. The main focus of this submission, therefore, is on the factors
affecting tourism's performance and the priorities for government
action. There is a summary of recommendations in section 3.
1.2 Factors likely to affect future performance:
the market
1.2.1 International competition
(a) While tourism and travel continues to
grow worldwide, new tourism destinations are constantly being
created, supported and promoted, as governments recognise the
economic potential of tourism. Traditionally popular destinations
such as Britain are finding it increasingly difficult to compete
within this fast-changing environment. According to recent research
from the British Tourist Authority, the UK is fifth in the world
rankings for tourism visits. However, between 1995 and 2000 it
lost 1.1 per cent of its market share and is forecast to be sixth
in the world by 2010. Clearly, such trends will have a fundamental
impact on businesses that currently benefit from inbound tourism.
(b) In the shorter term, the strength of
the pound against the Euro and continuing international tensions
are very real concerns for inbound tourism. The prospects of a
post September 11 recovery for the inbound US market in particular
are very uncertain, especially following the experience after
the Gulf War in the early 1990s, when it took the inbound US market
nearly five years to build back up to expected levels.
1.2.2 Changes in consumer demand and expectations
Customers for all consumer products are becoming
increasingly difficult to categorise and predict. Traditional
gender and socio-economic characteristics are less relevant than
they were; consumers behave as individuals rather than part of
a group, and want holiday products that reflect their independence
and desire for adventure. This process of individualisation is
expected to continue and accelerate as new products and leisure
opportunities are brought to market, presenting real challenges
for businesses in terms of communicating effectively with customers
and providing what they want. The need for relevant, timely and
accurate information about customers has never been more important,
and the successful businesses will be those that understand their
markets and customer requirements and are flexible and responsive
in delivering their product.
1.2.3 Importance of information and communications
technology (ICT)
The Government strategy "Tomorrow's Tourism"
recognised the importance of information and communications technology
in making it easier for customers to find out about and buy holidays
in the UK. An ever-growing proportion of the UK population and
consumers in our important overseas markets have access to the
internet, and holiday products are some of the best-selling on-line
products. Many tourism businesses have taken up the opportunity
offered by ICT as a marketing tool; evidence from around the UK
has shown that some operators are now taking over half of their
bookings on-line and making significant savings on their marketing
costs. Yet within England, it is estimated that almost 50 per
cent of businesses have no connection to the Internet or e-mail,
and there is a lack of coordination of the on-line information
that does exist. This puts England at a competitive disadvantage
in comparison with tour operators selling holidays overseas and
European competitors that are further advanced. The importance
of ICT was demonstrated through the Foot and Mouth outbreak, where
information gathering and dissemination was cumbersome and labour-intensive.
The Government has made a welcome recognition of the importance
of ICT through its award of £3.8 million through the Invest
to Save programme for EnglandNet, a partnership between ETC and
the regional tourist boards, which aims to provide the networks,
database and infrastructure to underpin successful e-marketing
and e-business.
1.3 Factors likely to affect future performance:
industry issues
1.3.1 Composition of the tourism industry
Tourism accounted for 4.9 per cent of GDP in
England in 2001and is Britain's fifth largest industry in employment
terms. Yet unlike other sectors, tourism is dominated by small
and micro-businesses. According to English Tourism Council figures,
80 per cent of known tourism businesses have an annual turnover
of less than £250,000, and this doesn't include the thousands
of tourism businesses that are not VAT-registered, but nevertheless
provide employment and important consumer products. Without proper
support and coordination, these businesses, and the performance
of tourism in general, face severe competitive disadvantages against
the larger operators prevalent in the outbound market. This is
why the tourist boards were set up in the first place: to help
these small players in a fragmented industry present a strategic
and coordinated approach to the market place, and to support them
in product development, training and other business essentials.
Equally, the larger players in the industry need a supportive
legislative, policy and regulatory framework in order to flourish.
1.3.2 Fiscal and regulatory issues
(a) Tourism businesses must play their part
in ensuring that they provide good value for money. Some aspects
of government policy hamper them in being price-competitive, however.
The high value of sterling in recent years has discouraged overseas
visitors and encouraged UK residents to holiday abroad. The comparatively
high price of fuel in Britain is a further negative factor. There
is a huge disparity on VAT rates for accommodation and attractions
between the UK and its European competitors—Britain's 17.5
per cent compares to an average of 8 per cent. This impedes the
industry's ability to compete on price. The 17.5 per cent rate
of VAT on repairs and maintenance should also be reviewed, to
encourage businesses to continue to invest in their properties
and enhance standards.
(b) The burdens of regulation and legislation
can also damage the competitiveness of small tourism businesses.
The climate change levy, pay-roll tax benefits such as the Working
Families Tax Credit and proposed changes to employment law, are
examples that add cost to small and medium-sized businesses. There
is a need for balance here, which is hard to achieve: tourism
businesses need to be seen as good and competitive employers,
and some regulation to ensure fitness for purpose (for example,
food hygiene) is necessary for consumer protection. Nevertheless,
the effects of regulation can be disproportionate for small businesses,
and the regulatory impact on tourism businesses needs careful
consideration.
1.3.3 Transport/infrastructure
(a) For the UK to have a competitive tourism
offer, it must provide an appealing and well-managed environment.
Transport, parking, toilet facilities, beaches, parks and gardens
are all part of the tourism offer. Local authorities have a major
role to play here, but many of their traditional functions in
maintaining and enhancing the environment for visitors as well
as residents are threatened by pressure on budgets from statutory
services.
(b) Transport in Britain is all too often
expensive and unreliable, especially in comparison with other
European countries where efficient and integrated systems are
the norm. Successful tourism depends on the speedy and easy movement
of people. There are several critical transport issues that have
an impact on tourism:
— The development of airports in London
and the regions.
— The performance of the rail network
as a realistic option for leisure travel.
— The efficiency of the road network.
— Car-borne traffic management schemes,
eg congestion charging.
(c) The planning system sometimes acts as
a disincentive to businesses seeking to develop and expand. Planners
should be encouraged to be more responsive to business needs,
provide active guidance and be more accessible to small tourism
businesses. Highway authorities should be encouraged to operate
tourism signing schemes consistently and positively across the
country.
All of these issues are critical to the development
and competitiveness of tourism in England.
1.3.4 The labour market and skills
(a) Customer service is the key element in
providing a high quality experience for visitors. In a competitive
labour market (prevalent now in most parts of England) it has
been difficult to ensure that the supply of appropriate recruits
meets the demand. The tourism industry needs skilled, friendly
and well-trained people. It has long been recognised that skills
gaps and shortages have been an inhibiting factor in allowing
the industry to reach its full competitive potential. There is
a need to assist the provision of an appropriately skilled workforce
and thus improve the experience of visitors and the industry's
competitiveness in attracting them. Tourism has a relatively poor
image as an employer, and there is an equal need to enhance the
professionalism and practice of tourism businesses, which will
assist recruitment and retention and help to enhance the image
of the industry as an employer.
(b) Regional partnerships of organisations
with shared objectives, money and capacity to change the situation—eg
the RDAs, Learning and Skills Councils, Business Links, colleges
of further education and others—should be made aware of
the issues and channel available funding to address them for the
tourism sector in a concerted and coordinated way, with no duplication
of effort or resource. The RDAs have a vital role to play in coordinating
regional partnerships, with RTBs as their advisors.
(c) The proposed new Sector Skills Council
would also have a key role to play here, perhaps in accrediting
training courses, as well as driving the strategic development
of training for the wider sector. The delivery, however, should
be at regional level, necessitating a strong voice for the regions
in developing the national strategy.
1.3.5 Product quality and consumer expectations
It is universally recognised that consumers
are looking for ever higher standards of quality in their holiday
experience. Expectations continue to rise as more people experience
better service and facilities, often in other parts of the world.
Within the UK there are outstanding examples of quality in terms
of cuisine, accommodation, visitor attractions and customer service.
As an industry our challenge is to improve continuously and raise
quality where necessary. The regional tourist boards, working
with businesses, need to be able to encourage the adoption of
best practice. The case for quality must be linked to strong business
benefits which are recognised throughout the sector. Consumers
are increasingly looking for evidence of quality assurance. Currently,
however, only half of England's accommodation establishments are
inspected by independent assessors. The quality assurance schemes
play a very important role in driving up quality, especially in
the smaller hotel, B&B/guest house, holiday parks and self-catering
sectors, and must be better promoted, enhanced and safeguarded
in any new tourism structure.
1.4 Factors likely to affect future performance:
Tourism structures and support—DCMS review
1.4.1 Marketing England
(a) There is clear consensus among the industry,
tourist boards and related organisations that the lack of a marketing
budget for England over the past three years has been a serious
bar to the competitiveness of England as a tourism destination.
This situation has existed uniquely in England, with Wales, Scotland
and Northern Ireland all having significantly higher tourism budgets
and significant marketing spending power. There is no budget for
promoting England in overseas markets, meaning that Wales, Scotland
and NI can all fund high-profile participation in BTA campaigns
and promotions but England cannot.
(b) Although RTBs perform an important marketing
role, they do this without government funding, since marketing
is specifically excluded from DCMS/ETC-funded projects. The industry
does support RTBs' marketing activities, but there would be much
greater support and much greater success if there was seed-corn
funding available at a high enough level to allow RTBs to carry
out their leadership role, add greater value and create a real
change and rationalisation of current approaches to marketing.
Campaigns could be developed to support sub-regional brands that
make sense to consumers; to support marketing activities to extend
the visitor season and thus contribute to long-term employment
prospects, and to continue to assist rural recovery and development.
There is a need for continuing research into customer needs; positive
PR campaigns to improve perceptions and development of appropriate
products and themes to meet customer needs and expectations.
(c) The proposed establishment of a marketing
body for England is, therefore, a welcome step forward. It is
clear, however, that unless significant new resources are forthcoming,
we run the risk of either spreading resources too thinly so that
nothing is done well, or losing activities that are valued by
the tourism industry because resource is not available to continue
them.
1.4.2 The role of Regional Development Agencies
(a) Equally, the proposed closer relationship
between Regional Development Agencies (RDAs) and RTBs is very
welcome, and presents a real opportunity to improve the support
and intervention mechanisms for tourism at regional level. RDAs
should be encouraged to ensure that tourism is at the heart of
their agendas and that sufficient funding is deployed to support
it, though it is recognised that levels of support will vary from
region to region in line with economic priorities. RTB / RDA relationships
across England are currently at varying stages of development.
Most RDAs provided funds last year to RTBs, on the basis of detailed
recovery plans, to help to fight the impact of Foot and Mouth
on the tourism industry; closer relationships and a greater understanding
were forged in the process.
(b) It is important to remember, however,
that FMD funding was a one-off response to a particular crisis,
where it was seen as imperative by all parties to act. It is essential
that at least the current levels of funding received by RTBs from
ETC are ring-fenced for each RTB in the future arrangements, though
it is expected that RDAs will wish to provide additional funds
to the RTBs where tourism is of particular importance. It is pleasing
that the RDAs have said in response to the Secretary of State's
proposals that they see their role as providing strategic support
for tourism, with RTBs as the advisory and delivery arm. This
sets the framework for a fruitful relationship for tourism at
regional level in future.
(c) RDAs are likely to impact on tourism
businesses through business support programmes, skills development,
ICT, marketing, regeneration and competitiveness development.
1.4.3 National and regional focus on tourism
as a sector
(a) To help the tourism industry to reach
its full potential, to address the problems of fragmentation and
to tackle some of the current challenges (such as quality development,
skills development, promoting government policy for tourism etc),
there needs to be a clear focus on tourism as a sector, both at
national and regional level.
(b) In the regions, RTBs and sector groups
can act as advisors to the RDAs in pulling together regional partnerships
focused on delivery for the tourism sector—for example,
via the Learning and Skills Councils, Business Links etc. Equally,
they can advise the RDAs on policy issues affecting the industry.
It is believed that RDAs would welcome closer relationships with
the RTBs to enhance their ability to provide strategic support
for the tourism sector.
(c) RDAs may also welcome assistance on spending
priorities and working in partnership with local authorities to
ensure that resources are well-spent in support of strategic priorities
and not duplicated. Local authorities should be encouraged to
contribute to the development of tourism strategy, especially
relating to marketing, and commit their expenditure accordingly.
The Government's argument over the last few years has been that
a great deal of money is already spent on promoting parts of England,
mainly by local authorities, but this money is not necessarily
spent to best effect. Having some funding to put into strong brand
partnerships would encourage individual players to give up some
current activity because they would see the value of the bigger
game. RTBs would have the delivery role in bringing these partnerships
together and making them work.
(d) By the same token, there is a need in
the new arrangements for a strong focus on tourism at national
level, informed by the regions. There is a role for national coordination
in virtually all of the activities envisaged as continuing in
the new structure. The depth of this role will vary according
to the nature of the activity and how who) delivers it. Equally,
there is a need for national co-ordination of tourism policy.
(e) The RTBs believe that the new marketing
body should have responsibility for certain functions to enable
it to do a complete and effective job for tourism. The industry
will welcome a marketing-focused organisation. As well as the
communications and promotional aspects of marketing, however,
a role in product development and product standards will be necessary.
We believe the functions should be as follows:
— marketing strategy and promotions
(including setting strategy with the commercial sector, RDAs and
RTBs). Some funds could be devolved for RTB marketing delivery
to support the national strategy—eg for sub-regional branding
partnerships or specific products that have a national relevance.
This should encourage financial leverage within regions from the
commercial sector and local authorities as well as RDAs.
— E-marketing/e-commerce, through the
EnglandNet partnership. This is set up and funded to provide the
network and database for e-marketing. Regional delivery of the
data, stakeholder partnerships etc is vital to the project's success,
and it is equally vital that the current funding for regional
roll-out and data collection are retained in the new structure.
Without this, there is a risk of fragmentation if different RDAs
give this different priority. To enable EnglandNet to do its complete
job in reaching the customer, however, there is a need for significant
additional funds to provide consumer-facing web portals and to
promote the whole activity to consumers.
— Market intelligence: market trends,
consumer preferences etc.
— Advisory role in product development
where there is a need for national consistency to maximise the
potential opportunity—eg rural/green tourism strategies,
accessibility—in consultation with private sector, RDAs,
RTBs
— Advisory role on other product development
issues, such as quality standards, training etc.
(f) Although the lack of marketing funding
over the last three years has been a major disadvantage, the current
funding arrangements (whereby ETC devolves funding to the RTBs
on the basis of agreed project proposals) have given a significant
cogency and coherence to the work of the RTBs. To avoid the possibility
of fragmentation of national projects that are strategically important
in the future arrangements, it would be appropriate for there
still to be a central funding stream for RTBs in the new structure.
1.4.4 The role of the regional tourist boards
The regional tourist boards are positioned to
play a lead role in promoting the RDAs' strategic objectives in
the tourism industry, among businesses and local authorities,
and in delivering the agreed agenda for tourism in each region,
with partners. They are the only regional players with sole responsibility
for and access to tourism businesses. They have an established
position as a conduit between the industry, local and national
government and other policy makers. They represent, uniquely,
all sectors of the region's tourism industry, with established
consultation and communication methods.
1.4.5 A possible delivery mechanism for national
co-ordination in the new structure
(a) It will be important in the new structure
to retain national consistency in delivering services such as
the Quality Assurance schemes, training (including the "Welcome
Family" of courses that are currently being successfully
redeveloped), the Green Accreditation scheme etc. The new marketing
body should have an input into standard setting, since this influences
the development of the product that it will promote, but should
not be burdened with delivery. Equally, RDAs will want a strategic
overview, but are not likely to want to be responsible for the
detailed delivery role.
(b) A potential model for delivering much
activity that needs national co-ordination but regional delivery
could be as follows: a company limited by guarantee could be set
up, with a Board composed of the 10 RTBs and non-executive directors
from RDAs, DCMS and the new marketing body. The company should
also host a consumer panel and an industry panel, to enable ideas
to be tested, research to be carried out and regular consultation
to take place.
(c) The RTBs recommend that this proposed
company should be considered positively as the delivery mechanism
for nationally important functions that are to be retained in
the new structure.
1.4.6 The role of the British Tourist Authority
(BTA)
With devolution in the UK, the strength of BTA
is its overseas network. The re-working of the Britain brand to
accommodate England, Wales, Scotland and London brands highlights
the move towards the sub-brands. As overseas consumers become
more knowledgeable about destinations, and the sub-brands begin
to rival Britain as a brand, the time is right to look at what
BTA should offer in the future. There is a need for improved communication
and joint working between BTA and its regional partners, especially
at the conceptual stage of marketing programmes. RTBs can then
add value by bringing in sub-regional and industry partners. The
aim would be to provide a seamless service to the customer, whether
the main player is BTA, the RTB, the local destination or the
TIC. Better co-ordination and communication at all stages would
provide a better return.
2. Does Government have a role in promoting
and/or supporting the industry, and what should its role be?
2.1 The case for government
support
(a) Government has a clear role in promoting
and supporting the industry, and it is in its interests to do
so. Tourism is a key economic driver across England. In many areas
it has been used as a tool for rural and urban economic regeneration,
and tourism benefits percolate throughout the UK economy. Rural
communities, towns and large cities can all benefit from tourism,
which supports not only direct providers but also a plethora of
suppliers and services. The Foot and Mouth outbreak very clearly
demonstrated the extent to which tourism permeates the economy
by the impact felt by so many seemingly unconnected businesses.
(b) Tourism has a major contribution to make
to government and RDA policies on sustainable economic performance,
regeneration, urban and rural development, employment, skills
development and productivity. The sector needs support, particularly
for its key priorities, to enable this contribution to be realised.
(c) A prosperous industry means a net benefit
to the Treasury in terms of direct and indirect taxation. Recent
estimates suggest that 25 per cent of the revenue generated by
tourism is returned to central government in one form or another.
(d) The pressures on tourism outlined in
section 1—competitive pressures, market change, fragmentation,
fiscal and regulatory issues, labour supply and skills shortages—will
combine, without intervention, to impair tourism's competitiveness
and worsen the tourism deficit. Growth in overseas holiday taking
is inevitable—a consequence of a more mobile, aspirational
and better-off population, as well as the efforts of our competitors.
It is clear, however, that positive intervention could strengthen
England's performance and help to reduce the deficit. This was
shown through the great and largely successful efforts to mitigate
the impact of Foot and Mouth on tourism last year.
(e) England's competitors benefit from significant
public funding which is used effectively to win market share.
A number of competitive European destinations such as Ireland,
France and Spain are able to marshal greater resources in the
marketplace in the battle for increased visitors. While money
is not the only answer in terms of marketing, there is little
doubt that when invested in strong campaigns it provides a competitive
advantage.
2.2 What should government's role be?
(a) The Government, with the support of the
RDAs and RTBs, should identify the areas in which it can add value
and provide an appropriate level of funding to ensure successful
intervention. Relevant areas of work will be those where the industry,
because of its fragmented nature, is unable to act strategically
to improve its overall performance. Suggested areas are set out
below, aimed at addressing the issues set out in section 1.
— Investment in the infrastructure
and transport system;
— Research and intelligence, especially
to support marketing;
— Strategic marketing, brand development
and PR at a national, regional and sub-regional level, harnessing
the support of local authorities and the industry and aimed at
attracting new business;
— Development of effective ICT networks
and e-business;
— Business support and advice;
— Support for Tourist Information Centres
as sales agents and advocates.
(b) Government can take a leading role in
ensuring that the publicly funded mechanisms for tourism support
are effectively organised. A lack of national leadership in this
area has resulted in the development of structures and organisational
players in tourism without an effective strategic framework.
(c) The RDAs are now key players in tourism
support. RDAs should take the strategic lead on tourism within
a regional context, using the expertise of RTBs to provide advice,
liaise with the tourism sector and deliver agreed programmes.
Synergies with other regional agencies for the arts, sport, museums
should be explored and encouraged, where it is in the interests
of the agencies to work together. This will enable a responsive,
industry-focused support mechanism working within the strategic
framework provided by Regional Economic Strategies.
(d) The Government should ensure that its
own policies do not work against the tourism industry. DCMS should
enhance its role in influencing the policy of other government
departments and reviewing the legislative and regulatory environment
for tourism, advised and supported by the RDAs and tourist boards.
3. Recommendations: how can the current arrangements
be improved?
3.1 The Government should enhance the industry's
price competitiveness by reducing the rate of VAT on tourism businesses
in line with our competitors within the EU (para 1.3.2.a)
3.2 The Government should review the regulatory
and legislative environment to ensure that the effects are not
disproportionate for small tourism businesses (para 1.3.2.b)
3.3 The Government should ensure the provision
of an affordable, reliable and safe transport system (para 1.3.3.b)
3.4 Local authorities should be encouraged
to provide a planning environment that encourages the sustainable
development of tourism businesses, and well-managed services for
visitors and residents (para 1.3.3.c)
3.5 The RDAs should encourage regional partnerships
to focus on addressing the skills and labour issues facing tourism
(para 1.3.4)
3.6 The quality assurance services must
be enhanced, safeguarded and better promoted in the proposed new
tourism structure (para 1.3.5)
3.7 The proposed new marketing body for
England should be established with significant additional funding
(para 1.4.1)
3.8 RDAs should play a strong role in tourism
development and support within their regions, using the advisory
and delivery expertise of their RTBs, and ensure that RTBs receive
at least their current levels of funding as well as enhanced support
to address regional economic development priorities for tourism
(para 1.4.2)
3.9 RDAs should encourage local authorities
to contribute to regional tourism development strategies and commit
their resources accordingly (para 1.4.3.c)
3.10 A focus on tourism as a sector at national
level should be retained in the new tourism structure, with national
co-ordination of activity (para 1.4.3.d)
3.11 Positive consideration should be given
to the proposed company model for delivering important national
activities (para 1.4.5)
3.12 The Government, with the RDAs and RTBs,
should identify the areas where its intervention and support could
add value, and provide appropriate levels of funding (para 2.2.a)
3.13 The Government should establish a clear
support structure for the industry and organise the resources
of local authorities, regional and sub-regional agencies and national
bodies more effectively, to eliminate duplication and wastage
(para 2.2.b/c).
3.14 There should be a higher profile for
tourism within government to reflect its economic importance to
the UK (para 2.2.d)
9 October 2002
|
