Memorandum submitted by the Business Tourism
Partnership
1. The Business Tourism Partnership comprises
18 leading trade associations and Government agencies, with an
interest in supporting a competitive, high quality and more profitable
business tourism sector in Britain.
CHARACTERISTICS
2. Business tourism, comprising conferences
and meetings, exhibitions and trade fairs, incentive travel, corporate
events, outdoor events and individual business travel, is currently
worth over £22 billion in terms of its wider economic impact.
In addition it is estimated that the value of business transacted
at trade events generates in excess of £100 billion a year.
3. Over the past decade there has been a
53% growth in all business trips, exceeding the overall tourism
growth rate. Around eight million business visits are made to
the UK each year with international business visitors contributing
more than £4 billion to the British economy. The sector generates
27% of all expenditure by overseas visitors. Business visitors
spend nearly three times more than leisure travellers and it is
estimated that 40% of all business visitors return for a leisure
visit.
4. Business tourism is high quality, high
yield, high spend and year round.
5. Around 530,000 people are employed in
the sector mainly in high skilled jobs.
6. Business tourism complements the leisure
tourism sector using much of the same infrastructure but brings
business to destinations otherwise seasonally dependant, such
as seaside resorts.
7. Investment in business tourism facilities
often leads to regeneration of City Centres and resort locations.
Business attendees at events create opportunities for inward investment
and export earnings.
8. Business tourism is sustainable and manageable,
offering higher added value with fewer negative environmental
impacts than mass leisure tourism.
9. Business tourism will be a major beneficiary
of the 2012 London Olympics. (The Partnership's response to the
Welcome>Legacy Tourism Consultation is attached).
KEY TRENDS
10. Business events operate in a highly
competitive, international marketplace where value, high quality
facilities and services with adequate promotional and support
resources and funding are essential.
11. The industry faces an ever-rising tide
of legislation and regulation, which add cost and present increased
competitive challenges.
12. Changes in methods of procurement in
the process of purchasing event services have put greater pressure
on operating margins, caused the greater need for transparency
with programme costings and created clear requirements to identify
added value as well as providing effective and quantifiable measures
to gauge return on investment. Attractive destinations are no
longer enough—business results are what count.
13. Following the 2006 Stern Report, the
issue of climate change is becoming a key issue for many event
organisers. There are concerns that organisations may well reduce
their commitment to international events which require delegates
to travel long distances. Recommendations for offsetting the potential
environmental damage an event may now become part of any bid for
business. More and more companies are putting CSR policies in
place and expect event proposals to show a responsible and creative
approach that minimises any local impact their event(s) might
have, both socially and environmentally.
14. Since "9/11" security has been
a key issue. Recent events have only served to increase the focus
on risk management and the need for robust processes that protect
both clients and their participants.
15. Within the corporate arena there is
a clear trend towards shorter meetings that are more business-focused
and involve short-haul rather than long-haul travel.
16. Incentive travel, whilst still seen
as an important motivator, remains under pressure from high levels
of UK taxation and also from a desire for clients to avoid the
appearance of extravagance when company finances are under close
scrutiny. The trend with incentive travel is towards shorter,
high impact experiences that combine elements of both soft adventure
and free time. The availability of first-class leisure facilities
is also an important factor. With worldwide travel accessible
to all, the challenge to design and deliver the ultimate travel
reward only increases.
17. Special events, including sporting events,
are increasingly being seen as unique tourist attractions and
as destination image makers. The number, diversity, and popularity
of special events have grown spectacularly over the past few decades
and that growth is set to continue. Events offer a strong emotional
value to consumers and therefore occupy a prominent role in their
life and can influence holiday destination choices. Furthermore,
research shows that major sports events do not just attract more
business and leisure visitors to the region. They also help raise
the profile of the destination, helping to attract inward investors,
inviting customers to make Britain their preferred destination
of choice.
KEY ISSUES
18. The UK is considered generally to be
an expensive destination with a fragmented convention industry
but future business lies in the UK's key strengths which include:-
— Quality and variety of venues.
— High standards of service amongst
UK conference organisers.
— Strength of British science and medicine—British
academics regularly hold key positions with regards to decision-making.
— Ease and speed of VAT reclaim.
— English which is the language of
choice for international meetings.
— The UK is one of the most attractive
destinations culturally for international delegates, ensuring
that congresses held in the UK are better attended and more profitable
than those held elsewhere.
However:
19. With the exception of one or two cities,
the UK is not able to offer large-scale public subvention of conferences,
venues or delegates. This is done in other cities around the world
and can be a deciding factor as overall costs of conventions increase.
20. Public finance for new products and
improvements to existing conference facilities has disappeared
in the UK—except for Wales where a grant of up to £50,000
for such projects can be obtained.
21. The economic importance of conferences
to a Country is far more recognised by the UK's main competitor
countries than it is in the UK. Obtaining governmental non-financial
support for a conference bid is very difficult or impossible.
For example, it was not until 2002 that the Prime Minister agreed
to "front" a conference bid video for the first time
ever, whereas leaders and senior statesmen from other nations
have been supporting conferences in this way for many years.
22. Despite the VAT recovery systems in
place, not every cost can be recovered. Most other EU member states
have lower concession VAT rates for tourists and conference delegates.
23. The importance of the accompanying exhibition,
with its attendant long distance freight movements, is also affected
by the UK's high tax on diesel.
24. Despite active ambassador programmes,
the academic world is still hesitant to bid for international
meetings due to a perceived heavy workload, lack of knowledge
of the available convention facilities and lack of awareness of
the industry support available to them. They are also less enthusiastic
about their own home towns as a destinations compared to their
European counterparts.
25. The lack of a purpose-built congress
centre in London, with a capacity for over 3,000 delegates, is
preventing many high profile meetings, which would only consider
a capital city, coming to the UK. Equally the general lack of
large scale integrated hotel and meeting facilities, such as they
have in the USA and the Far East, is also preventing the UK from
winning many of the large conventions. However, this applies to
most of Europe and, with space at a premium and public money not
forthcoming, the whole European region is at a disadvantage.
26. The fact that the UK has not adopted
the European single currency is a setback in that organising events
in the UK can become more expensive with currency transaction
bank charges.
27. Despite all the above and whatever impacts
technology, global economies and terrorism are likely to have,
there is still the desire amongst international associations to
meet, press the flesh and exchange views which will always remain.
According to ICCA, the UK has continued to host a similar number
of the international association congresses as in recent years
(270 in 2005), although it has dropped to fourth place in the
league table behind the USA, Germany and Spain.
28. The Business Tourism Partnership is
working to encourage a more collaborative and cohesive approach
to winning more international association conferences, particularly
through the involvement of British embassies and consulates, British
Council offices overseas, VisitBritain staff and key government
departments in the UK in the research and bidding processes. It
is also actively lobbying for the construction of a major purpose-built
convention centre for London.
HOW BUSINESS
TOURISM COULD
DO EVEN
BETTER FOR
BRITAIN
29. More resources from VisitBritain's international
marketing budget to be allocated to attracting and promoting business
visitors and international events.
Less than 5% of VisitBritain's international
marketing budget is currently allocated to business visitor and
event promotion despite the sector producing 27% of all incoming
visitor spend. The higher yield from business tourism would enable
VistBritain to achieve a greater return on its investment in overseas
markets and address Britain's declining market share. It would
also ensure that opportunities for business events to be attracted
to Britain would be better understood and more effectively exploited
abroad.
30. Greater assistance to be given by Ministers,
Government Departments and Agencies, in the UK and overseas, to
the bidding process for international events, as is already the
case when bidding for major international sporting events. This
should include pro-active, co-ordinated support and attendance
on visiting delegations and at event openings by the most senior
Ministers, Ambassadors, Trade Consuls and Commercial Attaches.
Included in this area of support should be the
appropriation of funds for subvention policies, joined up government
to prevent areas of conflicting policies which adversely impact
business travel to Britain, eg visa fee increases, airport passenger
taxes, event licensing fee, transport policies, investment incentives
for innovative practices in staging UK events and tax allowances
for event promotion by organisers to overseas markets.
31. More prominence to be given to the benefits
of trade development and export earnings offered by business tourism
activity.
Previous support by the DTI and UKTI for business
support programmes at exhibitions, trade fairs and conferences
have been reduced due to funding constraints and Departmental
rationalisation. More assistance needs to be given to overseas
buyers to attend events in Britain. Market intelligence needs
to be gathered from overseas posts about potential opportunities
for events which could be attracted to Britain.
32. Higher priority to be given to improved
research and data collection.
The DCMS/ONS Tourism Statistics Improvement Initiative
findings should be enacted in full. These recommended developing
more consistent research methodologies, establishing a more accurate
universe of sector businesses and by increasing the number of
ad hoc surveys, including conference delegate expenditures, incentive
travel and corporate hospitality as well as examining factors
that influence purchasing choice. Business trips that qualify
as day tourism should be included in UKTS. A Standard Industrial
Classification (SIC) is urgently needed to enable more accurate
reporting of economic and employment data.
33. A more harmonious structure to be developed
between Regional Development Agencies, Regional Tourist Agencies,
Destination Management Companies and VisitBritain. This is necessary
to achieve greater cohesiveness and a more proactive approach
to business tourism opportunities in England, combined with a
greater understanding of the economic benefits and positive impacts
of the sector's activities within local government.
Business tourism contributes to local and regional
seasonal spread objectives. While most RDAs and some far sighted
municipalities now recognise the importance of delivering appropriate
strategies, more attention needs to be given to co-ordinating
these strategies to avoid duplication and undue competition between
regions and destinations. At the regional and sub-regional levels,
strong and clear national policy guidance and adequate funding
for supporting services, to include the provision of convention
bureaux and publicly owned event venues, is essential.
34. The provision of an International Convention
Centre for London.
The Mayoral Commission, established by the Mayor
of London, has recommended that an international convention facility
capable of holding 5,000 delegates be built in Central London.
The absence of such a facility, now heightened by the staging
of the 2012 Olympics in the Capital City, means that Britain fails
to secure its share of the prestigious international association
congresses and world renowned medical, scientific and technology
events, as well as countless trade and educational opportunities.
The London Development Agency is charged with identifying a suitable
site and examining further the project's feasibility.
The Committee should endorse this project and
press for urgent progress to enable a venue to be constructed
which can benefit from increased demand for London to hold major
conventions and congresses in the lead up to the 2012 Olympics
and also to benefit from the legacy of the Capital City as a major
world event destination.
I hope the above detail will enable the Committee
to include business tourism within its overall consideration of
its inquiry into the tourism sector in the UK. A copy of the Partnership
submission to the DCMS Consultation Paper Welcome>Legacy is
attached.[3]
March 2007
3 Not printed. Back
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