UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 133-v

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

CULTURE, MEDIA AND SPORT COMMITTEE

 

 

TOURISM

 

 

Tuesday 5 February 2008

MR CHRISTOPHER RODRIGUES CBE, MR TOM WRIGHT CBE, MR BERNARD DONOGHUE and MR HUGH TAYLOR

Evidence heard in Public Questions 394 - 437

 

 

USE OF THE TRANSCRIPT

1.	This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
2.	Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.
3.	Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.
4.	Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

 

Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 5 February 2008

Members present

Mr John Whittingdale, in the Chair

Janet Anderson

Philip Davies

Mr Nigel Evans

Paul Farrelly

Rosemary McKenna

Adam Price

Mr Adrian Sanders

Helen Southworth

________________

Joint memorandum submitted by VisitBritain and England Marketing Advisory Board

 

Examination of Witnesses

 

Witnesses: Mr Christopher Rodrigues CBE, Chairman, Mr Tom Wright, CBE, Chief Executive, and Mr Bernard Donoghue, Head of Public and Government Affairs, VisitBritain, and Mr Hugh Taylor, Chairman, VisitEngland, gave evidence.

Chairman: Good morning. This is a further session of the Committee's inquiry into tourism. We were, as you know, due to have the Minister of State, Margaret Hodge, but we understand she has hurt her back, so she is unable to be with us, but we are very pleased to welcome from VisitBritain, Christopher Rodrigues, the Chairman, Tom Wright, the Chief Executive and Mr Bernard Donoghue, the Head of Public Affairs and Mr Hugh Taylor, the Chairman of VisitEngland. Rosemary McKenna will begin.

Q394 Rosemary McKenna: Good morning, gentlemen. You have stated that the tourism industry faces some enormous challenges. As the national tourism agency, can you set out your assessment of the prospects for the industry?

Mr Rodrigues: I will happily start and then I will invite Tom to expand. This is an extraordinary competitive global industry, global because everyone in a foreign country has a choice. If you are sitting in Singapore the choice is turn left to Australia or turn right to London. That competition is growing hugely as new markets and new destinations are brought on, on an almost daily basis, and in many of those countries which are new to tourism in fact the infrastructure and the built environment are newer, so there is some very good high quality competition for international tourists looking at Britain. There is also competition for Britons considering whether to travel in Britain or travel overseas, and I do not think anyone sees the level of competition in this industry decreasing. The Internet has become a major factor, and it is one that has, if you will, levelled the playing field; information is easily accessible to all from all locations. In that environment Britain has some wonderful assets, but those assets alone, in our view, are not enough. There is a need to raise the quality of what we do (that is internal work); there is a need to improve the welcome; there is a need to think long-term about infrastructure. On that point I will give an example. It is widely judged that international tourism will grow by 50% in the next ten years. If we maintain our share, put simply, that would mean 50% more arrivals on a Monday morning at Heathrow ten years from now. I think I make my point about infrastructure; it is a long-term planning game and it goes across all of government. So, in a competitive market with long-term issues to consider, we think we are in a good position: we have the natural assets of Britain, there is a good aspiration to come to Britain, but we are not in a long-term secure position. We need to continue to market in the established markets; we need to market in the developing markets to build aspiration. It concerns me that we have dropped a sixth overall in terms of destinations people want to go to. It concerns me even more that in a recent study in China we were ninth. It is not a good prospect when your share of future growth markets is lower than your share of existing markets. So, against that, we are clear that it is highly desirable to continue to invest in this business. It is a fragmented business. There are nearly 2,000 SMEs in this business. In all honesty, it is difficult to assume that an SME will market Britain in China or even market their own efforts in China, but it is not unreasonable to think that the British tourism industry should be marketed in China. So, we believe that there is a case for greater investment, we believe it needs to be focused, we believe that we can work more closely with our strategic partners, although we have made good progress, I believe, in recent years and, ultimately, we believe that tourism, as Britain's fifth largest industry, needs to be recognised (a) for what it is as a business, (b) for its importance to the economy overall and (c) to the multiplier effect that it has on the economy. On those areas there is still work to do. Tom, is there something you would like add at this stage?

Mr Wright: Yes, I just add briefly that tourism is one of the largest growing industries globally - at least 4% growth every year around the world, 50% compound, as Christopher pointed out, over the next decade - and when you think of the billions of Chinese, Indians, Brazilians and Russians who have yet to travel, there is enormous potential for Britain. Our concern is that the long-term erosion of Britain's global share will continue. Back in 1980 we had a 6.5% share of global tourism; that has declined more recently to about 3.8%; and although we have seen some good recent growth in the last couple of years, we have only just been recovering from foot and mouth and September 11. If you look globally, tourism is a very high priority for governments around the world and there is an increasing investment going on into supporting their tourism industry and infrastructure, on average 10% growth going into the budgets of national tourist authorities around the world, and of course in our case the investment has been static or in decline and, particularly with 2012 coming up, we really want to focus on delivering a long-term legacy and make sure that Britain shares in that global growth prospect.

Q395 Rosemary McKenna: You said the three issues were quality, welcome and infrastructure. Do you think we are ready to have that welcome particularly in place for 2012?

Mr Rodrigues: Tom is Chairing the Welcome Committee. I turn to him.

Mr Wright: We have been working on the welcome to Britain for some years and I Chair the Welcome to Britain Task Force that brings together a whole range of public and private agencies that have an interest in the information we provide, the way we process and manage overseas visitors, the welcome and hospitality that we give them in this country, and we are very much gearing up (and this is a key part of our 2012 strategy) to improve that welcome. The perception of the welcome around the world in this country is about fourteenth, fifteenth or sixteenth in the global league, which is way lower than our position in global tourism, i.e. we are perceived to give a relatively weaker welcome than most of our competitor nations. There are four things that we believe we have to improve on. One is the procedures, whether it is the visa and the whole approach to how we manage overseas visitors, the second is improving the perception of Britain, because in many countries there is still sometimes a rather old-fashioned, quaint perception of Britain that does not reflect the incredibly modern and dynamic nation that we actually live in. Thirdly, information provision, and, fourthly, for the customer service, the skills of all of those who interact or interface with visitors in this country, and the task force is working on a strategy for all of those four different areas and we really want to gear this up so that by 2012, just as Germany and other nations have when they hosted the World Cup or Australia when they hosted the 2000 Olympics, we have a world-class welcome.

Q396 Rosemary McKenna: I agree with you that we really have to work on that, and I do travel a lot, but do you think that Terminal 5 at Heathrow, if there is the attendant improvement in the immigration process, will help in improving the welcome? That is only one aspect.

Mr Wright: Yes.

Q397 Rosemary McKenna: It is possibly the most important.

Mr Wright: I think it will, because, clearly, we all know that Heathrow now is at maximum or beyond maximum capacity and you can see the impact of that for overseas visitors to this country. It is not just Terminal 5, it is the whole development of Heathrow between now and 2012 and Heathrow East, but there is light at the end of the tunnel. St Pancreas is another great example of a huge improvement of a great welcome to overseas visitors and, yes, we do need to improve our infrastructure, but one thing I would add is that we have agreed with the Civil Aviation Authority and with the Passenger Shipping Association to constantly monitor at ports of entry on departure to track the quality of the welcome we give. So, from this year onwards, from the first quarter onwards, we will be able to give a regular update on how the actual welcome is and how we are improving that welcome.

Q398 Rosemary McKenna: One more question. Tourism is a very important part of the economy, as you said. Are you close to meet the target of being a £100 billion industry by 2010?

Mr Wright: We believe that, if we take the opportunities particularly around the Olympic and Paralympic Games, we can achieve that growth figure of 100 billion. Currently we are at about 85 billion. That was our best estimate in 2005. Clearly, the growth potential should allow us to achieve 100 billion, but, like everything, you need to invest to achieve that, and we have this golden opportunity, this one-off opportunity of 2012, for really what is a ten-year legacy, four years before and probably four to six years afterwards, and there is so much we can do around that to grow the visitor economy in a global sense.

Q399 Helen Southworth: I wanted to ask you about the excitement of tourism. Inevitably, we end up focusing a lot on process, but the UK has had a good position in tourism historically and the emerging markets are making quite clear that we are sliding down in terms of how people see us, how they want to spend their dreams. What work have you done on what the draw is, what the attraction, what the excitement is of the UK and how we can best communicate it with the emerging markets? What brings people here?

Mr Wright: We have done an enormous amount of work. I think perhaps traditionally some people would think more of our heritage and our history as one of the key attractors, and actually that is a key motivator but it is also the culture and the contemporary culture. Therefore, the simple answer to your question is from all our research it is almost the contrast of the modern culture and the traditional aspects of this nation that are hugely appealing, particularly in our developing markets. All the history and heritage are of massive appeal, but you then have to contrast that with the modern culture, and whether it is music, sport, the contemporary culture, for younger audiences around the world who perhaps have less traditional associations, whether it is through literature or film and other areas, its modern appeal is also important, and that is why we do a lot of work in the film industry, with the music industry, with the sport industries showing the contemporary as well as the traditional sides of our culture.

Q400 Helen Southworth: How different are the sections in the different emerging markets?

Mr Wright: They are quite different. If we take India, for example, which is one of our fastest growing international markets (it overtook Japan just recently, which was almost unimaginable a decade ago - more visitors from India than Japan to this country), you get a real mix of interests from Indian visitors and those interests would vary from some of the traditional aspects but also a huge interest in film-related, and we do a lot work in Mumbai with the Bollywood film industry and Bollywood films have a lot of locations that are utilised here in this country. Cuisine is increasingly important, and for some markets shopping, for example, is very high on their agenda. One of the real competences of our overseas network is the enormous insights, which are very different, and we have a huge book that has all the insights for the industry and partners to work with for each of those markets and in certain markets we might have very different hooks. In Germany, for example, they watch on Sunday nights dramatisations of Rosamund Pilcher filmed in the West Country of England using German film crews. I was talking to the Blue Badge Guides recently. We now have specialist Rosamund Pilcher guides in the West Country to help all the German visitors who are coming to Devon or Cornwall. If you go to Japan you might find more traditional associations with Beatrix Potter, and so on. Without taking up too much of your time, it is enormously diverse and that insight is one of the key things we bring to Britain's visitor economy, this global understanding of what inspires people to come to this country.

Mr Taylor: On the England, domestic side, we have run two most successful campaigns, one called England Rocks, which was launched at Abbey Road and was all about rock culture and they went to see where the Beatles were, and so on, and of course in the Year of Culture for Liverpool that is so important, and the other one is Story Book England, which is showing them the locations where some of our great publications and novels were based. These were globally picked up by the press all over the world; so they are very much a statement about what we are and they do very well.

Mr Rodrigues: Can I pick up a related comment? You started, very encouragingly, with the word passion, which is something that goes through our industry. Most people are passionate about what they do. It is one of the features of this industry, in service industries in general, but in this industry in particular, and it is really important, when you think about what Tom and Hugh said, to recognise that this is not an industry which can rely solely on the Internet. There has been some talk that one of the efficiencies that could be gained in this industry is to shut the overseas offices and let everyone go on the Internet. That only feels right if you look at the wrong end of the telescope. If you are sitting in a marvellous destination, you have put everything on the Internet, you say, "Well, why do you not come and find me?" and the answer is because, when you think of it from the consumer's perspective, the consumer may not know about that wonderful destination, and something has to grab their passion, and passion is a very personal thing. The Internet is great at delivering information, it is great at making bookings, but it is not so good at delivering passion randomly. The thought of looking at the Internet, if I turn it on its head, looking at it from the British going overseas, how would you find Santiago de Compostela if you did not know about it? We are very close to it in this country, but we have to think about it from the other side. I have been in this job for a year; I have come in from being in international tourism and financial services businesses all of my career. The extraordinary asset, in my eyes, of this organisation is the people overseas. We have got some great people at home, but the thing that is absolutely unique is the people overseas. It is interesting that in the Scottish submission to us (the Strawman's submission) about what they want in a future VisitBritain the number one thing on the list is the overseas offices with the insights, the contacts and the ability to execute, and it is different. Knowing how to pitch attractions in different markets requires local skills. I will give you, if I may, one example because it just brought it to light for me. In the spring last year when I had just taken on the post and I was going round learning what was going on in the field, I went to Milan and our people there organised a very good lunch session with a number of local journalists, and one of them had just got a major article placed in a Milanese magazine, the main style magazine, and it was about Liverpool Capital of Culture, and it was about architecture, and it was a photographic essay on the beauties of Victorian Liverpool. Now that works in northern Italy because northern Italians are interested in that kind of article. That might not work in Spain, it might not work in France, but our team knew the market, knew the contacts, pitched the story and got the coverage. It cannot do that on the Net.

Q401 Mr Sanders: That leads nicely to what I want to talk about. You say you cannot rely on the Net.

Mr Rodrigues: Alone.

Q402 Mr Sanders: Yet EnglandNet, which you are responsible for, on the latest figures, shows that it costs approximately £160 per booking. That does not represent very good value for money in terms of this experiment. That seems to have been extremely costly.

Mr Taylor: Perhaps I can answer on EnglandNet. EnglandNet is not a booking engine. It does not take any bookings at all actually. It is also not a website. EnglandNet has three elements: it holds the national tourism database which has 41,000 accommodation providers, 12,000 attractions and 2000 online. It is interoperable. The success, as far as my Board is concerned, of EnglandNet is the extent to which we are able to have this content, have it up-to-date, have it as a one-stop-shop, if you like, for everybody who uses it to see and benefit from, and where there is an element of booking, that is in the polling service, which is a very small part of it and a very small budget related to it as well, and the polling service essentially refers bookings, so it allows us through the search engine to identify those products, of which there are about 9,000 accommodation products, as it stands, that might be of interest. If they are interested, we refer them to the provider. So, there are no bookings on EnglandNet at all, and one of the strategic decisions we made very early on was that we did not want to go into the booking game.

Q403 Mr Sanders: No, but the process leads to bookings and the number of bookings that have been through the process work out at £160. If it were a booking system, then you would have some income to justify its existence.

Mr Wright: Just to clarify the facts, per month the direct referrals to the value of that business that we are passing on is about half a million pounds, but so many people use it as a research tool (that is its main role), they check out availability, what accommodation is around, and then they will contact, in many cases, the accommodation direct because perhaps they want to check whether they can bring their dogs or whatever may be the particular nuances, and an estimate of the indirect value is over £6.5 million a month, so that makes the figure per referral look far lower than the one you were quoting.

Q404 Mr Sanders: But is it not the case that if it did not exist it would not actually make any difference at all? How would it make a difference if it was not there, given how every local authority seems to be investing in its own accommodation bureaus and its own websites? Every business is encouraged to use the Internet. You are not needed. Why are you bothering? What value-added are you bringing?

Mr Taylor: The answer to your question is that it links everybody up in a way that allows a small/medium enterprise in the middle of Dorset national and often international exposure in a way that they would never have if they remained regional. That is the benefit of EnglandNet.

Mr Wright: Can I give a very specific example. EnglandNet does not just drive our websites, it drives a lot of the other key websites around the world, so EnglandNet is behind a lot of the content on Yell, for example, Google and Tom Tom. A small example: if you are driving around with your Tom Tom satellite navigation system, which I am sure you see most people doing nowadays, on their maps it is bringing up on the Tom Tom screens the quality accredited accommodation and attractions. All that content on EnglandNet is being brought onto satellite navigation systems so that when people drive through this country it tells them there is a great attraction off to the left here or there is a bed and breakfast off to the right here or there is an hotel.

Q405 Mr Sanders: Do we not have signposts at the side of the road that do that?

Mr Wright: No, is the answer.

Q406 Mr Sanders: You now have to look at your Tom Tom to find out whether you are close to an attraction.

Mr Wright: If you are on holiday in Devon and, let us say, you have rented a cottage and you think, "What would I like to do today with the family on holiday?", the Tom Tom will tell them, within a 10-mile circumference, the great attractions that they can go and visit. The way I think about EnglandNet, and why I think this referral issue is such small part of it, is it is the national database. It connects up thousands of websites and museums and attractions and accommodation, it brings it altogether and then redistributes that content all over the world, not just through our websites, and we have over 20 million visitors to our websites, but all these other websites that we provide information for, and it is a shame that this relatively small issue---. I obviously appreciate the concerns that have been expressed about it, but, of course, the project goes back some time now and we want it to continue to modify and reflect the changing environment that we operate as we go forward. As a national product database it is a great success.

Mr Taylor: One of the things that we also look at is the quality of the content. We are much more interested in knowing how many of them have photographs, how many of them are up-to-date, how many of them have got the information the customer is looking for, how it is presented and how accessible it is. It is that that we judge as the success of the database and the investment behind it.

Q407 Mr Sanders: Would you say to any local authority they should not be wasting any money on this sort of thing, they should just leave it up to you?

Mr Taylor: It is done at local and regional level and we put everybody together, so it is not a centrally delivered content provider.

Q408 Mr Sanders: Businesses should not bother either; they should just leave it up to you?

Mr Taylor: No, again, the businesses locally work with their local and regional tourist bodies who have their own systems, and it is done at that level. The EnglandNet element of it makes it interoperable and brings everybody together under one system to give them the distribution nationally and internationally they would not otherwise have.

Mr Rodrigues: If I might use an example to try and bring this to life. As the Committee may be aware, I spent a number of my years in the payment instruments industry. The analogy is this. If your local bank only had your data, your ability to travel and use a payment instrument would be non-existent. You would not be able to present a local English bank card, or Scottish bank card in Kazakhstan, buy things and walk away. The reason you can do that is that the banks have decided around the world that they will have an interoperable platform. They own the data, they put the data on to the system, the data is then accessible to anyone in any shape or form, and I think it is that interoperability, that platform, which does not replace the need for individual destinations, attractions to have their own story, but it is the worry harness that allows the consumer to get to that data in an organised fashion whether they Google it or whether they come on to the VB site. This is not proprietary to VB, it is core information available to the world, and that is where the platform importance is. I understand entirely if you take the numerator of bookings and the denominator of cost you get that sum, but that is not actually the primary metric that we believe is appropriate for judging the effectiveness of this platform.

Q409 Mr Sanders: The industry has undergone a significant structural change in the last five years. Are you now satisfied with how it is set up? For example, how does VisitEngland differ from the England Marketing Advisory Board?

Mr Taylor: As Chairman of VisitEngland, I should answer that because I was Chairman of EMAB before that. EMAB was created in recognition of the legal obligation to have a tourist board for England and also the marketing remit that the ETC, prior to EMAB's creation, did not have. It was a very important decision for us to be given the remit to market, and EMAB's responsibility of overseeing the strategy was a very important one as a result. As we got into the role and the Board developed, it became clear that there were opportunities to do a number of things, not just on the marketing front, which I would claim to be very proud of and suggest that it did and continues to do some excellent work, but also in terms of the engagement with the other tourism bodies across the country, which, as you say, is not perfect but is certainly there to be engaged with: the regional development agencies, the local destination management bodies, the local authorities and so on and so forth. Consequently, we created Partners for England, which was a joint operation between ourselves and SWRDA (South West Regional Development Agency) and VisitBritain to try and engage all the disparate parts of English tourism and start talking about things that allow us to have synergy. That has developed very well over the past three years and we are actually meeting next week with the first formal summit as we put together that organisation. As a result, one of the things that came out of Partners for England was the recognition that we needed the Board to be a true stakeholder body for those various parts of the industry, and to that end we reconstituted the Board with a number of different stakeholders, which included the BHA and VisitLondon, and so on, which were not on the Board before, and through the delegated responsibility that VisitBritain now gives VisitEngland's Board to run the English element of VisitBritain, we have now, in effect, the control that we need (the benefits of staying within VisitBritain and the utilisation of the Executive and the resource that that organisation offers us) and, at the same time, the engagement opportunities through Partners for England to make sure that everybody is working in one direction. So EMAB to VE was a very important progression and gives us the benefits of both the VisitBritain organisation and the local structures too.

Mr Wright: May I add that we have made enormous progress with England as well. The Committee will remember, it was established in 2003 that we would be marketing England domestically, and, of course, it was not marketed prior to that, certainly in the few years before that, and since then the development of the England marketing capabilities, whether it is enjoying the website, which now has eight million visitors a year, or the great PR and the campaigns that have been undertaken, and just to reflect that, in 2007 the world travel industry voted VisitEngland the best European tourism and information site in the world, effectively, and the British travel trade voted us the best European tourist board for England in November 2006; so a lot of accolades and a lot of great results for the England side of the organisation led by the new VisitEngland Board.

Q410 Philip Davies: It is now just over three months since the announcement of your cut in funding was made. Having had that time to reflect, what is your view now about that settlement?

Mr Rodrigues: I will take this first and Tom may wish to add. I expressed strong disappointment at the time. My disappointment has not abated. We knew that funds were tight. We believe that there were four areas in which we should ideally have received funding. One is that the funding for England and VisitBritain should at least have kept pace with inflation. The things we spend our money on are not inflation-free, and though Tom and his team have done a tremendous job in driving efficiencies out of VisitBritain in recent years, and technology has helped, the fact of the matter is that media costs go up when you are marketing overseas, the cost of having people overseas goes up, although we have hardly any expatriates any more, we are all local, so we have driven those costs out. So, a cut in real is a real cut and will be painful, and you may wish to pursue what we think the impact of that will be. We were sorry that we did not have additional funds, albeit of a one-off nature, for VisitEngland. Hugh and his Board are doing tremendous work, but they are pulling together what inevitably, post devolution, post the RDAs, is a fragmented approach to tourism. There are two ways you get people to work together. One is goodwill and the other is goodwill assisted by money. The second is more effective than the first, and in this industry it is absolutely core to what you do. So, I recommended, but sadly it was not accepted, that there was a one-off grant to really focus the progress made by Partners to England by giving them opportunities to market together and a reason why the RDAs and their agencies should contribute to the common cause. The fourth area that we had asked for support on was the marketing of Britain during the Olympics. Tom has touched on this. This is not about televising the East End of London; much of that will be done. This is about using the opportunity of over four billion people watching an event in Britain to merchandise Britain to them, to build appeal, and that will need some co-operative funding. I suppose I have some hope that this country will do what others have done, which is around two to two and a half years before their Olympics or their World Cup people have realised that a grant of specific funding may be extremely helpful to get some of those co-operative activities going. We did not want permanent funding, we requested 20 million as a one-off. I do hope that there will still be time to secure funds of that type for specific partnership opportunities in the public/private sector. Otherwise I fear the only gold medal we will get in tourism is a gold medal for myopia.

Q411 Philip Davies: Is it not a good time to cut funding for VisitBritain when the Olympics is on? I used to work in marketing and one of my bugbears was that when a company was doing well it used to spend more money on marketing when, in my opinion, it did not need to because it was doing well. The time it needed to spend more money on marketing was when it was struggling for customers, and that is the time when it used to cut back on its marketing spend. Given that the country is going to be in the vanguard - everyone in the world is going to be seeing Britain and all it has to offer - surely that is a time when you do not need to spend so much money on marketing, perhaps you need the money to spend on marketing when Britain is not in the limelight of the world.

Mr Rodrigues: Two thoughts on that. As a general marketing point, I am always minded, again from my prior experience, that Diners Club was founded before American Express. American Express is the dominant brand in that sector, Diners is almost non-existent now, and that is because there has been a continuous investment in that brand. With respect, I do think that when you have a good brand you may get greater cost efficiency and you may not need to increase your spend pro rata, but when you are opening up new markets in particular, which is in many cases what we are doing as you try and harness the great Asian and Indian sub-continent tourism flows of the next ten to 15 years, then to do it with less money is difficult. The other thing is that the guts of the television of the Olympics will be around the sport itself. The unique opportunity is to take people out and about, to make that 30 plus days of programming not only be programming in the Olympic venues but programming out and about, and if you can get the Japanese to see Alnwick Gardens, you can play exactly to the kind of interest the Japanese have in gardening. Different interests, different countries, tailored in the grand scheme of the money being spent on the Olympics, asking for a small pourboire to help us merchandise Britain we do not think is too much to ask, and I think we have to recognise that it is difficult to explain to a bed and breakfast in Barnstaple why they should be marketing in China. It is the fragmented nature of the business. The big companies will do their marketing, but to market Britain, to open the door, to build the aspiration, we think there is some value to piggybacking on the natural interest that the Olympics will create.

Mr Donoghue: Can I add to that as well? Your point is an entirely fair one and one that we looked at at the outset of the research that we commissioned. We commissioned research into all of the Olympic venues over the course of the last 20 years and also those cities that have hosted the Common Wealth Games as well, and we wanted to find out where the real tourism revenue came from. Was it in the year, was it before the year, or was it in the years afterwards, and we found that there are very, very few host cities that have really exploited the full tourism potential of hosting a games. Barcelona is the greatest example, Athens much less so, Sydney only to a certain degree, and one of the things that has come across really clearly from the research that we have undertaken is that, unless you invest to market and exploit the opportunity, you do not realise the opportunity. The real tourism revenues come from the hosting of a successful games, Common Wealth, Olympic, or whatever, in the five to ten years afterwards, because the city destination has been presented afresh to the world's population and, unless you invest to get that, you do not get it, because you have to win those visitors, you do not just assume that they are going to come.

Q412 Philip Davies: I am going to ask you something I asked somebody on a previous inquiry. When you mention Barcelona, is not the difference that Barcelona may not have been an obvious tourism destination for people until the Olympics was on and people watching the Olympics thought, "Oh, Barcelona, I have never thought about going to Barcelona before. I will give that a bash?" Is it not a bit more difficult to sustain the argument that people around the world who are contemplating a foreign trip are looking at the TV thinking, "London. I have never thought about going to London before"? Is London not at the top of most people's potential destinations venues anyway, whether the Olympics is on or not?

Mr Wright: No, is the answer. The answer is more complicated than that, because where the awareness of interest in the London Paralympic and Olympic Games is tracking most strongly is the emerging markets around the would. So in China, India, Brazil, those sorts of markets, there is even greater interest in 2012. It is in those markets, particularly China, where Britain has a very small share. France, Germany receive four, five, six seven times as many visitors from China as Britain does; so in those developing markets (and there is a projection for over 100 million travelling Chinese over the next decade) the 2012 Games is critical. We also have a certain image in China. They watch a lot of traditional literary films and productions there where the perception of London is still sometimes slightly more related to Sherlock Holmes than perhaps some of the more contemporary aspects of it. We have this absolutely unique opportunity to present London and Britain as a dynamic, modern, contemporary country that is shaping global trends, global affairs, and we cannot take that for granted, and we do not have, necessarily, in markets like China the traditional knowledge and links with Britain that you might have with old Common Wealth countries, so this is a key opportunity for us. On top of our priority list is these developing markets around the world that will define future travel globally.

Q413 Philip Davies: The former Secretary of State, when he came before the Committee, said that the reason why your budget was being cut was because there are efficiencies which can be achieved. You have said that you have already achieved efficiencies. Are you saying that there are no more efficiencies to be made, or did the former Secretary of State give any indication to you where he thought those further efficiencies could be made?

Mr Wright: Perhaps I will just quickly outline the efficiencies we have already made in the last few years. We have reduced our headcount from 529 to about 417 people this year, and within our headcount there has been a real switch. We have gone from nine people working in the Internet online environment to over 61, we have gone from two people working on commercial businesses to over 35; so our headcount has reduced significantly almost by a quarter while we have re-skilled to work in that new environment. Secondly, our infrastructure costs, our support costs, have gone down from £12.3 million to £9.9 million and our non-government revenue (so the money we generate ourselves through partnerships and commercial activities) has gone up from £15 million to over £24 million this year, so we have got a very good track record in developing the efficiencies and competences of the organisation. Of course, we will continue to (and we have to because our funding has been reduced) find further ways of reducing our costs. Just last year, for example, we saved another 2.6 million to facilitate the reductions in this next year by shutting down our Dublin office, completely reducing our footprint in parts of Europe and South Africa and that is saving us a million pounds. We have taken away most of our expatriate staff around the world; we only have three expatriate British staff working overseas. So, the simple answer to your question is we have made a lot more efficiencies. We are clearly going to have to find further cost savings, although part of it will be offset by the extra commercial revenues we are generating through non-government funding, but clearly what we are concerned about is that we cut our core competence to a core. To give you a small example, so much of our work is invisible to many people. If you take Liverpool Capital of Culture, since 1 January last year we have taken 147 international journalists and TV crews to Liverpool. For the opening weekend, a couple of weekends ago, which I was up for the concert and the opening evening, we had 25 overseas journalists and film crews. If you had been in France, for example, you would have seen fantastic coverage of that opening weekend across the national French television. Be it Swiss, we had German crews there, we have had crews from Shanghai, we have had film crews from all over the world. That is just a tiny example of the sort of work we do that is invisible to most of us for just one event. Overseas visitors to Liverpool have doubled, even tripled in recent years, as we have galvanised the world's interest in Liverpool around Capital of Culture. That is the short of work that our infrastructure is set up to facilitate, and in our strategic review we are going to have to really consider how we balance the needs for our overseas capabilities and the reductions in our core grant-in-aid.

Q414 Philip Davies: The new Secretary of State, of course, was the Chief Secretary to the Treasury, so, presumably, he agrees with your reduction in funding. Have you had any opportunity to meet with him or discover whether or not he has had a change of heart since he has moved into his new post?

Mr Rodrigues: I have already spoken to him. He is committed to the review that we are undertaking and, I think, desirably at this stage, is bearing an open mind as to what the outcomes might be, but, just to pick up on a point that Tom has made, I did make the point to his predecessor when we had our CSR that there was a need for a review because you were getting very close, in my experience, to the point where you were cutting into the bone, and I am curious to know which part of the anatomy of the one person we have in Malaysia we will cut and whether we will be able to get a reduced pay award for only a part person! Practically speaking, it is easy to get sunk down into the micro-numbers. We have got one person in Malaysia. It is going to deliver more tourists in the next four to five years than China, until we have changed some of the visa situations. China is absolutely important in the medium-term, do not get me wrong, but when you are arguing about bits of one person, we are sort of missing the point. I think we have some tough and demanding choices to make about places that we do do activities and places that we do not do activities. I have told you how much I believe the overseas operations are important, and I think our consultation process will reinforce it, as the Scots have already done, as the Welsh have already done and has London has already done. I do not think there is going to be a change on that. Much of the work that Tom and his team do to harness these marketing opportunities - and it is worth remembering the big number here. The big number is that last year we had somewhere in excess of £1.3 billion of measured media coverage. If we had had to pay for that press coverage and TV coverage, it was of that order of magnitude. You know, that number can be wrong by 10%, but you are getting that with a grant that is relatively small. There is very, very real leverage. So, we will have to make some tough decisions unless we get a revised view either about the third year of this CSR, which might be coupled, I am still hopeful, with some attention to the Olympics, but I actually think there is a bigger game here. If you look at the history of 12 years of reducing grants, we clearly have not won the heart and mind of the Treasury that this industry, the fifth biggest British industry, the third British export owner, a very fragmented industry operating in a highly competitive market place, justifies some support. I actually think, on that single number of overseas marketing value created, the Treasury is getting pretty good value for money. As part of our review it has been agreed that we will re-engage with the Treasury and review those areas where there would be market failure if we did not act. I have to tell you, if we did not act you would not get £1.3 billion of overseas marketing. Not only will it not happen, it cannot be done by SMEs. I do not think you get the support of the SMEs that the system delivers now, not just VB itself but in England, in Partners for England, in Wales, et cetera. We have a bigger game. Whatever the outcome has been of this CSR, our objective in this review is to have the industry recognised, to have the case for intervention better understood and to ensure that there is no continual erosion of the support of this very important industry in years to come.

Q415 Janet Anderson: Can I, first of all, apologise for being late and, secondly, say thank you very much to VisitBritain for the help you gave a travel company in my constituency, Dream Travel, who are specifically going to target the Chinese market. You mentioned how important this is and they were having problems getting the relevant credentials, so thank you very much. It is based in Rossendale but the man who runs it is actually one of Nigel's constituents, so we both have an interest in that. I just wanted to ask you about the overseas operations and the costs, because I know that you are sometimes encouraged to go into collaborative ventures with the British Council or with the consulates in other countries. Is that in fact an efficiency saving or when you do that does it cost you more?

Mr Wright: It currently costs us more. We are very keen to use, wherever possible, existing British offices around the world, and we know the Foreign Office is very happy to facilitate us. Actually, though, we are very cost effective in the way that we operate around the world and, roughly, for our overseas office, it costs us about £16 per square foot to operate overseas, and we have been operating for decades and decades and we have been able to search out very cost-effective ways of operating. When we are co-located within the British Council, or within the Foreign Office, the average cost to us per square foot is about £55, so it is considerably more expensive for us. Clearly, there are related costs that the Foreign Office and British Council apply to us, but often, of course, the Foreign Office have related security and other costs in terms of their embassies or missions, and the British Council have different priorities for locations and other complexities around us, so we are currently in the middle of a very hard negotiations with the British Council because, particularly in Asia, we do use their premises quite often where we have got one or two people, and there are good examples, like in Hong Kong, where we are totally co-located, so we are in the middle of negotiations, but, of course, they are all trying to recover their costs as well and, therefore, do not necessarily give us as favourable rates as we can negotiate in our own right on the open market.

Q416 Janet Anderson: So it is three times more expensive to do that principally because of security costs?

Mr Wright: It is different. Not so much for the British Council, but there are other reasons, there are other costs that they are trying to recover which they pass on to us in the charges that they make to us. As I said, there are certain instances, and Hong Kong is a good one, where we work very well together. We have just agreed a new deal with the Foreign Office in Los Angeles, which I think you are visiting later, where we are going to move in with the British Consul and they have been very helpful and the Secretary of State has helped facilitate very good terms for us to move into the Los Angeles Consul, but as we sit here today, it is not necessarily more cost effective for us to be co-located within British Council or other British missions around the world.

Q417 Mr Evans: You put a bid in to have your expenditure increased by 20 million, I understand, and now you are facing these £10 million cuts over a period of years. Are you saying today that actually you can still deliver, although with a reduced workforce, the same sort of punch that you did when you were having £50 million?

Mr Rodrigues: Two points, if I may. We have touched a little bit on this earlier. The 20 million was a one-off specifically for the Olympics. In respect of our core grant we had asked for inflation protection. Tom, do you want to talk about the impact?

Mr Wright: Yes. I think the first thing to say, I mentioned earlier that we have increased our non-government funding from 15 million in 2004/2005 to about 24 million in 2007/2008 and we hope to increase that to 35 million. So, in terms of the national tourist boards, we already generate more of our own revenues than most other national tourist boards, and we have a got a good track record.

Q418 Mr Evans: You would have done this anyway.

Mr Wright: We would have done that anyway, but, clearly, we want to be as much a public, private, joint venture as we possibly can, but, equally so, to bring the private sector to the table you need a carrot, you need an investment to bring it together, and the big issue about our 20 million bid for 2012 is that we were going to match-fund that with private sector income to multiply up by 40 million; so one of my fears is that we are going to lose our multiplying capabilities which allow us to increase our overall pot and impact by bringing the private sector investors in.

Q419 Mr Evans: That is what I am trying to get at. When you experience the full cut are you saying you will not be able to deliver? In fact, what is the impact as far as bringing people to this country?

Mr Wright: To give you an example, to facilitate the cuts for next year alone, which is relatively modest at this stage, we have already shut our office in Dublin completely, so we now have no presence.

Q420 Mr Evans: What is the impact of that? Does that mean fewer people are going to come from Ireland to here?

Mr Wright: What it means is that we do not have people on the ground talking to the Irish press every day, facilitating journalists to visit here directly, doing the scale of activities. We no longer have information provision. You could probably say the logic for us cutting our Ireland office is it is an English speaking market and we can manage it more out of London, but, effectively, we have reduced our offices in South Africa, we have cut down the size of our offices in Germany and in Paris, for example, and that will continue.

Q421 Mr Evans: Are you able to put a figure on that reduced publicity about the UK abroad? When you spend the money you are able to say what your punch is, so what is the reduced punch?

Mr Wright: I would not like to give you an exact figure, but if in previous years we have run 500 campaigns around the world and they have helped generate over a billion pounds of public relations benefit and a billion pounds of incremental visitor spend, by default there will be less activity and a lower amount of publicity and return as a result, albeit that because we are being quite successful in generating our own revenues we can offset that a little bit, but by the time we get to the third year nine million has to have an impact.

Q422 Mr Evans: You are able, are you not, to work out the impact, how many fewer people you think would come to the UK? You will know roughly how much they spend; you will know how much of that is taxation? What I am asking you is: is this a false economy?

Mr Donoghue: Yes, if you want one word. The Ireland office is a very good example. Janet, when she was minister, opened the Ireland office and, five years on, we have closed it, but it is a very good example of the way that we used to work and the way that we work now after 12 years' worth of cuts. When we were the only operator in Ireland we were promoting the whole of Britain to the Irish Republic. With our withdrawal, there are now ten English regional development agencies promoting themselves in Ireland, plus VisitScotland, plus VisitWales plus VisitLondon. It cannot be assumed that there are less Irish people coming to Britain, but I think it can be assumed that there is more British taxpayers' money going into the Irish economy. The second point in response to your question is at VisitBritain our Holy Trinity is the customer, the taxpayer and the National Audit Office and for the customer it may well be the case that, with 18% less money, we will do 18% less work in some markets. What we are absolutely committed to not doing is cutting salami tactics across our whole campaign, because that would reduce our competence let alone our effectiveness, and, therefore, there will be some discrete areas of activity that we will abandon that we are currently undertaking, and for the taxpayer our greatest indicator of effectiveness is our return on investment, and that is something that has been independently audited according to Treasury models by the National Audit Office. Currently we provide one of the best returns on investment for the UK taxpayer and our fear is that, unless we have sufficient collateral to do that work effectively, that return on investment will go down too.

Q423 Paul Farrelly: You have touched, Mr Donoghue, on a raw nerve. In the past I always enjoyed asking our RDAs, when they were opening offices in Washington and Europe and elsewhere, why they could not open an office in North Staffordshire. There is an awful lot of people, I think, putting an awful lot of money into the economy of Cannes very shortly on the regeneration front, but allied to that (and this would not tell the whole story because there are the regional initiatives in each of the different countries) do you have a killer table that shows, not the absolute amounts other countries' spend on organisations like VisitBritain, but an amount per head of population that we could look at? Secondly, do you have another killer table which states how much organisations such as yours have received before past Olympics to promote visits to those countries and cash in on the cachet of the Olympics? That sort of information would be very useful to us.

Mr Wright: Yes is the simple answer and most countries always invest more in their national tourist boards in the years building up to the Games itself, and indeed the years after. To give you some sense of that, the most recent budget figures that we have for Australia show that they are investing over 60 million in the Australian Tourism Commission, Visit Australia.

Q424 Paul Farrelly: 60 million what?

Mr Wright: 60 million pounds. Greece is spending over £86 million and Spain is spending over £72 million, and of course our budget is reducing to £40 million three years out. Canada as well has just recently announced more money to put in for the Winter Olympics during the build-up, so there is a proven history and track record of investment in the build-up to what is the biggest show in the world and the one-off opportunities that relate to it. The other thing to bear in mind is that Visit Britain is very much a public/private organisation and we are moving towards 60% of our revenue coming from government, 40% of our revenue coming from other private sector and partnership funding, which is far less government-dependent than all the other tourist boards, so we have a very efficient model that we are operating to as well. We can supply per capita figures and it depends whether you look at Britain in the round or whether you then include monies that are spent by the devolved nations and London in the equation. We could send you a supplementary.

Paul Farrelly: That would be very useful. When we were looking at the preparations for the Winter Olympics in Canada we listened to the Canadian tourist people and the sophisticated strategies that they employ to attract high-spending people, not the stag parties that you would find in the Baltic but the highest-spending people to pump the money into their economy.

Q425 Philip Davies: One thing quickly on the back of that, I am not quite sure it is the killer table that Paul was suggesting because you were saying earlier that although previous people who have hosted the Olympics have not really seen this upsurge in tourism apart from Barcelona, which is the exception that proves the rule, if all of these countries have been spending much more money in the run-up and after the Olympics on their equivalent, and yet they have had no great benefit from tourism out of it, then it does not seem to me that that money has been particularly well spent, does it?

Mr Rodrigues: We may not have been entirely clear. It is an upsurge in the year; the work that has been done independently shows that in the three to five years afterwards, if you have merchandised the country correctly, there is a significant uplift. In fact, in the year 2012 Britain needs to be prepared for a drop, which you usually find in the year of the Olympics is outside of London and if there is no counterbalancing action there is a drop because foreigners in particular say "I would like to go to Britain but this is not the year to go because it is all tied up with the Olympics and it would be difficult to get rooms" et cetera et cetera, so the learning from other markets is a drop outside of the destination city in the year and then growth thereafter. The estimate was £2.3 billion, I believe, the Oxford Economics Review, based on external data; that is the value of the incremental spend, the bulk of which is likely to be in Greater London, but importantly some £3/4 billion is likely to be outside of London, it is one of the ways of spreading the Olympic benefit outside of London.

Mr Donoghue: It is also worth saying that Sydney did not really realise its full tourism potential out of the Olympics, partly because of SARS and September 11 which came one year on after that.

Q426 Chairman: Can I turn to the strategic review, which you have set quite a lot on. You will be aware that the Tourism Alliance, which speaks for almost all the tourism bodies, has been very critical, saying that it is not independent, that it cannot change anything because all the decisions have been taken, it is internal and incapable of looking across government. How do you respond to that?

Mr Rodrigues: There are three different points there. As to the independence I do believe that the people we have on the review panel, who are independent directors within VB, that is to say they are not speaking for England, Scotland or Wales, coupled with Richard Lambert who is highly respected at the CBI, Roger Carter who is well-regarded by all of the tourism bodies and Nicholas Holgate from DCMS who prior to that came from the Treasury. I do not think any of those people have either a preordained view of what the outcome is or a bias to supporting any one particular view. You could have a group of people who had absolutely nothing to do with tourism, but I would suggest to you that you would have a longer study and one which was probably less aware of the complexities and sensitivities of this industry. So there is always a trade-off, but I am comforted by the fact that I know that there is no preordained outcome for this, and I am comforted by the fact that there is a very clear period of engagement with stakeholders which is taking place over the next eight weeks in which there is a call for submissions from multiple bodies, not all of whom will have the same view, and there will then be a review of the proposed actions and then a consultation board, so I do not think this is going to be delivered in a stitched-up bundle to anyone, there will be plenty of time for engagement. It is absolutely true that the remit for the review was to take devolution as a given; I think that is practical. Assuming that the interests of tourism might cause a reversal of devolution would be a triumph of aspiration over reality, so we operate in a devolved way. Let us be clear, there have been some benefits of devolution. When I have been going around seeing some of the local bodies, they feel truly engaged - I spent some time a few weeks ago in Suffolk and they were absolutely engaged with the local community in a very desirable way, but we operate at multiple levels. There is a frustration, it is absolutely true, that if a tourism minister arrived from Mars and said what might you do, one possible answer is to recentralise everything, but I have seen this in 30 years in multiple countries and actually centralisation does not always work and I would not assume that that is the right answer - I must not prejudge what the outcome of the consultation is. The assumption that if we put all the money in one place we would work much more effectively and efficiently is not true, but it is true that with a devolved framework you need to work at working together. There are ways we can improve doing that, and I am sure that will come out, it is already coming out of the consultation. I would say, the third point, that one of the interesting features of being a tourism minister - Janet, with your experience you may choose to comment yourself on this - is that many of the things that the industry would want the tourism minister to do are not done in the tourism minister's silo. This is a great reach-across role and in that we would agree with the Tourism Alliance that we could as a nation be better at reaching across, and my objective out of this would be that one of the things that happens is that when people are talking about infrastructure projects they need to ask the question what will this do to the tourism industry. I understand where the Tourism Alliance is coming from, I do not believe this is biased, I do believe that we can work better together and this process, I believe, will help us to do that. I think it is really important and I agree with them that we get a better reach-out from DCMS across into the other ministries as an outcome of this.

Q427 Chairman: Do you share the wish of the Tourism Alliance to see this broader review, looking right across all government departments?

Mr Rodrigues: The review that we are doing will further underline the need to work across different departments. If you go back to Tom's welcome body that he is chairing, that is an absolute measure of how you ought to do these things. There are multiple government departments involved because there are multiple government departments that touch tourism. I do not think it is a new idea, but it is one that we would like to see more of.

Q428 Chairman: When are you going to report?

Mr Rodrigues: We would hope to have completed the review process by midsummer and then have an appropriate form of consultation on the outcomes.

Q429 Janet Anderson: Can I just say I could not agree with you more. You may recall that when I was at DCMS and Chris Smith was the Secretary of State we set up something called a tourism summit, precisely for that reason, where we got ministers from all the other government departments to say to them, you know, when you are taking decisions about transport, about regeneration, about anything really, just take into account whether it is going to have an impact on the tourism industry. Does anything like that happen now?

Mr Rodrigues: I have not seen a summit as such. Tom?

Mr Wright: There are elements of how we work together and a good example is public diplomacy, which does not so much bring together ministers, but it does bring together different government agencies to work in a cross-governmental sense, and there are particular areas where some ministers do come together, and particularly on this welcome taskforce we are encouraging to try to bring together cross-governmental leads to really address some of those concerns, but there is not a specific governmental ministerial forum as such, as you would remember - I came in just towards the end of that. You are absolutely right, that is one of our biggest challenges and DCMS by its nature is one of the smallest government departments and is most reliant on cross-governmental support to deliver the tourism agenda.

Q430 Janet Anderson: Talking about government departments, when we produce our report of this inquiry is there one thing we could say which would help to convince the Treasury of the importance of this industry? Going on from what Paul was saying, a killer fact.

Mr Wright: One of the things that I think should be very compelling with Treasury is that the perception of Britain globally, whether it is for education or business, for all sorts of different reasons, we are the barometer and we present Britain in a global sense. That drives so much of the world's economic investment and engagement with this nation and therefore we are a critical part of that global perception. Secondly, our industry not only employs 2.1 million people but it is the entry point often for low-skilled people, and particularly if the economy is under greater difficulty and employment becomes a bigger issue, we are the industry that soaks up a loss and brings people into a skilled economy, so on both those fronts the global perception of Britain PLC and the workforce that is reliant - not just in London, it is John O'Groats to Land's End - I believe those are pretty compelling arguments, but clearly we have more work to do to win that case.

Mr Donoghue: If I may say so, I have attended nearly all of the committee sessions of this particular inquiry, and indeed of the previous three tourism inquiries, much to my embarrassment, and one of the things that has been particularly impressive this time around is the absolute consistency of the industry in terms of what they want from government, and they have specified three things, whether they are SMEs, RDAs or national tourist boards for Scotland and Wales. The first is a more joined-up approach by government to tackling and addressing and realising the opportunities of tourism for the benefit of the whole of Britain, so a better joined-up approach from government; secondly, you have to invest in marketing if you really want the revenues that flow from that and, thirdly, reducing the red tape which often suffocates small and medium size enterprises right at the point where they are most creative. If I can reflect back on this Committee's own recommendations in your last report, you have also consistently said that you wanted greater recognition of tourism within DCMS and wider government and also greater political and financial investment. We would certainly recognise and reflect and applaud that, not least because if I may refer to Rosemary's previous questions at earlier inquiries, the most important bit here is skills. If we get it right for our young people who will grow and lead the industry in the future, then we get it right for constituencies and we get it right for economies, and that is essentially what a national tourist board is all about.

Mr Taylor: If I may say also, in the 18 years I have been in the industry one of the arguments I hear again and again and again is that we are so successful, why would you invest, we are successful already. We have heard already about the marketing approach that you invest when you are struggling and whilst we have demonstrated today the challenges that we have and the opportunities that are in front of us, inherently this is a very successful industry and my argument would be that if you were in a hotel business like I am - I have run four marketing departments in these years in hotel businesses - if you have a hotel that is at 60% occupancy and one at 85% occupancy, you invest in the 85% because it is easier to get to 100 than it is to get from 60 to 70. The return is better for the more successful businesses and, from a Treasury perspective, you invest in your successes because it gives you a better return as well as taking the opportunities.

Mr Rodrigues: If I may come in at the end, just on the numbers, we talked earlier about the £100 billion economy which we hope will be there by 2010, it might take a couple of years more, but it would certainly be made more certain by the Olympics. One has to remember that £16 billion or so of our spend is international, the rest is domestic. If much of that growth is to come from international, which it may have to do, if it was purely international we would have to double international; that is not a small goal. We will get some growth from domestic, but the international lever is high. The second thing is just to remember what that creates. That takes tourism to well over 5% of GDP: it will be another 400,000 people directly employed, the tax take increases by 15% and we are arguing over £9 million; it is interesting. If I had a chance to get the return a number of friends and I would be very willing to go out and try and raise the money to make the investment, the problem is that the return does not go to the place where the investment is made.

Chairman: We have a couple more specific questions. Rosemary McKenna.

Q431 Rosemary McKenna: In view of all the many events that are going to be held in Britain over the next ten years or so, in 2012 and beyond, particularly who is responsible for developing the maximum tourism potential for the Glasgow Commonwealth Games, is it yourselves or Visit Scotland or are you working together?

Mr Wright: We very much work in partnership. We set up Events Britain last year that recognised there are over 1000 events that Britain can win between now and 2020 on the back of hosting 2012, and clearly we have this exemplar, this great bid, that is helping us, whether it is Glasgow or indeed winning the World Cup bid. We are working internationally to support, but the actual events themselves, the delivery of those events and the direct marketing rest in the regional or national agency, so clearly if we take the Commonwealth Games the lead agency around that is Glasgow itself and Visit Scotland, but be reassured that we have been a supporter from the outset for the Commonwealth Games, we have been out to Melbourne, we were out supporting the bid in Melbourne, and indeed we were one of the first to support and congratulate them in winning that bid and we are offering our total overseas support for Glasgow, and we are hugely excited about it, and with our offices in Delhi we are in a great position to support the transition from the Commonwealth Games in Delhi to Glasgow.

Q432 Rosemary McKenna: That is excellent because I believe that Glasgow was successful partly because of the successful 2012 bid and all the work that went on around about that. Do you feel you are in a good position - I think you have already said this - working with the devolved administrations to make sure that we maximise the benefits, and the tensions that were feared at the beginning are not there?

Mr Wright: I am not aware of any and it is worth making a general point which is that despite devolution Visit Scotland, Visit Wales, Visit London and the RDAs, although they might have economic overseas offices none of them have tourism offices around the world, they still use Visit Britain's infrastructure around the world, which I think is (a) a reflection of how good they are, because none of them try to replicate, and (b) is hugely efficient because do we really want to have around the world an office for every RDA, Visit Scotland, Visit Wales and Visit London, all competing with the same journalists and doing the same things around the world, so we offer this infrastructure for all the devolved nations and regions to operate in a real tourism specialism, and we are helping them win more events and win some of these thousand events that we have identified, not just for London but for the whole of the nation.

Mr Donoghue: Just as a point of information, you may be aware that the Scottish Parliament is undertaking its own inquiry into tourism at the moment so your sister committee in the Scottish Parliament is looking into that. One of the things that they have already heard from both the private and public sector within Scotland is that Scotland view our overseas offices as tourism embassies for Scotland and use us as platforms from which they can do their own marketing and their own investment in the sector. That is something that we would like and we are very happy with because we are an enabling organisation, so we are committed to the national tourism strategy for Scotland as we subscribe to the national tourism strategy for Britain as articulated by DCMS.

Q433 Mr Sanders: One of the big issues that does not get a lot of coverage in the world of tourism is data and the reality of a lot of statistics that have been bandied about this morning and in previous sessions is that other people can come along and say actually those are not quite right. How can we agree a methodology and a set of statistics that is robust enough that government or any other organisation simply cannot refute them?

Mr Wright: That is an excellent question and something we have been very involved in, because the quality of the statistics has clearly been mixed over the last decade or so. We feel the inbound figures are pretty accurate as collated by the Office of National Statistics, but some of the domestic data, particularly at a regional level because of the cost of gathering significant size samples, has been perhaps less accurate than we would hope it can be. The good news is that there is more investment going into data and research, partly because the regional development agencies are more engaged in that process, as are Visit Scotland, Visit Wales and Visit London. One of the things that we were particularly pleased with was the establishment last year of the intelligence partnership that was set up in England, which was a joint partnership between the regional development agencies of England, the Office of National Statistics and Visit Britain. We agreed an independent chair, David Hornby, who some of you will remember used to be chair of the old BTA and BTC, and we are jointly funding that partnership. We are also jointly funding some specialists within the ONS who will become tourism gurus and will bring together all the capabilities of the ONS to really deliver that unimpeachable authority on tourism statistics and data. That partnership is a result of the new Visit England board and the Partners for England, jointly funded and jointly managed by the regional development agencies, Visit Britain and indeed local authorities, so that is one good step forward. Then on other data we have a partnership for Scotland and Wales such as on what we call the UKTS, the domestic data, where we have increased our investments and moved to a face to face interviewing approach to improve the robustness of our data, so I do believe that there is light at the end of what has been quite a long tunnel now, although inevitably - and I am not wanting to quote lack of funding - research, intelligence and data does not come cheaply, and to get the right sample sizes some of the research has shown that we need to invest possibly £7 or £8 million more in research and intelligence; the only way we can do that is through the sorts of partnerships that I have just talked about.

Q434 Mr Sanders: Assuming that we are able to have that investment in this qualitative research, it is still going to take some time before that methodology is accepted. What are you doing to get government at the highest level on board to actually agree that this is the way we need to be analysing this industry, because without their acceptance of the figures and the facts that the industry is able to produce, there is always going to be some civil servant somewhere who is going to be able to present a case to a minister to say "Well, minister, that is not really how you should do it." You have to get that fundamental agreement and from that flows the policy changes that the industry then requires.

Mr Wright: You put that extremely well and that is precisely our challenge. What we all want to do is sing off the same hymn sheet and a hymn sheet that is fully recognised and almost accepted by Treasury and other parts of government. That is a key part of the role of the specialists that we are cross-funding in the Office of National Statistics, it is to develop that robustness. Also during our strategic view a very specific part, as Christopher outlined, is to ensure that we engage Treasury in the robustness of some of our insights and the performance criteria that we use. Of course, at the moment you have got different agencies and different bodies coming up with different value added criteria, satellite accounting, so we do have to bring all of that together and we believe that 2008, for the reasons I have outlined, will be the year. We have our next Partners for England forum next week, bringing together all local authorities and RDAs where we will really get a consensus and a commonality of approach around some of these key research and data issues.

Q435 Mr Sanders: Finally, there is also a need to do this across national boundaries and to actually agree the same methodology across the EU because my understanding is that different countries assess their statistics in different ways, so when you do a comparison there is always an argument as to what it really means. When you said earlier the French invest so much, the Spanish invest so much, you could have an argument in this country where somebody would say if you add in all the RDAs and all the nations actually we are spending just as much. We actually need to agree a common set of standards across the EU so that we can do that true comparison.

Mr Wright: There is some work going on. I am a director of the European Travel Commission which brings together not just the EC nations but 44 of the key European destinations, and part of our role is not just to market Europe collectively, which is what we do - we receive support from Brussels to market Europe, and we have a visiteurope.com website, but also to try and look at areas of best practice, whether it is in research and also in evaluation. As it happens, Britain is often seen, whatever the weaknesses are in our evaluation and research, as the gold standard around the world and most tourist boards come to us to understand how we evaluate and how we do research, and indeed almost every nation around the world - for instance the Americans have just set up a national tourism agency.

Q436 Rosemary McKenna: And a wonderful advert that they have to market America; it is really, really good.

Mr Wright: Hopefully with the European Travel Commission, where we already share data and research, I can tell you the number of visitors to other European countries - that is how I can tell you as I have the investment that is going in in other European countries. There is really a lot more work to be done in these areas.

Q437 Paul Farrelly: My question follows on naturally actually from Adrian's line of thought. On data you said, when we were talking parochially about the different organisations including RDAs, that you provide the best return on investment. Can you provide us with some data to establish that and, secondly - although you say you are the gold standard - if you were to look around the world in terms of return on investment, people taking that approach - I mentioned Canada when we were over there - are there two or three countries that you might name that are actually ruthless and focused on that and, to use a metaphor, are the cheetahs of the tourist world, ruthlessly hunting down prey and getting that investment return while the great British lion sits there having its mane trimmed by government?

Mr Rodrigues: Dubai, the Emirates. The Emirates is a case study of how you turn a desert into a destination, with a single-minded joined-up approach. The great advantage is it is easier to be joined up in a smaller country and when the ruler has a vision that tourism is going to be 30% of GDP things happen. There was a lot of discussion in advance, but this comes back if I may, briefly, to what we hope we will get out of the review. We spent some time talking about money and if I may, Chairman, just be very brief, amongst the things we will get out of the review is a refinement of the scope and the remit of the overseas offices and other shared activities. There is good work already, but this is a journey, these strategic partnerships are a journey, not a destination. They were never going to work perfectly the first time, they are working a lot better now, they can continue to work better. There will be a clearer role for cross-agency intervention and I hope an understanding that that is relevant and important to the industry. We will remake the case for intervention in selected areas, whether it be in support of fragmented SMEs or in developing markets like India or China, and we will identify a case for further investment, but what I really wanted to make clear was I can put forward a case for further investment, but this review is not just about money. Money is important, but I have to say that greater alignment on some of the cross-agency issues would be hugely valued by the industry.

Mr Wright: If I can just answer your first question on return on investment, Visit Britain has consistently delivered over 30 to 1 in terms of its return on investment over several years, and in a way - we touched on it earlier - the National Audit Office conducted a full value for money study looking at this in huge detail. They concluded that our overseas marketing activities are well-planned and executed and that our overseas marketing activity achieved a high return. A value for money study, as you know, is months and months of working, looking at all the particular return on investment models. There were some recommendations that we continue to improve those models, but the fundamental ROI model that every one pound of taxpayers' money regenerates at least an incremental £30 is well-demonstrated and proven, and this is the model that the rest of the world often looks to as an exemplar of how to invest public money in tourism activities.

Mr Donoghue: To respond particularly to your point, Canada is an excellent example, and particularly appropriate to the United Kingdom given the fact that it is a devolved country and therefore you have a federal-type activity at national tourist board level and also at a provincial level as well, so the lessons there would be replicable here. South Africa is particularly useful, Australia similarly because they have a federal structure, and probably also Switzerland as well because of its devolved cantons. Chairman, if I can refer back to Helen's opening point which was about passion, you will have heard during the course of this inquiry some really dark cul-de-sacs and some really difficult obstacles for the industry. They are all true and they are absolutely verifiable, but it would not be appropriate to see that all is bad within the tourism sector. We are the fifth biggest industry, we are one of the most popular destinations in the world which actually, given our size, is incredible, given our weather is staggering, but given the creativity and the assets that we have in this country it is probably not surprising. This is one of the very few industries that we have in this country that cannot be outsourced - you cannot put Stonehenge in Malaysia; you cannot put Edinburgh Castle in Mumbai - this is one of our great assets and we do it very, very well. Our customers tell us, our peers tell us and tourism agencies and ministers around the world tell us. Particularly, if I can reply to you, we see about six or seven overseas tourism ministers and national tourist boards every month, who come and seek us out to find out how we work, how we are accountable and how we achieve the return on investment that we do. That for us is bread and butter, but to you that may come as a surprise. What it does illustrate I think is that with the industry that we have behind us, and the leadership that we have got that we bring together, actually we are in a really good state for exploiting the biggest tourism opportunity that this country will have had in many, many years and that is 2012. We just simply need the tools to exploit that fully.

Chairman: On that passionate note can I thank you very much.