Memorandum submitted by the British Hospitality
Association
1. The British Hospitality Association is
the national association for the hotel, restaurant and catering
industry. Our members operate over 40,000 establishments, employ
over 500,000 people and turnover in excess of £20 billion
a year.
2. The Inquiry seeks evidence on seven topics
and we comment below on all of them, though our main remarks are
about sponsored bodies and the London 2012 Games.
THE CHALLENGES
AND OPPORTUNITIES
FOR THE
DOMESTIC AND
INBOUND TOURISM
INDUSTRIES
3. The biggest challenges for the tourism
sector in the UK are to improve skills, quality and infrastructure—and,
generally, the welcome we provide in terms of airport access and
signage, and the ease of obtaining visas. However, giving customers
better value must be the key driver; the tourism deficit reflects
a lack of price competitiveness.
4. On skills, we have been very supportive
of the Sector Skills Council for hospitality, leisure, travel
and tourism, People 1st, whose work has made it clear that a lot
more has to be done to re-design the qualifications framework
and to encourage people to join the industry.
5. On quality, we continue to work within
the Quality Review Group, comprising the national tourist boards
and the AA, on the harmonised hotel classification and grading
scheme, which will, over time, need to develop common criteria
in relation to the environment and to disability access and service.
The scheme will also need to be reviewed on a regular basis in
the light of current participation levels and feedback, especially
from those hotel groups which have committed to participate with
their brands.
6. On infrastructure, we fear a gridlocked
Britain with poor inland transport, congested airports and a bias
in many local authorities against tourism and other development,
all creating a road block to future tourism growth. There has
to be better integration of public transport at all levels—national,
regional and local.
THE EFFECTIVENESS
OF DCMS AND
ITS SPONSORED
BODIES (SUCH
AS VISITBRITAIN)
IN SUPPORTING
THE INDUSTRY;
AND 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
7. Given the constraints on its funding
in recent years, VisitBritain has done a good job for the industry.
Where the industry has been actively involved, as with the Million
Visitor Campaign which helped to rebuild inbound tourism after
foot-and-mouth in 2001, the results can be excellent.
8. Unfortunately, the tightness of funds
is expected to worsen under the Comprehensive Spending Review.
At the same time, Scotland and Wales are taking an ever greater
role in overseas marketing, while the England Marketing Board,
part of VisitBritain, is similarly beginning to take an active
part in these markets.
9. All of this is being done under a structure
dating in effect from the Development of Tourism Act 1969, but
since much tinkered with, to abolish the English Tourist Board,
to bring the Wales Tourist Board into the Assembly Government,
and to devolve the marketing of London to the Mayor.
10. The first step therefore, with a view
fully to accommodating the devolution settlement, should be a
review of the Development of Tourism Act 1969, with recommendations
for the future structure of tourism in the United Kingdom, including
the funding arrangements. This might also look at whether the
current structure of domestic marketing within English regions
and areas could be more effective, more consistent and less costly.
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
11. The Tourism Alliance, in which we play
a leading role, is submitting detailed evidence on taxation issues.
We concur with that submission. Assessing the likely impact of
a Bed Tax which was imposed at the discretion of local authorities
is difficult, but, if all authorities imposed it, our submission
to the Lyons Inquiry suggested that, across the UK, a 5% tax could
reduce inbound tourism revenues by £220 million and domestic
by £325 million. The inbound loss is based on Nottingham
University research that a 1% increase in prices relative to competitors
reduces international tourism by 1%.
12. Adding a bed tax on top of the existing
17.5% VAT on hotel accommodation would make the UK industry the
second highest taxed in Europe (after Denmark). It would also
effectively more than double the contribution of hotels to local
authority funds from around 3-4% of turnover to around 8-9%.
13. We do not believe the Treasury would
be sufficiently sympathetic to the hotel sector to compensate
for this by reducing VAT to the 5.5% level enjoyed by the French
industry.
WHAT DATA
ON TOURISM
WOULD USEFULLY
INFORM GOVERNMENT
POLICY ON
TOURISM?
14. There are numerous defects in the data
relating to the tourism industry. At its simplest, not everybody
arriving in the UK is counted in, so inbound arrivals data are
bound to be suspect. Certainly, our members suggest turnover is
rising faster than the official figures for inbound tourism spend
indicate.
15. Having said that, it is hard to assess
whether imposing a significant regulatory burden of data provision
on hospitality and tourism businesses would lead to effective
responses to the data by government. While the arguments for better
availability of data are accepted, we would certainly be concerned
if resources were withdrawn from tourism marketing in order to
devise bigger and bigger tourism satellite accounts systems.
THE PRACTICALITY
OF PROMOTING
MORE ENVIRONMENTALLY
FRIENDLY FORMS
OF TOURISM
16. We have little doubt that environmental
taxes on tourism will become more widely imposed over the coming
years. Being positive, the emphasis will be largely on areas such
as carbon trading, on which DEFRA has recently consulted us, rather
than on further increases in Air Passenger Duty (APD), where the
tax raised is not hypothecated to tourism. In any event, evidence
from the Tourism Alliance suggests that passengers paying APD
at the new rates are paying some 2.5 times their carbon cost.
More efforts need to be made—and sustained—to encourage
businesses to adopt better environmental practices, including
advice and incentives to encourage awareness and adoption of new
technologies reducing carbon usage, clear methods of measuring
such usage accurately.
HOW TO
DERIVE MAXIMUM
BENEFIT FOR
THE INDUSTRY
FROM THE
LONDON 2012 GAMES
17. The association submitted detailed evidence
to the DCMS Welcome>Legacy consultation. A summary of our response
follows:
We were pleased to be able to support the Olympic
bid, especially in relation to accommodation, where we were instrumental
in putting the entire requirement together under a standard contract
of supply. We were also signatories to the Tourism 2012 Charter.
We are equally pleased that timely thought is being given to the
contribution the tourism industry can make to, and the long-term
benefit it can derive from the 2012 Olympic and Paralympic Games.
We begin our response with seven suggestions
and proposals in the spirit of the consultation:
We are clear that, if the UK is to take away
from the Games a reputation for quality, it must be a "no
exceptions" rule that all public accommodation, ie that outside
the Olympic Village, which is offered to Olympic officials, participants,
press and other visitors as part of the Olympic "offer",
must be quality assured through the harmonised grading scheme.
Recruiting and training the estimated 70,000
catering/hospitality workers needed to support the Games is a
major challenge. The process could be aided in two ways: first,
by having a quality induction programme, hopefully encouraging
many of those involved to make their careers in hospitality as
a result—this could build on the Manchester Commonwealth
Games PVP programme; secondly, by building up the People 1st (Sector
Skills Council) Skills Passport programme, ensuring it has widespread
industry support, so that all 70,000 are given the means to take
their careers forward.
There will, we understand, be a number of training
camps around the UK in the various sports, enabling both domestic
and overseas competitors to acclimatise. These camps should be
offering local foods and services.
The UK hospitality industry is one of the most
diverse in the world. Almost nowhere else can you find such a
wide range of offers. Ethnic restaurants are at the heart of this.
Using VisitBritain's marketing skills to bring together visitors
from round the world and ethnic cuisine reflecting their experiences
will help to show off this diversity in a very positive way.
DCMS should ensure that tourist industry groups
and representatives make a good "show" at Beijing as
a means of telling the world that it will have a wonderful experience
in the UK in 2012.
OLYMPIC HOSPITALITY MAGAZINE
A regular magazine should be produced, showing
the world what the UK industry can and will achieve in 2012 and
showing best practice to other UK hospitality operators.
The Government must ensure a hassle-free means
for Olympics competitors and other visitors to obtain visas. It
must also ensure that Immigration officials are welcoming and
that airport security is sensitively conducted.
18. As an additional but important point, all
food service outlets involved in the Olympics should promote and
"showcase" the use of British sourced food wherever
possible. Also, there needs to be planned, not ad hoc involvement
of university and college hospitality students in providing part
of the catering labour requirement for the Games.
19. We hope the above extract from our Olympics
response, along with the rest of our response to the Committee's
consultation, will be helpful.
20. I confirm that we have no objection to this
response being made publicly available.
March 2007
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