Memorandum submitted by South Hams District
Council
South Hams District Council is a relatively
small rural local authority covering a wide area of sparsely populated
territory; our business profile comprises SMEs, which are mostly
quite small.
The South Hams district covers an area of 350
square miles of South Devon and has 60 miles of coastline. The
district has a population of 80,000 and six market towns—Totnes,
Dartmouth, Ivybridge, Kingsbridge, Salcombe and Modbury.
The Council is committed to improving the well
being of the people of the South Hams. Its priorities and measures
are as follows:—
— Secure a supply of housing for local
people at affordable levels
— Create the conditions for the growth
and maintenance of quality economic activity
— Maintain a clean environment
— Maintain the district's distinctive
environment whilst enabling access and sensitive development
— Work with others to improve access
to key services
— Improve core service performance
in a cost-effective way
1. The challenges and opportunities for the
domestic and inbound tourism industry including cheap flights
abroad and their impact on traditional tourist resorts.
1a Figures published by the Office of National
Statistics (ONS) show an £18.8 billion trade deficit for
the UK on air travel in 2005 compared to a deficit of just £2.0
billion 10 years earlier.
1b The domestic market is by far the largest
and therefore the most important market to the South West's tourism
industry and the fact that it is often as cheap or cheaper for
UK residents to holiday abroad must have a detrimental effect
on the tourism economy. This would suggest that the aviation industry
is being subsidised at the expense of the tourism industry.
2. The effectiveness of DCMS and its sponsored
bodies (such as VisitBritain) in supporting the industry
2a The overseas market does not benefit
or affect our tourist industry a great deal unfortunately, with
an estimated total of only 7% of visitor spend associated with
visitors from outside of the UK. This is why it is so important
for the UK to be seen as a value-for-money destination, both by
UK residents to encourage them to holiday at home and by overseas
holidaymakers to encourage them to visit the UK.
2b The DCMS and Visit Britain clearly have
a role to play in the promotion of tourism but they are not seen
as being particularly effective for our rural district.
2c There is a job to be done to persuade
more British people to holiday at home, help save the planet and
bolster the economy but this can only be done by a sustained well
funded campaign which doesn't appear to be happening at present.
Such a campaign could help reduce the imbalance between the amount
that UK residents spend overseas and the amount spent by overseas
visitors in the UK.
2d The seemingly constant bad news broadcast
about serious crime must have a detrimental effect on the work
that the DCM and VisitBritain do to promote the country.
2e The tourism industry in London may be
booming but rural areas such as ours need more support than they
receive at present.
3. 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.
3a The lack of funding of tourism in England
compared with the funding provided to Scotland, Wales and Ireland
is an issue that has been raised with the Government many times
to no avail.
3b When looking at recent increases in funding
support, it would appear that tourism is a much lower priority
for the DCMS than Media, Sport, Museums, Libraries, or The Arts.
3c England has lost the integrated network
of national and regional tourist boards and there appears to be
little co-ordination between these organisations in promoting
the country.
3d The regional tourist boards have to rely
on the good will of the RDA to fund their activities in competition
with other industries.
3e There is some confusion as to whether
the regional tourism boards or the RDAs are responsible for promoting
regional tourism.
3f There is far too much duplication in
the promotion of tourism throughout the country.
4. The effect of the current tax regime (including
VAT and Air Passenger Duty) and proposal for local government
funding (including the "bed tax") upon the industry's
competitiveness
VAT
4a The high rate of VAT imposed on the UK's
tourism industry has contributed to the higher costs of holidaying
in the UK over most European countries and has subsequently contributed
to a decline in market share.
4b Research shows that the total tax taken
from overseas visitors is a minimum of 35p in every pound spent
in the UK and the third highest in the world.
4c In Europe, only Germany and Denmark have
a higher rate of VAT for the tourism sector than the UK, with
most EU countries operating a reduced rate of 8%.
4d The negative effect on the Danish tourism
industry has led the industry to lobby the Government to reduce
the rate of VAT to a level more in line with its European partners.
BED TAX
4e An analysis by the Tourism Alliance suggests
that a 5% increase in tax on hotels would see a decrease of £608
million per year, the equivalent of approximately 6,000 jobs in
the tourism industry.
4f Research has shown that elsewhere, the
introduction of a bed tax has led to a decline in visitor numbers
and has been scrapped as a consequence.
4g One such case was in New York where half
the number of conventions were staged after the introduction of
a bed tax of 5% in 1990. The tax was scrapped in 1994.
4h Another such example is the Balearic
Islands, where a bed tax of £1 per bed per night introduced
in 2002 resulted in lower visitor numbers and was scrapped at
the end of the following year.
INDUSTRIAL BUILDING
ALLOWANCE
4i The abolition of Industrial Building
Allowances, including Hotels Building Allowance in the last Budget
could be a disaster for the tourism industry and will effect rural
areas such as ours disproportionately. It will significantly reduce
future capital investment in hotels in rural areas where the viability
of investment is marginal.
4j This retrospective new taxation will
hit the tourism industry harder than ever before—especially
those who have already spent money on renovations and are now
faced with an unexpected tax bill.
5. What data on tourism would usefully inform
Government policy on tourism?
5a Research to examine Britain as a holiday
destination from the perception of overseas tourists in its key
and emerging markets, including Japan, Australia, USA, China,
India and Europe, its positive and negative images and the reasons
why overseas holidaymakers choose to visit the UK or choose to
holiday elsewhere.
5b Research to examine Britain's domestic
market, including the reasons why residents choose to holiday
at home or choose to holiday abroad.
6. The practicality of promoting more environmentally
friendly forms of tourism.
6a Environmental tourism should not be seen
as niche market, it should be an integral part of the UK product.
6b South Hams in South Devon is one of the
UK's leaders in encouraging tourism businesses to adopt sound
environmental policies in the management of their businesses,
through the Green Tourism Business Scheme (GTBS). We believe that
the principles of the GTBS scheme should be incorporated in the
national quality grading scheme. We do not believe that it is
acceptable to award businesses a quality grading when they are
not protecting or may even be harming the environment through
their business practices.
6c Environmentally friendly tourism should
include local green transport and this is an issue in South Devon
as in other rural areas, which cannot be solved without the necessary
investment in public transport by government.
6d Trade recycling is also an issue because
it is expensive and time consuming and sometimes impossible for
businesses to do. The South Hams District Council is piloting
collection schemes, but for trade recycling to be effective countrywide,
the necessary investment and legislation by government needs to
be put in place.
7. How to derive maximum benefit for the industry
from the London 2012 Games.
7a There may be some lost business from
Devon and Cornwall to London during the games themselves but hopefully
this will be mitigated by pre and post holidays in the South West.
7b A raised media profile in the years leading
up to the games and during the games themselves, would benefit
the whole of the UK. To maximise the benefit from the Games, the
UK must be seen as a holiday destination that is above all safe,
clean, welcoming and value for money.
7c If the opportunity were there during
the Games, showing video or images of stunning countryside and
coast and historic towns and monuments, would be an excellent
way of promoting the UK to the audience and journalists present.
September 2007
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