Memorandum submitted by Wales Tourism
Alliance/Tourism Society Wales
1. INTRODUCTION
1.1 The Culture, Media and Sport Committee
of the UK Parliament has announced an inquiry into the tourism
sector in the UK. The Committee has requested comment from Tourism
Industry representatives in Wales concerning a number of questions
listed later in this response.
2. THE RESPONDEES
2.1 The Wales Tourism Alliance (WTA) is
the co-ordinating body for the Tourism Industry in Wales. It is
comprised of trade organisations and other groups of tourism businesses
in Wales and represents approximately 7000 members of its constituent
bodies. To ensure that all sectors and parts of Wales have input
into the policy-making process, WTA has a pan-Wales Board framework
with an elected group of well-respected and experienced industry
leaders. WTA Chairman, Julian Burrell, himself a representative
of the Wales Association of Self Catering Operators (WASCO) is
joined by, Esther Roberts, (Regional Tourism Companies), David
Williams (British Hospitality Association), Sir Brooke Boothby
(Caravan and Camping sector), Ian Rutherford (Welsh Association
of Visitor Attractions) .Tony McGetrick (Tourism Associations
of South West Wales) and John Walsh-Heron, Chairman of the Tourism
Society Wales (TS-W) who also represents the Tourism Training
Forum for Wales.
The Chairman is a member of the Welsh Assembly
Government's (WAG) Tourism Advisory Panel (TAP) and attends VisitBritain
(VB) meetings as an observer.
The WTA primarily interacts with the WAG via
VisitWales (VW), but also raises policy and other matters directly
with politicians in the Welsh Assembly, Welsh MPs, and Local Government
Councillors and Officers.
2.2 The Tourism Society is the professional
membership body for people working in all sectors of the visitor
economy, with around 1200 members in the UK and worldwide. The
Society was founded in 1977 with the aim of driving up standards
of professionalism in a fast-growing global industry, which can
have major social, economic and environmental impacts on communities
and nations. The (TS-W) network represents the interests of some
85 Tourism Society members who occupy key positions within the
industry in Wales.
3. BACKGROUND
3.1 In statutory terms the development and
marketing of tourism are devolved matters for the Welsh Assembly
Government. Tourism in Wales is nonetheless directly affected
by UK Government interventions and activities in respect of the
fiscal, regulatory and primary legislative framework as well as
sponsorship of major national initiatives (eg the Olympics) and
the remit and funding of VisitBritain, which is charged with marketing
the whole of Great Britain.
These interventions are primarily managed by
the DCMS and hence tourism in Wales is directly affected by the
Department and believes that its evidence and opinions are appropriate
to be taken into account by the Committee.
3.2 WTA and TS-W are aware that many other
bodies are making responses in particular the WAG via its Department
of Enterprise Innovation and Networks (DEIN). Hence we do not
intend to duplicate the quotation of statistical evidence or strategies
in the main body of the text but certain extracts are included
in the appendix.
3.3 We are also aware of the UK statistics
and other financial evidence contained in the responses of both
the main Tourism Society (TS) and of the Tourism Alliance (TA).
We wish to most strongly endorse the parts of these responses
that attest to the importance of tourism to the UK as a whole
and the low level of support that it receives both in terms of
money and manpower within DCMS. (It should be noted that whilst
TS-W is part of the TS, the WTA has no formal relationship with
the TA. Nevertheless it has many areas of common interest and
maintains close liaison with the TA in England).
Therefore this response focuses on Wales' tourism
market and the effect of DCMS upon it. Tourism in Wales occupies
an even more important position in the economy of Wales than it
does in England and therefore the effects of decisions within
DCMS are magnified in Wales.
4. COMMENTS
Within these detailed comments WTA/WT-S are
referred to either as "we" or as "the industry
in Wales".
The Committee has requested comments on the
following:
The challenges and opportunities for the domestic
and inbound tourism industries, including cheap flights abroad,
and their impact on traditional tourist resorts.
Challenges
4.1 In common with all the UK, Wales faces
increasing competition from new developing tourism destinations
coupled with the advance of telecommunications in bringing information
about those destinations to the UK public and to our potential
visitors from overseas. This challenge will continue, to grow
and the only practical way to counter it is to ensure that the
UK product is energetically and skilfully projected into the domestic
and world markets. This requires resource at national level, which
at present is not available as is evidenced by the TA response.
We are aware that on occasion much is made of the fact that the
USA has no tourism ministry and no federal budget for promoting
tourism. Neither does the EU, but the city of Las Vegas alone
has a marketing budget of $187m (approx £100m), double the
whole of the DCMS budget for both UK promotion overseas and England
promotion within the UK combined.
4.2 A second challenge in common with the
rest of the UK is the strength of sterling. This both reduces
the real cost of domestic holidaymakers going abroad and increases
the costs of overseas visitors coming to the UK. Wales has an
additional problem in that most overseas visitors have an additional
intra-UK travel cost and the high price of both petrol and public
transport mitigate against them travelling far from the major
inbound airports of London, Manchester and Glasgow/Edinburgh.
Whilst the industry in Wales would not support a weak currency
it does argue that additional taxation imposts, even for the best
of green motives, must cause it damage.
4.3 The third common challenge is the constant
flow of regulatory measures. Year after year, business resource
that should be put into product improvement and innovation and/or
staff retention and training, is having to be channelled into
compliance with ever more burdensome rules. Wales' tourism industry
largely comprises very small businesses. The proportionate load
on their budgets of a compliance cost of say £5000 for a
particular piece of legislation is very great. Equally the complexity
of modern regulation makes it ever less likely that the individual
entrepreneur is "competent" to implement requirements
themselves. External advisors have to be retained, who, being
in short supply, charge high rates for their services.
4.4 Wales has a particular challenge in
respect of employment. It has an unusually high proportion of
its tourism industry situated in rural areas or small towns. These
areas are experiencing a steady drift in working age population
towards both the English regions and the larger urban centres
in Wales. These economically active people are often replaced
with retirees who themselves require service support from the
public sector. The result is a squeeze on employment which can
only be relieved at present by incomer workers mostly from overseas.
This in turn can threaten the cultural base of small communities
around which the tourism product is built. It is well known that
the Republic of Ireland faces the same problem but within Ireland
politicians and national bodies place a far higher importance
on tourism and offer many incentives to encourage young people
in particular to view employment in hospitality as a first choice
career. By contrast the UK government simply does not give tourism
the same recognition and we urge the committee address this area.
4.5 Developing the skills base and expertise
of the personnel in tourism is a further major challenge. This
has been identified by WAG and VisitWales as one of the five main
priorities for the future of tourism—see appendix. The WTA
in conjunction with the Tourism Training Forum in Wales (TTFW)
have coordinated the response of the industry in Wales to the
development of the National Skills Strategy (NSS). The NSS is
the responsibility of the Sector Skills Council, People 1st, who
have the statutory responsibility to deliver it. The WTA concerns
about this vital document are whether the resources to ensure
its effective implementation are forthcoming.
Opportunities
4.6 Wales derives almost 90% of its tourism
business from intra-UK. If Ireland is included well over 90%.
The best efforts of successive campaigns to increase the overseas
element over the past 40 years and not succeeded in doing more
than maintain the share at a constant level. Therefore the opportunities
for Wales are closely tied to changes in UK tourism demand.
4.6.1 A factor often overlooked in forward
planning for tourism is that if growth in the economy runs at
2.8% then incomes increase by 50% in 15 years and 100% in 25 years.
Even allowing for additional demands from the requirements of
an aging population and the environment, this increase, coupled
with technological improvements, means that people will have more
disposable income.
4.6.2 There is a very major opportunity
for Wales to capture a significant share of this increase both
because it is a destination that can well cater for secondary
shorter holidays and because the increasing age of the population
will mitigate in favour of them making visits within the UK. Concerns
over global warming and taxation to prevent it only add to this
driver although increased travel costs intra-UK eg road pricing
could more than offset this opportunity.
4.6.3 Wales' small businesses are also gaining
disproportionately from the rise of the internet. A well structured
website allows even a small business to directly connect to a
vastly greater market than could ever be afforded via traditional
media.
4.6.4 Because of the devolved responsibility
for parts of tourism the industry in Wales can work directly with
WAG. Given the higher relative importance of tourism in the Welsh
economy it may be possible for Welsh Tourism to achieve a higher
profile and consequent resource allocation than the UK as a whole.
4.6.5 This may be reinforced at least in
the short term by Welsh tourism's ability to assist in implementing
the WAG spatial plan. Tourism is as much a sustainable regenerator
for the post-industrial south-east, as it is for the remote rural
communities suffering from the decline in agriculture.
Low Cost Flights and Coastal Resorts
4.7 It being an ill wind that blows no good,
Wales, in common with many parts of the UK will benefit from a
general rise in temperatures, be they truly significant or merely
perceived. At core the attraction of low cost flights is the ability
to take UK residents to a better climate. If the UK can become
perceived as having as good a climate as many parts of Europe,
or even as a respite area from the overheating south, then the
attraction partly fades and the inbound incentive increases.
4.7.1 Wales' particular problem is its lack
of significant airports. Only Cardiff International carries any
volume of traffic and it geographically occupies the southernmost
point in Wales. Reliance on London, Bristol, Birmingham, and Manchester
to bring in overseas visitors is without doubt a major contributor
to the lack of success of overseas marketing noted earlier.
4.7.2 Once again internal transport costs within
the UK are a serious issue for Wales. It is no good a continental
visitor flying in to Manchester for £50 if it then costs
almost the same sum to reach Aberystwyth. Transport infrastructure
is equally a serious issue for Wales as the same negative applies
to time as to money. A visitor from overseas or from within the
UK does not want to spend a good proportion of their short break
simply getting from airport/home to their destination within Wales.
4.7.3 It is perhaps not without significance
that Cardiff is enjoying ever increasing popularity with younger
people and Cardiff is unique in Wales in having motorway access,
a high speed rail link, and an airport close by.
4.7.4 We believe that Welsh Coastal resorts
are coping better with the impact of low cost flights than parts
of England and Scotland. The reasons are complex but for the most
part Welsh resort towns are smaller and their regeneration has
been a more manageable task for the partnership of local authorities,
the trade and central government that is necessary to tackle the
problem.
4.7.5 Resorts which have diversified and invested
in the quality of their product continue to thrive. For example,
resorts such as Llandudno have made substantial investment in
improving the quality of accommodation and developed business
tourism on the back of a purpose built conference centre. Such
diversification not only reduces the reliance on short break holidaymakers
who may use low cost flights but extends the "season"
beyond the normal holiday periods.
In addition the surge in property values has
not been as large in absolute terms as in parts of England with
the result that there has been less distortion from the residential
and second home sectors.
5. THE EFFECTIVENESS
OF DCMS AND
ITS SPONSORED
BODIES (SUCH
AS VISITBRITAIN)
IN SUPPORTING
THE INDUSTRY
The position of DCMS, as (through English Heritage,
National Museums etc) attractions operator, sponsor of Visit Britain
and regulator for the sector, must itself create problems.
Nevertheless the key difficulty is embodied
in the lack of importance given to tourism by those in parliament
at Westminster. Just because visitors do not vote in the areas
they visit, that is no excuse to ignore them.
So long as tourism lacks credibility at senior
government level, the effectiveness of DCMS in supporting the
tourism industry must suffer. The Department has a wide remit,
and unless DCMS has a cohesive plan for tourism it won't be driven.
Tourism ministers are junior posts, with a high turn over low
profile and visibility. Without a high profile minister who has
a clear understanding of the industry, tourism will continue to
be under-funded by UK Government.
5.1 In real terms the budget for tourism
and VisitBritain has reduced considerably. The "Britain"
brand is important in developing markets, however, recent research
undertaken by VisitBritain clearly indicates that perceptions
of Britain as a visitor destination compare unfavourably against
key competitors.
If VisitBritain and the Britain brand umbrella
are to remain relevant to international tourism in Wales, there
is a need to demonstrate that they are making a real difference
to the competitive position of Britain and Wales in the global
market.
5.2 Other support for tourism is a devolved
responsibility so that it is not strictly for us to comment in
relation to DCMS. However it is worth recording the present position
in Wales. Here it has been appreciated that government's key function
in tourism is as brand guardian with development and marketing
funds channelled to support the brand promise. In Wales tourism
is valued as a wealth creating activity based on the service sector
so responsibility sits within the Department of Enterprise, Innovation
and Networks. Government's role as cultural patron is discharged
through a different department. The partnership is completed by
recognition of the fundamental role of local authorities as destination
managers.
6. THE STRUCTURE
AND FUNDING
OF SPONSORED
BODIES IN
THE TOURISM
SECTOR, AND
THE EFFECTIVENESS
OF THAT
STRUCTURE IN
PROMOTING THE
UK BOTH AS
A WHOLE
AND IN
ITS COMPONENT
PARTS
The industry in Wales believes that there is
an inherent and insoluble problem with VisitBritain also encompassing
promotion for England. The very website names encapsulate the
issue visitbritain/enjoyengland. Whatever the reality, how can
any businessperson in Wales be convinced that the two do not run
together to his/her detriment.
6.1 VisitBritain is accountable to the WAG
but at the same time is promoting the very market from which over
80% of the WAG tourism visitors come from. VisitBritain has to
work with VisitWales but is responsible for promoting its arch
rival, England.
If any such body existed in the private sector
with comparable power in the marketplace of a rival, either regulatory
or competition authorities would be called to investigate. In
Wales it has been likened to the training program of the Welsh
team being controlled by the governing body of English rugby.
6.2 None of this should be taken as criticism
of the team at VisitBritain; they are doing what they can with
a badly flawed system that is not fit for purpose by virtue of
its very composition. We therefore call for a decoupling of promotion
for Britain from that of England.
7. THE EFFECT
OF THE
CURRENT TAX
REGIME (INCLUDING
VAT AND AIR
PASSENGER DUTY)
AND PROPOSALS
FOR LOCAL
GOVERNMENT FUNDING
(INCLUDING THE
"BED TAX")
UPON THE
INDUSTRY'S
COMPETITIVENESS
As noted earlier, the UK has found it difficult
to compete in price terms with competitor destinations for both
long holidays and short breaks. Studies over the past decade and
more have noted the competitive disadvantage to the UK of a VAT
rate of 17.5% as applied to tourism products and services both
in terms of rival destinations (especially in emerging European
destinations). Wales also suffers particularly from the artificial
"jump" between businesses below and above the threshold
(which results in good small businesses being reluctant to grow).
An examination of the VAT rates charged on accommodation in European
member states shows considerable variation across Europe from
3% in Luxembourg to 25% in Denmark with Britain near the top of
the list.[14]
7.1 In 2003, the Tourism Satellite Account
for Wales estimated that direct tourism-related added value in
Wales was £1.3 billion. The vast majority was taxable at
the standard rate of VAT, realising over £200 million. This
has to be set against an investment of £20m in VisitWales.
In addition tourism is seen as a tool for community regeneration
and economic diversification as well as a vehicle for wider promotion
of the country as a brand.
7.2 There are ambiguous messages being received
about Air Passenger Duty—is it purely a regressive revenue-raising
measure or a genuine attempt to curb air travel growth as a response
to climate change? If there was a commensurate reinvestment in
"on territory" public transport provision or road improvements
perhaps the industry would be less cynical about the Treasury's
motives. In net terms however the UK industry would benefit if
more Britons were persuaded to holiday more frequently within
the UK.
7.3 The industry view the "bed tax"
proposal with some alarm as it is a regressive tax, and whether
applied locally or nationally, creates a competitive disadvantage.
Also as noted earlier compliance costs fall disproportionately
on a sector predominantly comprising of micro businesses.
Suggestions of a bed tax would further erode
the UKs competitive position, it would also run counter to efforts
to make tourism more sustainable. Staying visitors probably only
have a marginally greater impact on the environment then day visitors,
but inject considerably more money into the economy. The proposed
bed tax would undermine efforts to increase the economic benefits
of tourism, to convert day visitors to staying visits and encourage
staying visitors to stay longer.
The implementation of such a tax implies the
need for Statutory Registration. Such a tax would require significant
compliance costs, which might be disproportionate to the revenue
generated. Within Wales the minister has already announced that
he has no plans for a bed tax and research has shown no compelling
case for the introduction of Statutory Registration.
7.4 From a South Wales perspective the Severn
Bridges tolls, and the threat of a toll road alternative to the
M4 put the region at a relative disadvantage, as this is a direct
tax on visitors from our main market. The enlightened attitude
of the Scottish Executive in scrapping some bridge tolls, largely
on the tourism argument, is noted.
7.5 In general the industry in Wales believes
that lower business taxes breed greater economic activity, and
that in turn provides more revenue for social purposes, as well
as encouraging more employment and more investment. Low business
taxation in the Republic of Ireland has demonstrated the effect
such a policy can have in transforming an economy that was traditionally
thought of as poor.
8. WHAT DATA
ON TOURISM
WOULD USEFULLY
INFORM GOVERNMENT
POLICY ON
TOURISM?
To improve accuracy of estimates of the economic
value of tourism and understanding of trends in the accommodation
sector, better data on tourism bed stock and tourism expenditure
is required.
8.1 This includes increased sample sizes
for the UK Tourism Survey and International Passenger Survey.
8.2 Other areas that need improvement are:
— Volume and value of tourism.
— Individual Market segments.
— Tourism Employment: When it comes
to employment statistics, elements of tourism, leisure and hospitality—the
visitor economy—are currently spread over a number of SICs,
which have to be disaggregated.
8.3 Further development of Tourism Satellite
Accounts is also vital. Wales has pioneered the development of
tourism satellite accounting to more accurately reflect the overall
impacts of the sector. For comparability it would be more helpful
if all economic sectors were measured on the same basis.
8.4 Arguably, measuring what has happened
is not as useful as predicting what is to come and government
has a major role in coordinating forward-looking research which
destinations and the industry are not able to fund. Where is the
R+D department of UK tourism?
8.5 Data should be comparable against European
measures and standards.
9. THE PRACTICALITY
OF PROMOTING
MORE ENVIRONMENTALLY
FRIENDLY FORMS
OF TOURISM
Tourism depends upon the ability of visitors
to travel by their chosen mode of transport to their choice of
destination. It is estimated that tourism may contribute to up
to 5.3% of global anthropogenic green house gas emissions, with
transport accounting for 90% of this.[15]
However this is tourism as most widely defined and includes business
tourism and visiting friends and relatives, which would occur
almost inevitably.
9.1 The vast majority of UK tourism movements
to and within destinations will continue to be made by private
cars. 91% of UK staying holiday visitors to Wales arrive by car
(UKTS 2005). Public transport alternatives, whether to or in destinations,
are currently devised for community/social reasons rather than
economic ones.
9.2 An improvement could be made by devising
these with the needs of tourism and tourists in mind, in terms
of timetabling, marketing, pricing, access and information. There
have been a number of initiatives in Wales designed to encourage
visitors to explore their destination by public transport, particularly
in the National Parks, eg Snowdon Sherpa and Green Key, Puffin
Bus in Pembrokeshire and Brecon Beacon Bus designed for walkers
to access the national parks without needing to use a car.
9.3 The European Commission recently commissioned
a study aimed at identifying the means of uncoupling economic
growth of tourism and its negative environmental impacts.[16]
This study attempted to quantify the environmental impacts of
various modes of transport taking account of the volumes of trips
taken on each. The study concluded that in many cases coach transport
provides the most environmentally friendly alternative but is
not preferred due to its perceived economic and social disadvantages.
The report recommended the provision of cheap and flexible public
transport or well organised coach travel at destinations.
9.4 Despite all this any realistic appraisal
of Welsh tourism must conclude that private transport, mainly
cars, will remain paramount. Therefore technology and legislation
that moves to reduce the carbon output from cars will have a far
greater effect than any attempts to work counter to customer demands.
Wales along with much of Britain relies on the
successful conservation of landscape and built heritage to provide
the raw material for tourism products. In addition local cultural
distinctiveness provides the reasons for choosing one destination
over another. It is implicit therefore that the tourism industry
in Wales has a long term commitment to environmental and cultural
as well as economic sustainability. Wales has sought to improve
the quality and management of the coastal environment through
a number of initiatives such as the Green Sea Partnership, Blue
Flag Award beaches and the Green Coast Award for rural beaches.
10. HOW TO
DERIVE MAXIMUM
BENEFIT FOR
THE INDUSTRY
FROM THE
LONDON 2012 GAMES
The tourism industry in Wales can see little
or no direct benefit from the Olympic Games. Indeed, potentially,
resources will be diverted from general promotion of Britain to
focus on London and the Games. During the actual period of the
games we are anticipating a significant downturn in visits to
Wales as people either watch or attend the games.
10.1 Thus for Wales the critical issue is
to take advantage of opportunities of the raised profile of Britain
in the 5 years from now until the London Games and in any halo
period thereafter should the games be successful.
10.2 This requires additional marketing
resources, a coordinated cultural events programme and shared
branding. The most important issue of all is for information devoid
of spin to be available early and accurately.
14 The economic effect of changing VAT rates in the
hospitality industry of Hungary, KPMG. Back
15
Gosling, S (2002) Global environmental consequences of tourism,
Global Environment Change 12, 283-302. Back
16
Multi-stakeholder European Targeted Action for Sustainable Tourism
and Transport (MUSSTT) see: www.MUSST.nl Back
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