2. Written evidence from the
Wales Tourist Board
HOUSE OF COMMONS WELSH AFFAIRS COMMITTEE
INQUIRY INTO MANUFACTURING AND TRADE IN WALES
INTRODUCTION
Tourism has a twofold role in terms of manufacturing
and trade in Wales. The first role is that of providing a basic
support infrastructure for business and trade, without which they
would find it difficult to function efficiently. The second role
is that tourism itself is a trading activity, with overseas visitors
to Wales representing an export activity and visitors from Wales
to overseas destinations representing import activity. This submission
will examine in turn both these roles. The submission also addresses
a number of the specific issues that the Committee has expressed
an interest in, notably:
— transformation of traditional industrial
and rural economies;
— UK Government and EU involvement
and assistance; and
Before examining the roles that tourism plays
in the subject of this inquiry it is necessary to describe the
specific role of Wales Tourist Board, and the importance of tourism
to the Welsh economy.
ROLE OF
WTB
WTB is responsible for promoting Wales as a
tourism destination, undertaking research and improving the standard
of visitor facilities in Wales. It is an Assembly Sponsored Public
Body receiving its grant-in-aid budget from the Welsh Assembly
Government.
IMPORTANCE OF
TOURISM TO
THE WELSH
ECONOMY
Tourism in Wales in 2002 generated a total of
£1,795 million in visitor expenditure, from UK and overseas
staying visitors. If the expenditure associated with leisure day
trips in Wales is taken into account this figure rises to £2,571
million.
Independent estimates confirm that tourism employment
in Wales represents a substantially higher share (9%) of total
employment than in the United Kingdom as a whole. More than 60,000
of the jobs in tourism are of a direct nature, being within a
variety of tourism related industries, whilst the balance of more
than 30,000 are in industries supplying tourism.
The foot and mouth epidemic illustrated the
importance of tourism to the rural economy in Wales. It should
be pointed out that tourism, because of its scale in Wales, is
a significant purchaser of local goods and services and WTB is
seeking to encourage tourism businesses to buy more of their goods
and services from the local economy to increase the proportion
of visitor spend that is retained in the local economy.
TOURISM ROLE
IN HELPING
TO PROVIDE
THE BASIC
INFRASTRUCTURE SUPPORT
FOR BUSINESS
AND TRADE
Businesses need hotels for visiting executives,
contractors and sales people to stay. They need restaurants to
entertain their clients in, meeting venues for training seminars
and conferences. They may also require entertainment and leisure
facilities to relax in. The existence of high profile icons such
as the Millennium Stadium helps raise international awareness
of Wales as a location for business and investment. The old saying
"that a good place to visit is a good place to work and live"
is particularly appropriate when it comes to attracting inward
investment. Investors will in addition to the strictly business
criteria of access to markets, transport infrastructure, availability
of skilled workforce etc, will also take account of the quality
of the environment, the cultural and sporting facilities that
are available. Studies in other regions of the UK for instance,
suggest that up to 35% of locating companies are influenced in
part by the quality of the environment—source Valuing Our
Environment—Economic Impact of the Environment of Wales.
The tourism sector is no longer regarded as
a residual one where growth is dependent on the goods producing
(agriculture and manufacturing) sectors of the economy. Increasingly,
the economic links run in both directions. Manufacturing growth
may well boost tourism but, similarly, an expansion in tourism
will stimulate output and employment expansion in the manufacturing
sector. The net effects on the economy will be particularly beneficial
in those circumstances when the impact content of tourism expenditure
are minimised. In this context, there is real benefit to be gained
by improving supply chain links between tourism providers and
local suppliers of goods and services to leakages from the local
economy and to enhance local distinctiveness.
In 2002 there was a total of 1m UK business
trips to Wales involving an overnight stay, resulting in £166
million of visitor expenditure. There were a further 155,000 overseas
business trips to Wales generating £56 million in spend.
TOURISM AS
A TRADING
ACTIVITY
Visitor expenditure by visitors to Wales from
outside Wales can be regarded as export income whilst expenditure
by Welsh residents to other parts of the UK or the world can be
regarded as import costs. Based on the United Kingdom Tourism
Survey and the International Passenger Survey for 2002, the table
below has been derived to illustrate Wales' balance of trade in
tourism terms with both the remainder of the UK and the rest of
the world.
TOURISM TRADE BETWEEN WALES, THE UK, AND
THE REST Of THE WORLD
|
| Export visitorExpenditure£ million
| | Import VisitorExpenditure£ million
|
|
| Visitor spend by UK Staying Visitors to Wales, excluding Welsh residents
| 1,329.7 | Welsh Staying Visitors expenditure in rest of UK
| 970.8 |
| Visitor Spend by Overseas Staying Visitors to Wales
| 252 | Welsh residents visitors expenditure overseas
| 1,696.8 |
| Total | 1,581.7
| | 2,665.6
|
|
It can be seen from the analysis that whilst Wales has a
favourable trading balance in terms of visitor expenditure with
the remainder of the UK, it has a trading deficit with the rest
of the world. This analysis takes no account of the £213
million spent by Welsh residents on staying trips within Wales.
This would highlight the importance of attracting more overseas
visitors to reduce the tourism trade deficit.
TRANSFORMATION OF
TRADITIONAL AND
RURAL ECONOMIES
Tourism has played a positive role in helping to transform
both industrial and rural economies.
In the cities of Cardiff, Newport and Swansea there has been
substantial hotel development over the last five years, with Cardiff
having two new 5 star hotels, and a 29% increase in hotel bedrooms
in the period 1998-2001. Both Swansea and Newport have also had
their first 5 star hotels during this period. The Millennium Stadium
has given Cardiff an international profile and stimulated significant
investment in the hotel, restaurant and leisure sectors. A key
role in this has been the holding of high profile events in the
city.
In the South Wales Valleys, progress has been far slower.
WTB and its partners focus has initially been on establishing
these areas as a day visitor destination based on the development
of a range of visitor attractions interpreting the local heritage.
More recently the growth of activity tourism based on initiatives
such as the Celtic Cycle Trail and the Taf Bargoed Climbing Centre
have helped broaden the appeal of the area. In recognition of
the need to achieve a more co-ordinated approach to developing
the Valleys tourism potential, WTB has supported the development
of the Herian initiative that was launched in March of this year.
The aim of the initiative is to maximise the economic and social
development potential of South Wales' rich and unique heritage
for the benefit of current and future generations. The launch
of Herian follows two years of research and planning and provides
a framework for partners across South Wales to work together in
a strategic and co-ordinated approach for improved interpretation,
development and promotion of South Wales cultural heritage. WTB
recognises that economic regeneration must be the first priority,
as tourism will follow when economic conditions for local communities
improve.
Key areas being addressed through the initiative include
the following:
— Linking heritage to regeneration and development.
— Using heritage to foster enterprise and interest
in modern industry.
— Promoting heritage as a catalyst for environmental
improvements.
— Engaging the interest, participation and ownership
of communities in local heritage.
— Developing educational opportunities with schools
and colleges.
— Enhancing visitor experience at existing heritage
sites.
— Prioritising current and future heritage proposals.
— Creating a strong new product image.
— Staging a promotional campaign to contribute to
the profile of South Wales.
Within rural Wales, WTB, with funding support from the Welsh
Assembly Government, has established a working party of independent
experts chaired by WTB Board Member, Christine Lewis, to review
the future of Countryside Tourism. This review will be examining
best practice in UK and Europe in terms of public sector interventions,
visioning what should be the countryside tourism product that
we sell to the visitors and testing the vision through consumer
research. The working group will be making recommendations on
what would be the most effective and sustainable funding and implementation
mechanism for the development and promotion of the countryside
tourism product at the overseas, UK, national, regional and local
levels.
Tourism has over the last decade been playing a growing role
in the rural economy as agriculture has declined. It is the most
obvious sector for farmers for instance to diversity into. Research
over the years consistently demonstrates that the beauty of our
rural landscape is the primary motive for our visitors selecting
Wales as their holiday destination. WTB through its development
of a range of activity tourism products such as walking, cycling,
fishing, and water sports has sought to make rural Wales more
attractive to the growing short breaks market and attract more
visitors outside the peak season.
UK GOVERNMENT AND
EU INVOLVEMENT
The Board has been active in accessing Objective 1 and Objective
2 funds to support the tourism industry. The decision of the Welsh
Assembly Government to offer the opportunity to bid for Pathways
to Prosperity funding has ensured that the impact of structural
funds has been greater than in previous years.
The Wales Tourist Board's Integrated Business Support Scheme
is the only route through which small and medium sized privately
run tourism businesses can directly access Objective 1 funding.
A total of 286 SMEs have been helped by £13.5 million of
grant assistance to date, which has generated a total investment
of £44.1 million. This makes it far easier for SMEs to access
European funding then if they had to apply direct.
A smaller scale Integrated Business Support scheme is operating
in East Wales under Objective 2 where £1.4 million of ERDF
funding has been made available to support tourism SMEs.
WTB has also been successful under Objective 1 in securing
£9 million of ERDF funding to enhance our overseas and UK
tourism promotion and marketing activities. This has included
funding for a new joint marketing business support schemes to
provide funds to assist tour operators and groups of tourism businesses
with innovative marketing ideas that will bring tourists to Wales.
SUPPORT FOR
SMES
WTB offers support for tourism SMEs through its capital grants
scheme referred to earlier, where grants or loans are available
to assist tourism businesses in Wales undertaking capital investment
in line with our development priorities. During 2002-03 we assisted
169 projects by SMEs with a grant allocation of £10 million
which generated a total capital investment of £51 million
and created 803 full time equivalent jobs.
WTB's Integrated Business Support Scheme offers SMEs a wide
range of business advice and signposts other services. Information
is provided on:
— Information technology and e-commerce
— Environmental performance
A range of publications for new and growing businesses is
offered together with specialist advisory services. Publications
include Guide to Legislation, Developing a Successful Tourism
Business; Greening Your Business; Sense of Place Toolkit; and
a series of fact sheets on marketing and market research, most
of which can be downloaded from our WTB online website. The WTB
online website also provides comprehensive advice and information
for the trade.
21 October 2004
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