Memorandum submitted by Helpful Holidays
Ltd
DESCRIPTION OF
HELPFUL HOLIDAYS
LTD
Helpful Holidays is a commercial letting agency
with one office at Chagford in Devon. The firm employs 30 people
and manages a portfolio of about 550 privately owned houses, located
in Cornwall, Devon, Somerset and Dorset, which are let for holidays.
Customers principally come from the UK (90%). In 2006 the firm
made 15,665 bookings making it one of the leading regional tourism
businesses.
SUMMARY
Tourism in Britain could be on the cusp of something
big. There is a growing cultural shift in the British people's
attitudes in favour of "holidays at home" The Olympics
will bring the attention of the world to London in 2012. Internationally,
it seems that the view of Britain's historical and cultural contribution
to the world is becoming more positive. Interest in Britain is
strong in the emerging new economic powers. Its unique heritage,
culture and landscape make Britain one of the most desirable destinations
in the world. The tourism industry is poised to seize these opportunities
but the existing publicly funded tourism structures don't serve
the industry well. The current focus on marketing competes with
the private sector and neglects what should be the longer term
aspirations—to make our quality of service and quality of
public spaces absolutely outstanding—to make the idea of
visiting Britain synonymous with the idea of visiting somewhere
great—to build a first class reputation for the future.
SOME OPPORTUNITIES
The opportunities are huge.
— Domestically—there's
a positive cultural shift in the UK in attitudes towards "holidays
at home".
— Internationally—the
urban and rural assets of UK offer unique combination in a relatively
small geographical area.
— Internationally—the
US market is under-exploited by the regions. The increase in domestic
UK flights means they are now more accessible. There are only
a few "must see" sights/destinations outside London
and those that one might expect to be exploited are not (Mayflower
Steps, Plymouth for example).
— Internationally—the
history and heritage of UK remain underexploited assets (chocolate
box images are only part of the story). Britain as the foundation
of the modern world, mother of Parliaments and font of great democracies
(America, Canada, Australia, India), originator of the industrial
revolution. Probably the most civilised country in the world.
SOME THREATS
— Britain is expensive.
Quality needs to be very good to be perceived as "value for
money".
— To ensure quality, the industry
needs investment and competition and the free market to operate
efficiently. There is a threat the market will be distorted by
the activities of the public sector.
Declaration: Helpful Holidays submitted a State
Aid complaint to the European Commission (CP154/06) in July 2006.
The complaint concerns the activities of VisitBritain and the
"EnglandNet" project. Helpful Holidays claims that the
activities of VisitBritain, the Regional Tourist Boards and other
publicly funded organisations in respect of this project, particularly
in relation to the expenditure of public money on the development
of online booking and distribution facilities breaches Article
87 (1) of the EC Treaty. This Article prohibits any aid granted
by a Member State or through State resources in any form whatsoever
which distorts or threatens to distort competition by favouring
certain undertakings or the production of certain goods, insofar
as it affects trade between member states. The commission has
not yet decided whether to open a formal investigation.
THE PUBLIC
BODIES INVOLVED
IN TOURISM
VisitBritain (VB)
VB's role is to promote holidays to Britain
in overseas markets, to encourage the British to holiday in Britain
and to promote the provision and improvement of tourist amenities
and facilities in Britain. During recent years their activities
have strayed from that remit. Whether by design or mistake, they
and their RTB partners appear to have entered or plan to enter
the commercial arena of selling holidays through the EnglandNet
project.
EnglandNet
The development of the EnglandNet project has
brought VB into open conflict with a wide range of businesses
involved in tourism. It resulted in a state aid complaint being
submitted to the European Commission in July 2006, an update to
an earlier complaint submitted in November 2004. Both complaints
were supported by a range of businesses involved in the marketing
of accommodation but most significantly by 50 self-catering holiday
home agencies which manage the booking of about 19,000 holiday
homes. They see the scheme as directly competitive to their businesses.
The EnglandNet project creates a new route to
market for businesses which choose not to employ the services
of one of the large number of existing commercial marketing organisations.
The project links up the databases of regional tourist boards
with VisitBritain and allows the information from all to be displayed
through the VisitBritain suite of websites. Crucially, once accommodation
providers have paid their local Tourist Board (RTB) for a property
inspection and their details are added to the local RTB database,
availability enquiries, generated by the VB websites, can be answered
online and booking enquiries fed back to the regional tourist
board web sites where online bookings can be made. The RTBs and
VB both intend to earn a commission from the deal. The capital
to create this integrated automatic enquiry response and booking
system is all public money. Over £10 million has been spent
on the project by VB to date. Millions more are currently being
spent by the various RTBs both to build the computer systems to
link to EnglandNet and on a sales campaign to "animate"
local accommodation providers to pay their RTB inspection fee
and "get online". The scheme clearly replicates the
services of a large number of other businesses but most seriously,
self-catering holiday home agencies that inspect properties, market
them through there websites and brochures and take bookings on
them, for a fee. Most agencies have been distributing their products
through the web and offering online bookings since before the
EnglandNet project started. Competition and the demands of the
market have driven increased sophistication in agencies search,
availability and booking systems. The publicly funded EnglandNet
booking project clearly competes with agencies for both holidaymakers
and holiday home owner clients and for that reason Helpful Holidays
and the other complainants, including Hoseasons Holidays, have
asked the European Commission to look at the issue.
Helpful Holidays initial objections to both
VB and DCMS in 2004 yielded no satisfactory result. Our subsequent
submission of our first State Aid complaint in November 2004 was
followed by an agreement between Helpful Holidays and Tom Wright
(Chief Executive of VB) and subsequently endorsed by Richard Caborn
(then Minister for Sport and Tourism). The agreement was designed
to ensure that only accommodation from public sector "consolidators"
that came up to the quality control standards of the best commercial
agencies would be included on the VB websites. Specifically, the
agreement stated that consolidators (private and public) would
have to take full Trades Description Act responsibility for all
information (pictures, claims, statements, pricing) provided to
them by advertisers if those details were to be transferred on
to VB and offered for sale through their databases. Secondly,
the agreement stated that all availability information provided
to VB by consolidators would have to be guaranteed as 100% accurate.
Thirdly that VB would not act as an agent of sale.
It became apparent in 2006 that the scope of
the EnglandNet project had changed. RTBs had become tasked with
processing bookings and VB had completed or was attempting to
complete agreements with Regional Development Agencies (RDAs)
for them to underwrite the Trades Description liability. The requirement
for guaranteed 100% accurate availability information had been
dropped. As a result Helpful Holidays and Hoseasons updated their
complaint to the Commission in July 2006. They are expected to
make a decision in the near future about whether to launch an
investigation.
National Quality Assessment scheme (NQAS)
VB has adopted an "inspected only"
policy and has encouraged other public sector tourism bodies to
do the same. It has used the threat of exclusion from the marketing
opportunities offered by the EnglandNet project to persuade many
organisations to abandon historical accommodation inspection arrangements
in favour of the NQAS.
VB has excluded properties in the portfolios
of commercial self-catering agencies from its websites where those
agencies do not participate in its favoured (non-statutory) inspection
scheme. Regrettably, this includes many of the very highest quality
holiday homes available in Britain.
The rational for this policy is claimed to be
an attempt to "drive up quality". VB claim that the
industry is held back by consumers' confusion about quality and
their drive for a universal inspection system will help increase
consumer confidence and therefore booking levels in the sector.
Research conducted on VBs behalf as part of their Agency Accreditation
Scheme proposals in 2002 or 2003 indicated that rather than being
confused about quality the view of most consumers was that they
would trust the quality control systems of self-catering holiday
home agencies above a rating given under the national scheme.
Not surprisingly, much of the industry believes the main purpose
of NQAS is as a revenue stream. VB earned £2.7 million from
the scheme in 2005-06, 14.4% of their income from activities and
3.9% of their overall income.
IN GENERAL
VB has failed to focus on their core objectives
and have succumbed to the temptation of "mission creep".
They have obstructed and found themselves ignored by large sections
of the industry including some of the most progressive companies
in UK tourism. VB has focused on structures and relationships
with other publicly funded regional bodies which have failed to
help them fulfil their statutory role. They have failed to engage
the private sector to any appreciable extent.
South West Tourism (SWT)
We believe that the activities of SWT are not
highly valued by the majority of accommodation, attraction or
other businesses who serve the needs of visitors to the South
West. Only a minority of businesses are members. SWT has been
distracted from its core responsibility of supporting private
businesses and, as with VB, increasingly it finds itself competing
with some of them. It appears to be focused on implementing VB
and/or RDA policy above all else. It has made scant effort to
engaging a diverse and forthright private sector membership and
to reduce its dependence on the public purse by seeking funding
from that membership for their marketing campaigns. We are no
longer members of South West Tourism having been excluded for
not adopting VBs National Quality Assessment Scheme. Funnily enough,
in our final year, they gave one of our team the SWT Outstanding
Customer Service Award.
LOCAL AUTHORITIES
Marketing
Many public bodies have chosen to become involved
in tourism. Tourism is not a statutory responsibility of local
councils and, of those that choose to become involved, most choose
marketing as their primary activity. The reason why is clear.
It's easy to get into and seems to be an obvious way to provide
support for the industry. In reality, almost none does it well.
To do it well needs very careful, almost scientific monitoring
of marketing response to ensure that money isn't wasted. Regrettably,
in most cases, public sector marketing campaigns are poorly monitored
and the necessary data to ensure effective assessment and future
decision making is not or can't be collected. The effectiveness
of these campaigns, particularly at the regional and local level,
goes almost either wholly unmonitored, monitored anecdotally or
through guesswork. We estimate that over the last 10 years, the
combined spend of the public sector organisations involved in
promoting the South West has been between £50 and £100
million on marketing alone. We cannot say if they are value for
money. What we can say is the close analysis of our own participation
in public sector campaigns reveals that they infrequently generate
enquiries that result in sales.
Public environment
We believe that marketing is a poor way for
public money to be spent to support tourism. By its nature, tourism
relies particularly heavily on the public environment for its
success. Aiming funds at maximising the potential of the local
physical public environment (bins, loos, beaches, museums, roads,
footpaths etc) for the benefit of tourists has the benefit that
it is frequently good for permanent residents too. And for the
tourist industry (as, perhaps, any industry) the reputation of
a locality is the key to its ability to attract tourists and long
term prosperity. Improving that reputation is largely about meeting
and exceeding the expectations of whichever group of customers
for whom you cater and earning the resulting recommendations to
friends, family and colleagues. For tourism, the physical environment
is disproportionately important and as a result money spent on
its improvement will have a disproportionately positive effect
on the reputation and therefore success of the local tourist industry.
Training
Training is another area where investment is
likely to generate a disproportionate benefit. It is obvious that
well trained staff are vital to the success of tourist businesses.
Poorly trained staff or trained staff who execute their role poorly
adversely effect the reputation of not only their particular business
but of the region/county/country as a whole (depending on the
perception of the visitor). There is no point investing in marketing
aimed at bringing visitors to a region if the service levels experienced
by those who choose to come, do not enhance the region's reputation.
The encouragement of training, the explanation of its value to
constituents and the promotion to businesses of the value of those
who have undertaken training is therefore likely to generate a
significant return on a number of levels.
Business support
A disproportionate number of tourism businesses
are either small or micro and a large proportion are owner managed.
Many of them are extremely well run—others are not. Many
owners order their priorities differently, with the aim of maintaining
a particular quality of life rather than maximising profit and/or
capital return.
There are a large number of tourism businesses
that are run by people with relatively little business experience.
Many businesses are small and their owners want them to stay that
way. Others would like to grow big. Time pressures are frequently
very acute when running a small business and spare cash for the
employment of professional help is frequently in short supply.
Public expenditure on finding those that want
to grow and supporting them by guiding them towards sources of
expert advice which will help them develop a higher degree of
professionalism in the delivery of the services they offer is
likely to have a very positive impact on the reputation of the
region and hence its overall success.
IN GENERAL—PUBLIC
SPENDING
We believe that the desirable outcomes of a
concentration of affordable public investment on:
would be:
(i) Improved reputation and therefore an increase
in the volume or value of holidaymakers.
(ii) A decrease in seasonality as a result of
increased business.
(iii) More job security as a result of a decrease
in seasonality.
(iv) Better paid jobs as a result of greater
job security.
Reputation is the cornerstone of a successful
tourist industry and public money would be best spent building
that from the bottom up.
TAX
We recognise that there is a valid argument
for an affordable, locally raised and spent tax on accommodation
businesses. We believe it would be a justifiable way of funding
public sector spending on physical improvements which benefited
tourists and the community. We do not believe an accommodation
tax could be justified for any other reason.
ENVIRONMENTAL OPPORTUNITIES
Volumes
Although it is clearly not true of everywhere,
parts of our region appear to be at or close to carrying capacity
of the public realm at peak times of year.
Increasing the carrying capacity would require
expansion of the transport network with the risk of damage to
the principle asset that brings visitors to our part of the country—the
landscape.
The public bodies appear to have recognised
this threat.
Where visitor volume is judged to have reached
carrying capacity, current policy appears to be aimed at encouraging
an increase in the value of holidaymakers to businesses rather
than an increase volume.
This is a sensible and environmentally sustainable
policy.
Wind turbines
To date, the appearance of wind turbines in
the rural environment does not appear to have had any impact on
visitors desire to visit our region.
Heating and lighting
Heating and lighting demands are correspondingly
higher in holiday accommodation in comparison to domestic accommodation
because visitors tend to leave the heating and lights on.
Incentives for accommodation businesses to invest
in more efficient heating systems and lighting would help reduce
the environmental impact of these businesses.
Waste management
The letting of holiday homes is a major part
of the accommodation offering in the South West. The management
of rubbish disposal from these homes can be a major headache.
Lets are usually weekly, running from Saturday or Friday. Even
where owners pay business rates and pay local authorities additionally
for refuse collections, arrangements can only rarely be made for
this to happen on a Saturday or Friday. In areas with high densities
of holiday homes a private sector operator sometimes steps in
but in more rural locations a private collection is uneconomic
The result is a waste management problem. We think the introduction
of the giant "poubelles", so beloved on the continent,
might be the answer. Although we accept it might be difficult
to restrict their use to holidaymakers, we suspect that recycling
rates are also poor in the non-serviced accommodation sector and
that by providing these facilities separation of rubbish and recycling
rates will improve.
Footpaths
Visitors to rural England are predominantly
people who like the countryside or the seaside (or both). Those
who like the countryside are lucky enough to have the most tremendous
national asset at their disposal in the network of public footpaths.
This is a largely underexploited asset. Access to the countryside
through RTR legislation has opened up tracts of land which are
accessible to experienced "walkers" but there remains
a disinclination of much of the population to explore their countryside.
We believe the number of people using footpaths would increase
if they were:
(i) Better signed—with maps
indicating where they lead, where one might next encounter a public
road, places of interest in the locality that could be visited
and in indication was given about the difficulty of inclines up
and down (blue, red, black runs?)
(ii) Better maintained—with,
where possible, hard or hardish surfaces down which a buggy or
wheelchair might safely go.
Public transport
Busses are poorly used by visitors to rural
areas. We believe that's because they rarely know where they go.
Maps showing where the bus goes, as well as a timetable, at bus
stops would help.
Planning
As already mentioned, the landscape is the principle
asset rural England exploits in attracting visitors. For rural
tourism to continue to prosper that landscape needs to be preserved.
But the demands of visitors should also be considered carefully.
At the moment planning decisions, in many cases, appear to give
too much weight to loss of amenity and landscape when considering
application. Very high quality developments in stunning locations
are very popular and generate good jobs. Although initially they
may stick our like a sore thumb, if they are done very well and
with sympathy, with time they mellow and become part of the landscape.
The apartment complex that we let at Bigbury-on-Sea is an example
of how successful this sort of development can be.
Employment
Some businesses involved in tourism already
operate at or close to capacity all year round but for many their
business is very seasonal. To achieve year round employment we
have to find year round reasons for holidaymakers to visit. Outside
the major cities this means replacing the draws of the countryside
and beaches with other attractions when the weather gets worse.
The West Country has been remarkably successful over the last
few years in developing a reputation as a place to visit for great
food and surfing is becoming big in Cornwall. These developments
are helping to extend "the season". Surfing has, we
believe, the potential to become hugely popular but for it to
do so imaginative decisions will need to be taken by planners
to allow the development of the infrastructure necessary to support
it.
Olympics 2012
Of course London will be the focus. There may
be calls for efforts to be made to encourage visitors to spread
their stay and visit the regions as well as the South East. Some
will, but we don't believe that marketing campaigns will be the
best way to achieve a long term return on expenditure. We believe
that resources should be targeted primarily at ensuring that the
services visitors to the games in London receive whilst here are
memorable for their high quality rather than the converse and
that the public spaces through which they move are absolutely
world class. This applies to the total experience from when they
land to when they leave. Intensive efforts should be made to ensure
that our public spaces and buildings look their best. Everyone
has to understand that we're going to be on show and we'd better
look good. It should be our aim to significantly raise Britain's
reputation as a holiday destination. If we get it right that will
be capital for decades to come. If not, a lot of people will go
away to tell their friends that Britain might not be top of their
list of recommendations and that would be a shame.
March 2007
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