Examination of Witnesses (Questions 522
- 539)
WEDNESDAY 12 MARCH 2008
MS AVIVA
PEARSON, MR
ALAN ROBINSON
AND MR
MALCOLM BELL
Chairman: Good afternoon, everybody.
Can I first of all perhaps say a few words about what the Committee
has been set up to do and why we are in Torquay this afternoon.
We are the House of Commons Culture, Media and Sport Select Committee,
which is appointed by Parliament to examine the administration
of the DCMS, the Government Department, and also to look at all
of the various policy areas for which the Department is responsible.
We decided to focus on tourism for this present inquiry and we
have been holding sessions in London where we have taken evidence
from a number of witnesses, and most latterly the Minister for
Tourism. We also believe it is important that select committees
should have an opportunity to get out of London to go and see
at first hand the challenges facing the tourist industry. Torquay
was an obvious place for us to come and we have already had an
opportunity to have a look round this afternoon, but we are also
here to listen, and that is the purpose of this afternoon's session.
I would like to thank the Riviera Conference Centre for hosting
this afternoon's session. It is quite a big room and it may be
difficult for some of you towards the back to hear. If we all
try to speak up, and because the witnesses are facing in this
direction this may apply to you particularly, we will try and
avoid microphones, but if it becomes necessary we will use them.
Just before we start, I know Adrian would just like to make a
declaration.
Mr Sanders: Yes. We have to make declarations
of interest and tomorrow we will be meeting a number of visitor
attractions, including the Paignton and Dartmouth Steam Railway
and I need to declare that I have a small shareholding in that
company.
Q522 Chairman: Can I start by welcoming
our first three witnesses: Aviva Pearson, the Director of Tourism
for Torbay Council, who has already looked after us extremely
well this afternoon; Alan Robinson, the Director of South Hams
District Council; and Malcolm Bell, the Chief Executive of Southwest
Tourism. Perhaps I could start by asking you to tell us how you
view the state of tourism in the southwest, specifically in Torbay
and South Hams, and whether you are succeeding in attracting more
visitors or whether you are actually looking at a decline.
Mr Bell: That is probably for
me to kick off from the southwest. If we look back we are holding
our own in the domestic market in terms of value. Volume is slightly
down. I think you will notice that in the Bay we are seeing a
loss of hotel and B&B stock. This is remarkably good progress.
I am talking about comparisons over the last six years of variations
up and down. This is remarkable when you look at the stiff competition
we have had from low-cost airlines taking Brits abroad and some
of the issues about maybe being able to tackle some of the other
markets. There has been some slight growth, about 10% growth in
overseas during that period, and one of the challenges in the
future is capturing some of the low-cost market that is now crossing
from Europe. The low-cost flight market and model was developed
in the UK and in the last 10 years it has burgeoned in the UK,
but now there are something like over 30 low-cost operators in
Europe looking for destinations and some of those things are a
challenge for us. It sounds quite good to say we have held our
own but that has been in a period of growth in tourism generally
and the worrying thing is that maybe the underlying things about
holding your own in a period of growth does mean we have got quite
a lot of challenges and moving to more difficult times ahead.
I do not think it is anything to be complacent about. The overall
product is strong. We do visitor surveys every year. The quality
of our welcome is our strength. The quality of the accommodation
is strong, scoring way in the top eighties in terms of people's
satisfaction being good, very good and all the rest of it. The
quality of food and drink has probably been the biggest revolution
in the last 10 or 15 years, becoming quite a unique selling point,
and the breadth of visitor attractions. All of those have their
challenges with regard to the visitor numbers because, as I said,
the value has held up, but visitor numbers are slightly down and
the attraction market is the volume market. I hope that gives
an overview. We are doing all right. Ideally, we should be doing
a lot better but I do see that we have got challenging times in
the next five years. We have had a fair wind in the last ten years
but more challenges ahead.
Q523 Chairman: Thank you.
Ms Pearson: We pretty much mirror
everything that Malcolm has said. We are holding our own. Even
though we have had a loss in beds in this Bay from about 48,000
to approximately 43,000 we have actually seen an increase in the
average length of overnight stay which is now at 7.35 nights when
in 2004 it was 6.7 nights, so we are seeing a steady increase
in that. Also, spend by our visitors in the Bay has gone from
445 million in 2005 up to 449 million as shown in the recent survey,
the Value of Tourism, by Southwest Tourism. We are holding
our own. What I want to focus on is what we can do better and
ways we can improve and this is going to come into the realms
of marketing and with VisitBritain. The DCMS have limited their
budget as to what they can do, but if VisitBritain were able to
get back some revenue so they could market us more effectively
on the international as well as the domestic scene, which is where
we would step in as a local authority, we could become more competitive
with the low-cost airlines.
Q524 Chairman: Thank you.
Mr Robinson: From South Hams'
point of view, which is obviously very different from Torbay in
terms of the nature of the tourism product, our perception is
that tourism nights and spend are falling based on the figures
we have, but one of the issues you are going to raise is about
the inconsistent collection of data and the difficulty we have
in comparing. We are very clear that whichever figures you use,
whether you use local figures or national figures, our prime market
is the domestic market. Something like the high 80s to 90% of
our visitors are domestic. Tourism is vital to the rural economy.
It supports a lot of direct employment and also indirect support
services. Because the environment is our key asset, for us what
we are not trying to do is increase numbers particularly during
the peak season because that undermines the product we are trying
to sell. What we are looking to do is create a quality destination.
We believe we have become one of the UK leaders in sustainable
tourism and we have got Beacon status for that. It is about trying
to encourage tourists over the whole year so that we can give
our local people permanent employment, it is not based on seasonal
employment. Coming back to your key question, are we doing well,
we have a fantastic product but we do believe that we are losing
some of our market. Just to give you an example in terms of domestic
visitor spend, in 2001 we had something like £123 million
being spent, according to the figures, and in 2006 it was down
to £108 million, so a 15% decrease, and in the context of
inflation that probably masks quite a significant decline.
Q525 Chairman: Thank you. Can I ask
Malcolm Bell, we have heard evidence in this inquiry about the
challenges facing the tourist industry right across the UK, things
like the growth in low-cost carriers which is making it easier
for people to go overseas, but in the southwest you are holding
your own at a time when growth is occurring elsewhere. Why are
you not doing better here? Why are you not growing at the same
pace as other areas?
Mr Bell: There are two parts to
that. One of the things that has happened, and it might be part
of the explanation, is there has been a shift in tourism between
Devon and Cornwall. 15 years ago the people in Cornwall used to
say the problem was the trouble was visitors had to go to Devon
to get to Cornwall and now I hear people saying in Devon, "The
problem is people only drive to us to get to Cornwall". That
is really about profile building, picking up on Aviva's point
about marketing. There has been a sort of cache profile with Objective
1 money, a big profile building exercise of Cornwall and I do
believe it is at the cost of Devon. Whereas people used to refer
to "Devon and Cornwall" all the time, increasingly you
do not hear the "D" word, it is just "Cornwall".
That comes up in terms of the problems we have got which are about
profile and marketing. It is about PR. It does not all have to
be about posters and TV advertising, it is about being smart with
what you have got. I suppose the contentious statement I would
make is we have got a great product, people know the product.
There was an organisation that once thought that way and did not
need to market, and that company was Marks & Spencer. It is
an arrogance to say your product is all right and you do not need
to market it because people know you exist. If you do not get
out there the competition does and takes your customers away.
We have got a good product, people do know us, we are holding
the loyal customers, the repeat customers, but we are losing out
on that extra growth of people who do not know us and do not know
how good the product is because we cannot get to them.
Q526 Chairman: You were presumably
speaking for the southwest when you said you were holding your
own.
Mr Bell: Yes.
Q527 Chairman: The fact that some
people now prefer Cornwall to Devon, whereas previously it might
have been the other way around, does not affect the number of
visitors to the southwest. Why is the southwest not doing better?
Mr Bell: It is pure marketing
clout in terms of a challenging area. As I say, you only have
to look at the papers with all the destinations that are on offer
to people and it is a highly, highly competitive market. We are
not a cheap destination, I think everybody knows that. You can
see the World Economic Forum report that said out of 124 countries
we came in at about 121. I would not swear to the figures but
they were close to that in terms of competitiveness. On price,
because it is a property-based business and we are high on property,
there are often borrowings against so you have got to get a fair
rate of return. We comply with labour rules, we comply with health
and safety rules, there is insurance and litigation. All I am
saying is it is not a cheap place to do business and, therefore,
we cannot sell on price. If you are going to sell on quality that
means you have got to get that message across. You can be a bit
lazy in promotion if you are only selling on price, you can get
away with a cheap offering, but we have to get across the quality
message to justify the price we are charging and in many ways
holidays can be a commodity purchase, what is cheapest, and particularly
with regard to the low-cost guys, and I do not criticise them,
they have created a new phenomenon which is people do not expect
to pay much to travel because they have lowered that cost distance-wise.
Q528 Chairman: Do you think the quality
itself needs to be improved or is it just a question of marketing?
Mr Bell: I will be honest, quality
must always be improved as with any product. It would be wrong
to criticise the quality of what we have got, and I always say
quality is what is defined by each segment of the customer, and
all too often when people talk about quality they are thinking
of 5 star hotels and Michelin star restaurants, but you can have
a quality beach café, and that has been another revolution,
and quality holiday parks. There is a requirement to keep investing
but overall the quality is good. There is room for improvement,
I have no doubt but some of the challenges are the product of
the whole experience if you take a visitor experience from thinking
about a holiday, booking it, travelling down, things like the
Kingskerswell Bypass, the experience of when you get on the beaches.
One of the issues we have is Treasury gain the money from tourism
in taxes but the local authorities pick up the cost of tourism.
When you look at some of the quality areas, people would like
to see an improvement in the quality of the public realm, even
though the public realm is quite good, standards are going up,
but that takes investment from local government where sometimes
cash is tight. We are not weak on quality, it is just that every
year, like every other business and industry, you have got to
get better and better and that is quite a stretch for the businesses
and equally, if not bigger, a stretch for local government.
Mr Robinson: I do not think it
is just about marketing, at least in somewhere like South Hams.
Because we do have this base environment that is really attractive,
the problem is people think it is the natural environment but,
of course, it is not the natural environment, it is actually very
carefully looked after. There is an issue around the product.
A big issue for an authority like ours is clearly pressure on
council budgets. For example, tourism is a discretionary activity.
As budgets get tighter for us, it is the discretionary activities
that get squeezed, and particularly things like marketing. If
I can just give you an indication of the scale of the pressures
we might be facing: if we increase our council tax by 1% it raises
just over £45,000, so in a realm of capping of, let us say,
4%, you can see that we raise 200K for the range of services,
therefore there are some really difficult decisions that councillors
have to make. The problem is if you think about the product and
all the things that a local authority perhaps needs to invest
in compared to perhaps spending local money on marketing, you
are talking about beach management, public toilets, quality car
parking, quality refuse collection, street cleaning, the whole
planning regime and quality of development you are achieving,
general contributions to environmental enhancement, so there is
a whole range of areas that a local authority can help to invest
in the tourism product but in the context of declining budgets
it is a real problem. What has been a bit of an issue for us,
and Malcolm raised the issue of European money, is we did have
access to European money, Objective 2 funding, but that is all
coming to a halt. We were using that money quite successfully
to support a whole range of environmental enhancements but we
no longer have access to that money, so that is an issue for us.
Ms Pearson: If I could just address
a couple of points that you raised about quality as well as value
for money. A couple of months ago the BBC came down and interviewed
us because they wanted to see just how much value we had here
compared to other destinations on mainland Europe. Value for money
here is quite high because we are extremely cheap if you compare
us to a place like London or any other city. The quality of what
they get here is quite exceptional. We have a lot of exceptional
properties here, a lot of 4 and 5 star B&Bs and a lot of 4
star hotels, and you are staying in one yourself, the Grand Hotel.
We do have a very good quality base of businesses here. We also
have a quality officer on my team and in the coming months her
job description basically is going to be making sure we have a
quality drive here, always raising the game. We are going to be
having a number of workshops. When we look at the rest of the
picture of what we are offering here in the English Riviera, when
we are talking about funding especially and the way that my budget
has been cut—my budget has been cut by £111,000—because
I am part of the TDA, which is the Torbay Development Agency,
which is a public-private partnership, we are actually given a
lot more leeway to go and raise money in ways such as holding
ticketed events, and we have just gone online with our first online
shop and raising revenue which goes back into our pot which hopefully
will not only cover the £111,000 cut but will even supersede
that.
Q529 Philip Davies: I am not entirely
sure about your analogy with Marks & Spencer. I worked in
retail for 12 years and Marks & Spencer suffered because they
did not deliver what their customers wanted, that was the problem.
I do not know if that is the same problem for you, that you are
not delivering what your customers want. I was quite interested
in the survey that you talked about at the start. You said that
people like the welcome and things like that, but they only get
that when they are here. I wonder if you could tell us from any
surveys that you have done why people choose to come here, or
if you have any information on why people choose not to come here?
Mr Bell: I can tell you why people
come here. The non-visitors are always a bit harder to pin down
for the obvious reason that it is hard to get hold of them. The
reasons why people come here, for 80% it is the environment, those
sorts of issues, but the environment they look at is not just
the natural environment, it is quality of life issues, aspirational
issues, people like to go where almost in an ideal world they
would love to live. That is one of the challenges with second
homes, because the better you are it is almost the Victor Khayyam
thing, they like it so much they buy into it. It is about that
issue of the quality of the environment, natural, the culture
aspects with a small "c" in terms of a good West Country
way of life, it is perceived as a slightly slower pace of life,
and warm and friendly people.
Mr Sanders: Hear, hear!
Q530 Philip Davies: There seems to
be a lot of focus placed on marketing and you seem to say your
product is fit to market. I am not a good judge of that, but how
much is spent on marketing and how much do you think should be
spent on marketing? Who should be spending it?
Ms Pearson: The answers are not
enough, all of us and more from this local authority, and I will
tell you why.
Q531 Philip Davies: How much? What
sort of numbers are we talking about that you think need to be
spent on marketing so you could say, "We are now doing it
effectively"? How much would it cost to do it effectively,
in your view?
Ms Pearson: I really want to answer
this question and I will give it to you American-style: how long
is a piece of string. Basically, however much money we get, the
more you invest, the more that you reap. That is the way it is.
Right now, I would say approximately out of all the revenue that
we are given by the local authority to spend, 200,000 of that
is directly on marketing. That is from the online initiatives,
newspapers, our guide, all of this, the poster campaigns, the
entire realm, and we are seeing the effects of that. For the first
time through the Southwest Tourism Survey and, as I said on the
bus today, since 1999 we have gone into double digits for the
AB1 market, which is the higher spend market, we are seeing our
average bookings right now bucking £150 per booking. This
is all because we are doing marketing. First of all, if we are
talking about on the international scene, VisitBritain needs to
be more heavy-handed in the way that they are marketing. Marketing
is all about aggression, there is no such thing as a soft sell
and, quite frankly, what they are doing is they are whispering
against the wind. There are so many other destinations spending
so much more money and they are reaping the benefits. The whole
issue of destination marketing is very competitive and you cannot
speak softly, you have to be in people's faces. In the 1970s and
1980s Britain had one of the most aggressive campaigns in America.
You would constantly see the men in the big fur hats marching
in front of Windsor Castle and you would hear the music and see
the happy people flying with the flags, Big Ben and everything,
and that galvanised people to think, "I want to go there".
It was not cheap to fly in the 1970s and 1980s, yet it was one
of the times when the highest numbers of visitors were coming
to the UK. This is now the time we should be doing that again,
especially now that we are talking about the Olympics in 2012.
Let us not fool ourselves, we know that London is going to reap
most of the benefits, but with creative and clever marketing everybody
in the UK could actually benefit from the way that we should be
marketing ourselves in the run-up to the Olympics. Again, you
are asking how much money should we be putting into it, the answer
is more than we are now because we are doing well and I would
almost like to say despite ourselves. I think we could be doing
better if we had more investment because people are coming here
because they know we are a good destination. I know you know this,
it has been said many times before, we are number 14, 15 or 16
on the worldwide stage for welcoming people to the country. If
we improve the welcome, improve that product and market ourselves
aggressively and say, "We want you here and we want to look
after you. We have a great destination", it will improve
our bottom line.
Q532 Philip Davies: Can I just press
you on that. I understand the value of marketing, I used to work
in marketing and that is my background, so I understand that it
is valuable.
Ms Pearson: I am preaching to
the converted.
Q533 Philip Davies: Whenever I went
to my board at my company I would say, "This is what I want
to do and this is how much it is going to cost", I would
not just go and say, "Can I have some more money?" Nobody
works on that basis. You go with a plan and ask for a certain
amount of money. What I am trying to get to the bottom of is to
market it effectively, to do whatever you think should be done
so you can sit back and say, "I am now happy with that",
how much would it cost?
Ms Pearson: Are you talking on
a regional or—
Q534 Philip Davies: From you, yes.
Ms Pearson: —from local?
Q535 Philip Davies: Whichever, I
just want some figures.
Mr Bell: I will give you some
figures. The southwest is almost bigger than Wales and Scotland
and you know how much they spend. I would not want that much money
because sometimes I think too much money is there. The role at
regional level, and it is a slightly different destination, is
often through PR and messaging, that brand and image work and
the aspirational bit. There is a big industry that can work with
destinations to convert that into business. When I heard people
talking about 20 or 30 million for Scotland and 10 or 15 million
for Wales, for the southwest I would say two million would be
sufficient because that makes you work smart. It is four times
more than we spend at the moment, but sometimes you have got to
be clever and smart. The other challenge is because of the lack
of leadership in tourism, everybody does the best they can and
we work as best we can but, coming back to your marketing bit,
there should be the whole idea of co-ordination. I get really
frustrated. I used to be frustrated that Wales and Scotland out-pounded
us, and I did not worry about that, but now you have got the English
regions in danger of competing and we need things like the Partners
for England initiative, trying to get people to work together
in a coherent way, to say, "Let's spend three million nationally
on explaining to people the wonders of staying in your own country
and then spend some more down at the next level about the attributes
of each area", rather than nine regions independently all
trying to convert people to stay there without selling the sizzle
about staying in the UK. We are not being cute enough. We still
need some money but we are not being cute enough. That is the
regional/national perspective.
Ms Pearson: I see it from the
local perspective. Approximately £250,000 to £300,000
would bring us back so that we could really compete, not just
on the domestic level with the other resorts, we are one of the
largest resorts right now, but I would like to see us compete
up there with Eastbourne and Blackpool more effectively and aggressively,
and they have just got in the realm of about £300 million
to do a collection of marketing as well as infrastructure works.
With 250,000 to 300,000 I think we could become more savvy and
more aggressive with our marketing.
Mr Robinson: I was going to raise
the point in relation to marketing of some figures I have around
parity and spend between England, Wales and Scotland. In England
it is 29 pence per head of population, £8.63 for Wales and
£7.33 for Scotland. In relation to marketing, because one
of the questions earlier on was who should be spending the money
and how much, one of the things that need to be inputted into
the debate is there needs to be some sort of unified vision for
tourism, a national strategy with an integrated approach to marketing
and who is responsible. At the moment you have got a whole range
of people putting a little bit in. For example, South Hams, it
is going to sound peanuts, for our organisation we spend £46,000
a year on marketing, and again I come back to that 1% of council
tax. Should we be spending that or would it be more useful for
us to invest that into the product, in other words destination
management with somebody else taking responsibility for destination
marketing. It may be that we are investing that money and all
we are doing is pulling people from north Devon, and does that
actually help the region. I think those are some of the issues
that need to be addressed.
Q536 Mr Sanders: You have a strategy
for tourism in the region called Towards 2015. It outlines
the potential for significant growth in the industry. Are you
confident that under the present structure and funding this potential
can be realised?
Mr Bell: No, I am not confident
because I think you can have a plan that is based against the
growth in tourism and us gaining that growth but you have got
to work on it, hence the previous debate, to get that growth.
No, I am not confident at all.
Q537 Chairman: It is your plan.
Mr Bell: It is a strategy, it
is not a plan. The strategy is there, the plan comes underneath
and that needs resourcing.
Q538 Mr Sanders: Presumably Torbay
and South Hams are part of that strategy, they bought into the
strategy that you are applying across the region?
Ms Pearson: Well, we are obviously
trying to adhere to it as much as possible. I have been here for
14 months and we want to work in unison with everybody all the
way up to DCMS level. One of the things which I will say is there
are a number of points which are in the Towards 2015 strategy
from Southwest Tourism which are very achievable to do with short
breaks and the like which we are achieving at this moment. If
I could just mention one other thing and that is Torbay is part
of a new initiative under the charter I have in my hand, which
I will pass to you afterwards, which is Partners for England,
which is an initiative to co-ordinate the delivery of tourism
through senior decision-makers in the public and private sectors.
This is something which is being driven by the Southwest RDA and
one of the stakeholders in this is Torbay. Basically this document,
once it is put into play, and it also supports the VisitBritain
body, should stop duplication and outline what everybody's roles
are from the local authority all the way up to DCMS. It should
also address the problems that we have with our statistics, because,
quite frankly, anyone's statistics in UK tourism are just frightening.
If it was not so serious it would be a joke because the disparity
in the numbers is just not acceptable. I am also hoping that through
this project, which is now achieving lift-off, we can address
a number of issues to do with the way that we are duplicating
our efforts and hopefully it will knock that out.
Mr Robinson: From a South Hams'
perspective, in terms of a huge potential for growth, as I said
before, it is not about increasing our summer peak numbers because
that will damage our environment; for us it is about spreading
the season and that is where we want growth.
Q539 Mr Hall: Could I take you back
to the finances because you have given us some details about how
much you spend on marketing, but what is the total spend on tourism?
We have had some very interesting figures. DCMS say it is 350
million spent on tourism, local authorities say they spend 126
million and some people say you would spend that money whether
it was a tourist industry or not. How much are you spending on
tourism? Is there a figure that you can give the Committee?
Mr Robinson: Me?
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