Examination of Witnesses (Questions 360
- 374)
TUESDAY 8 JANUARY 2008
MR STEPHEN
DOWD
Q360 Mr Hall: A very significant
part of the business, from evidence we heard earlier in this session,
is that of business tourism—the high end, the very high
value business. The UK seems to do very well out of that and we
heard evidence earlier about the UK being a magnet. Is there anything
further we can do to safeguard and grow that business?
Mr Dowd: That is a good question.
I think most of those are beyond our control. Businesspeople will
travel if they are required to. As a downturn in the financial
markets for 2008 seems likely, the chances are we will see less
business travellers. Companies who are under pressure will also
limit the amount of travel their employees can make. I think we
are going to have a much more difficult scenario for 2008.
Q361 Mr Hall: When we have seen the
growth for 2005 and 2006, is there anybody who should take credit
for that?
Mr Dowd: VisitBritain, our national
tourist board, has done a very good job on our international marketing
and we do support their efforts fully. They have done well, particularly,
in dealing with crises. As you probably know, I am a member of
the Tourism Industry Emergency Response Group and we have worked
very hard to ensure that our response to each crisis as it has
come up has been dealt with in the best possible way. We have
used the intelligence that VisitBritain has gathered in markets
around the world to make sure that our response was appropriate
and we have got pretty good at this over the years. We have had
to. Having that available and using the press and using the media
to put out positive messages about the United Kingdom, has helped
enormously to restore confidence in the UK as a destination and
to attract people to come here. I think you heard Bob Cotton earlier
allude to the rebound effect on cities that have been devastated
by terrorist activities. People want to support you if they possibly
can.
Q362 Mr Evans: If cheap airlines
did not exist, do you think the people who float around the sunnier
climes of Europe would holiday in Britain?
Mr Dowd: Probably not. The trends
have always been that UK citizens would prefer to travel abroad.
I think the low-cost carriers when they were set up were really
answering that demand from the UK citizens, which is why the UK
is the European leader in low-cost carriers and most of them are
based here. With the model that they have, the point-to-point
flights, the model is that they will market to their home market
first, because that is the easy one to get, and they will then
take people abroad. In recent years we have seen that we are reaching
saturation point through many of the airports on many of these
routes, so these airlines are now marketing to their target destinations
as well to fill the aircraft and make sure they continue to grow
the business. That has benefited us by bringing inbound visitors
from those cities. Some of them are cities you would not expect
to generate business for the UK because many of the visitors have
probably have never even heard of the UK's regions or know nothing
about the cities they will be flying into, if they are flying
into LeedsBradford or Manchester. A net benefit, I think, is starting
to show for the UK in our sector.
Q363 Mr Evans: That is a good point:
do you think some of the airports they do fly from, particularly
in the Midlands and the north west and east of England, ought
to be doing a lot more—maybe through the Regional Development
Agencies, the local authorities—to sell those areas as tourist
destinations for people in Spain, Portugal and the various other
places that people go to?
Mr Dowd: I think there is a move
afoot now, in that people are recognising that these direct links
are important and they are establishing them. The trouble we have
with the Regional Development Agencies is that they all do things
in different ways. It is quite confusing for perhaps some of the
destinations to know how to work with them to market the places.
I would like to see some more clarity in that if we could. Overall,
I think it is great that we are raising awareness of the regions
of England and Scotland and Wales to these destinations. It can
only be beneficial in the future.
Q364 Mr Evans: Mike mentioned business
travel, which is important, but all inbound tourism has to be
useful. A lot of visitors will come through Heathrow. What is
your opinion of Heathrow? How bad is it?
Mr Dowd: How bad is it? Sadly,
I believe that Heathrow as it is today is a national disgrace
and Gatwick is, frankly, not much better. However, I do think
it is very unfair to blame the current management of those airports,
Ferrovial, entirely for this. While normally in favour of private
enterprise, as you would imagine, I do believe our national airports
are strategic national assets and perhaps they should never have
been privatised in the first place. What is worse is that, as
a private company, BAA spent, I believe, a number of years fattening
themselves up for sale and focused too much on the profitable
retail elements of airports and not enough on customer service
and the comfort of the people using the airports. I think Ferrovial
have been sold a pup and are now unable or unwilling to invest
the money that is necessary to bring the airport up to the standard
that we should expect. I think we need to go back to basics as
far as airports are concerned, in that we should have looked for
safe, inexpensive, quick, efficient and comfortable transit of
passengers. That should have been the priority here. Plentiful
clean and working toilets are essential. Comfortable waiting areas
are important. The ability to get a meal and maybe something to
drink would be good, but luxury shopping malls are completely
superfluous and should have nothing to do with the running of
an airport.
Q365 Mr Evans: Do you think BAA should
be split up? Should Heathrow be separate from Gatwick? Would that
lead to an improvement for the customer?
Mr Dowd: Whether BAA should be
split up or not is, I think, frankly, irrelevant. What is more
important is whether our national interest is being best served
by a company that is driven by profit from retail activity? Whether
it should be split up or sold or whatever, I think we should perhaps
think more in terms of "What are we looking for here?"
Maybe we should have somebody to operate just the security, handling/transit
of passengers, air operations and the estates and then somebody
else who runs maybe the retail side of it. That might be a better
model to get what we need, which is to look after our passengers
more effectively.
Q366 Mr Evans: Schiphol Airport is
clearly doing things right: they do not have the same problems
there; they certainly do not have the same reputation. Charles
de Gaulle used to have a bad reputation, now it is a lot better.
Frankfurt has a good reputation. It seems as if we are losing
out a lot on transit customers coming through the UK—indeed,
then people get a taster and want to come back. Security seems
to have been a bugbear of the airports over the past two years.
Do you think there is any justification for the way in which the
customer has been treated during the two-year period?
Mr Dowd: Not at all. I think it
is totally inexplicable. When we had the problems two years ago
at Heathrow, we were assured that they were going to employ more
security staff, and it was going to take six months to recruit
and train them and thereafter we would be fully manned, and yet
I go through Heathrow and Gatwick fairly regularly and I still
see lots of very expensive machines for scanning passengers which
are idle while there are long queues. Frankly, I am appalled that
it is allowed to continue.
Mr Evans: Thank you.
Q367 Chairman: Could I ask you now
about another aspect of international comparison: the cost of
visas. We have received evidence that, because of the significant
increase in the cost of visas, Britain is being left off the schedule
for those doing a tour of Europe. How significant a problem is
it?
Mr Dowd: It is a big problem,
particularly in the developing market in which we have to invest
for the future. The growth of international travel is in developing
markets such as India and China, and over the last two years we
have seen a doubling of the price of a visa. It is now £63
for a visa. That simply does not compare very well with the rest
of Europe. You can get a Schengen visa—and from 1 January
this year there are now 21 countries that you can go to with one
visa—which costs, on average, 40 euros. We are double the
price at least of that. We need to look at that very carefully
to make sure we are not putting additional barriers in the way
of people choosing the UK as a destination of choice.
Q368 Chairman: Do you see any sign
of the Home Office listening to that argument?
Mr Dowd: Not really at this time.
UKvisas has just been absorbed into the Borders and Immigration
Agency. We had made some good headway with them in explaining
the difference between migrants and tourists but I am concerned
now, with BIA taking over. Their focus is very much on controlling
migration and I think there are some fundamental differences.
I would want to say straight up that we certainly do not support
unrestrained immigration and we support the current method of
risk assessment for potential visitors from citizens of those
countries where the Foreign and Commonwealth Office has concerns.
We fully support that. We have a problem with the way the cost
of those visas and that risk assessment is allocated. The Home
Office and BIA simply have not grasped the differences between
a migrant and a tourist. As a guideline, I would use the rule
of thumb "Who benefits?" If somebody is coming to the
UK to live, to work, to get married or to have an education, they
will gain some substantial benefit from that. It may well be economic
benefit, but they will gain substantial benefit. If a tourist
comes here who has already passed through the system and is deemed
to be a genuine tourist, they spend their hard earned foreign
currency here, we benefit from export earnings and then they return
home. If they are deemed to be an acceptable risk, we should treat
them differently simply because we benefit more than they do.
I think that is where the balance has got a bit lost.
Q369 Chairman: Given that a large
amount of our immigration control is at the border, is it realistic
to suggest that you could have a very short four week visa at
low cost which it would be easy to obtain? Would that not present
an opportunity for those people to come in and then not leave
again?
Mr Dowd: I have served on the
UKvisas Tourist Visa Taskforce for the last two years and we have
tried to get something like that put in place. The problem they
are having is that the cost of risk assessing potential visitors
is very high and they are bound by a Treasury rule which says
that they must recover all the cost of their operations from the
visa fees they charge. That is why the visa fees have risen so
dramatically in the last couple of years. Until we break that
rule, I do not think that is going to happen because, whether
somebody is coming for 30 days or 60 days or six months on their
visa, the cost of the risk assessment is exactly the same. We
must break that Treasury stipulation of full cost recovery and
think about a graded approach so that genuine tourists have a
much more reasonable price. If that means putting up the cost
for those who wish to come and live here and work and gain economic
benefit, then we would be all in favour of that.
Q370 Chairman: You have been critical
of the Home Office and the Treasury. Can I turn now to DCMS, which
you said, in October, had "completely lost the plot"
in relation to the funding settlement for VisitBritain. Could
you perhaps expand a little on why you think VisitBritain deserves
to receive rather more than DCMS proposes to give it?
Mr Dowd: First of all, regarding
me being critical, I have to say to you now that I am normally
a very positive person and I am happy to give credit where it
is due. It gives me no pleasure to be critical of any of these
government departments or, indeed, DCMS. I just wish there was
more from DCMS that I could applaud or commend. Sadly, DCMS has
given tourism, and specifically inbound tourism, little if anything
to be happy about during my tenure in this role. Most of my criticism
has echoed what was said by the last CMS Select Committee Report
in 2004 and, frankly, little has changed. At that time, that Report
said that the attitude of DCMS was a laissez faire attitude.
That was probably right at the time but things have become a bit
worse since then. I would, however, point out that I did congratulate
James Purnell on his handling of the flooding problems last summer:
he was genuinely engaged; he acted promptly to ensure that tourism
was considered very early. I would welcome more opportunities
to be more positive. You then asked me about VisitBritain. VisitBritain's
funding this year was, I think, a dreadful mistake. It really
is not good enough for the national tourist board, which by international
standards is modestly funded, to have their funding cut just as
we come to the lead up to the Olympics in 2012. Global competition
is now more fierce than ever before, and, if we are going to be
successful, and if we want to have a real inbound tourism industry,
we have to have destination marketing. That is not something that
the industry can do for itself. Quite simply, they are predominantly
small businesses, and it is impractical and unrealistic to accept
that they could do destination marketing themselves. It has to
be done by a central national body and that is what VisitBritain
is. These savage cuts mean that we will be facing less marketing
from VisitBritain to the international markets over the next three
years. It is not just the staff in London. One of the things DCMS
seem to think we can do without is the international offices,
yet we feel they are absolutely vital to what VisitBritain does.
They provide a local contact point for the people who are out
there selling Britain to those countries. They can give them intelligence
on what is going on. They could help with strategic marketing
and tactical marketing in those particular areas. To lose that
would be a fatal mistake. I would again refer back to the TIER
Group: we would not have been able to respond to the terrorist
atrocities that took place in London if we had not had those offices
around the world who were able to feed back to us how Britain
was perceived and thought about in those countries during that
difficult time. It was absolutely crucial.
Q371 Chairman: VisitBritain are going
to have to make cuts in some areas. In which areas should they
make cuts?
Mr Dowd: First of all, could I
make an observation. I am worried why this review that VisitBritain
has been asked to conduct has come about following the announcement
of the Comprehensive Spending Review. I understand that VisitBritain
submitted their CSR bid over a year ago and I just wonder, if
that bid was so out of step with what DCMS thought they should
be doing, why did they not ask for that review then, so that it
could have been completed long before the CSR announcements were
made? It strikes me that, now the money has been divvied up, they
are looking for something to give a patina of legitimacy to that
cut. That is what worries me about the review. I have received
assurances from the Chairman of VisitBritain that there will be
an independent review. I hope that it comes to the conclusion
that we need more money for VisitBritain, not less. As to what
they should do, I think it is really quite simple: they are going
to have to go back to basics as well. Destination marketing, both
above the line and below the line marketing, should be their priority,
as well as maintaining on-territory representation. If that means
they have to cut some non core activities, then that is what they
are going to have to do. The hotel quality assurance scheme dealing
with the star rating system is something they could move out to
private hands or to another body. Maybe that is something that
should be elsewhere. Maybe the RDAs could take it over.
Chairman: Thank you.
Q372 Philip Davies: Your view that
DCMS has completely lost the plot is obviously shared by your
members, because the poll we did recently found that 14% felt
that DCMS should retain responsibility for tourism and 44% thought
it should be moved to another department. To which other department
should it be moved?
Mr Dowd: The final bit of that
survey probably answers that, which is that 42% believed that
it would make no difference where it went because of the low esteem
in which tourism is held.
Q373 Philip Davies: So every government
department has lost the plot, has it?
Mr Dowd: No, no, not at all. You
are putting words into my mouth. I am saying that, if it is moved,
then we have to start the education process immediately, from
day one, with a new department. At least DCMS has some basic understanding
of what tourism is about. That is of some benefit. Moving to another
department I do not think is the answer. I think the answer is
getting the officials within DCMS, and a dedicated tourism minister
who will spend the whole of his or her time dealing with tourism
and not the many other issues that currently are dealt with by
the Minister.
Q374 Philip Davies: In a number of
different inquiries we have done on all sorts of subjects, one
theme that we come across time and again is that people do not
think that DCMS has any particular clout in government; that it
may well be sympathetic to various different interests and industries
but it does not have the clout within government. Is that what
you feel, that it might be sympathetic to tourism but it does
not have the clout? Or do you just think it is not sympathetic
to tourism at all?
Mr Dowd: I have to conclude that
I think there is a lack of understanding or a will to understand
tourism in DCMS. They are very much focused on culture and media.
I think they feel those are much more interesting topics for their
time and effort than tourism Perhaps I could give you an example.
For us one of the worst times was in February 2005, when the Home
Office and UKvisas announced that visa prices were being increased
by about 85% overnight. There had been no prior consultation with
the tourism industry or even communication of their intentions
to the tourism industry. We only found out about it through press
releases, so we thought we would turn to DCMS and find out what
was going on, only to learn that they had found out about it through
the same press releases. If DCMS does not understand what is happening
with UK visa prices, which is a matter fundamental to tourism,
then we wonder what else is going on. I had a letter from Richard
Caborn, 12 months before that increase, in which he promised to
raise the matter of the price of visas with the Home Office, and
yet they still did not deem it necessary even to inform DCMS in
advance.
Chairman: On that note, may I thank you
very much.
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