2 Tourism
8. Tourism is one of the largest and most important
industries in Wales, and makes a major contribution to the Welsh
economy. Wales offers a rich culture and history, dynamic cities,
a scenic landscape, a beautiful coastline and a diversity of experiences
for visitors. The Welsh tourism sector is estimated to directly
contribute £3.1 billion annually to Wales's GDP (about 6%
of the total),[5] and provides
an estimated 114,000 jobs (about 8% of all jobs in Wales). When
including supporting businesses in the supply chain, tourism contributes
£7 billion annually to Wales's GDP, about 14% of the Welsh
economy, and supports 206,000 jobs (about 15% of total employment).[6]
Trends in international tourism
to Wales
9. The majority of tourists to Wales are domestic
UK visitors, who account for 90% of all tourists and 80% of spend.
Wales is performing reasonably well in the domestic tourism market,
accounting for 6% of all domestic visitor spending in the UK.
However, given Wales's tourism potential, we think this figure
should be higher.
10. In respect of international visitors, we heard
that Wales "has a historically relatively weak position […]
with a low share of inbound visits across most markets".[7]
As shown in Figure 1, Scotland, Ireland, and England (outside
of London) have over the past decade consistently attracted significantly
more international visitors than Wales (by market share).[8]
Figure 2 breaks down the most recent annual statistics by each
UK region. It shows that Wales attracted the third fewest number
of international tourists of any UK 'region' in 2013, behind for
example the East Midlands, West Midlands and Eastern England.
Figure 1: Percentage of overseas visitors to regions
of the UK 2003-2013
Source: Travel Trends[9]
Figure 2: Number of overseas visitors to the regions
of the UK in 2013
Source: Travel Trends
11. Along with other parts of the UK, the number
of overseas visitors to Wales has been declining for almost a
decade.[10] Over this
period, Wales's share of the overseas market has also declined.
In 2006, 1.14 million international tourists visited Wales, accounting
for 3.5% of the UK market. By 2012, this had declined to 854,000
international visitors, accounting for 2.7% of the market.
12. The global recession was said to be the main
factor in accounting for the falling number of visitors to the
UK between 2006 and 2012.[11]
However, VisitBritain told us that the severe economic downturn
in Ireland—"traditionally the most valuable market
for Wales"—was a particular factor for the decline
in Wales.[12] The Irish
tourist market in Wales had halved in value since 2009, from £50
million to £25 million.
13. The international tourism market improved in
2013, with the number of visitors to the UK increasing by almost
3 million visitors compared to 2009. But Visit Wales expressed
concern that the 2013 growth had not been shared to the same extent
across the UK. For example, the number of international visitors
to London increased by 9% between 2012 and 2013, Scotland by 10%
and England (excluding London) by 6%, whereas the numbers visiting
Wales only increased by 4% in 2013 (to 884,000 visitors). This
remains significantly lower than the 2006 level of 1.14 million
visitors.
14. We wanted to explore why Wales has a historically
weak position in respect of attracting international tourists
and why Wales was doing less well than other parts of the UK in
the recent recovery in the market. We particularly focussed on
three areas: Wales's profile abroad; the role of VisitBritain
(including its relationship with Visit Wales); and the impact
of the 20% VAT rate on tourism.
Wales's profile abroad
15. In 2010, VisitBritain published a study on the
trends, attitudes and characteristics of overseas visitors to
Britain.[13] As shown
in Figure 3, stated knowledge of Wales by non-UK respondents was
lower than any other part of the UK. London was the most well-known
(and better known than the concept of Britain itself).[14]
Figure 3: Awareness of different regions of Britain
by non-UK respondents
Source: VisitBritain
16. Witnesses agreed that Wales's low profile abroad
was a barrier to growing its international market. Professor Annette
Pritchard, Director of the Welsh Centre for Tourism Research at
Cardiff Metropolitan University, described Wales as "Britain's
best secret" with "very low brand visibility, brand
awareness and product visibility".[15]
Tour operators struggled to 'sell' Wales because:
… the population in those countries is not
aware of Wales […] there is a lack of awareness and knowledge,
which drives desire.[16]
17. VisitBritain told us that Wales had a particularly
low-profile in long-haul destinations, for instance in Asia, with
London having a higher profile in these locations.[17]
Wales was better known in Europe, although populations in these
countries tended to have narrow stereotypical views of Wales,
for instance relating to rugby and mining.[18]
A Welsh 'brand'?
18. To help raise awareness, many witnesses said
that Wales needed to develop a stronger brand identity with greater
use of distinctive, iconic images. There was a challenge, however,
in promoting the more traditional aspects of Wales and its heritage
and the more modern, vibrant image of the country. During the
1990s, Wales had promoted traditional Welsh cultural icons and
symbols, such as choirs, language and love spoons in communications
with overseas markets, although some witnesses questioned the
success of this approach.[19]
Today, Wales's castles continue to be an important attraction
for international tourists. A 2011 survey by VisitBritain showed
that a visit to Wales's castles was potentially more popular to
prospective tourists than visiting Buckingham Palace or shopping
in Harrods, with particularly strong appeal amongst tourists from
Poland, Russia, Italy and Germany.[20]
19. But we also heard that Wales ought to project
a more modern and vibrant image. Simon Gibson, Director of the
Celtic Manor Resort, spoke of the need to publicise the "modern,
iconic, contemporary nation", represented by places such
as the Royal Welsh College of Music and Drama, the Senedd and
Cardiff Bay.[21] Witnesses
noted that there were many successful music and cultural festivals
each year in Wales. Witnesses also described the various outdoor
activities and sports available to experience in Wales, such as
coasteering,[22] cliff
diving and motor biking. The Wales Association of Self Catering
Operators (WASCO) told us that there was much within Wales's heritage,
language and geography to offer good opportunity without "resort[ing]
to the gimmicky which has characterised some of the marketing
of the past".[23]
20. Mike Morgan, Director of the Welsh Rarebits Collection,[24]
recognised that there could be a "conundrum" between
the more traditional and the modern aspects of Wales, but contended
both could be marketed successfully. Visit Wales had a vital role
in "hold[ing] these messages in a coherent way".[25]
Other places, such as London, have combined their historic and
modern aspects successfully.
21. Witnesses agreed that key factors in having a
successful brand were for it to be persistent and consistent,
and that Wales had suffered from the lack of a consistent message
in the past. The Wales Tourism Alliance noted that brands took
a "long, long" time to build up.[26]
Simon Glover commented that: "You establish brand through
consistency-by not changing it every five minutes. A brand needs
to stick around".[27]
22. VisitBritain told us that it was the responsibility
of Visit Wales to develop a clear message about what Wales could
offer, which VisitBritain could then promote. Visit Wales needed
to provide:
… good quality product and the packaging
of product that makes it easier for the international visitor
to access it, and for the international travel trade to package
and sell it.[28]
23. Wales boasts some of the most spectacular
landscape in Britain and Europe, has a unique culture, language
and history, dynamic cities, and offers a range of activities
and a high quality of life. It is therefore a natural destination
for the growing market of cultural and environmental tourists.
We are therefore concerned that Wales still has a low profile
overseas compared to other parts of the UK and attracts the third
smallest number of international visitors of any UK region.
24. We believe that a lack of awareness internationally
about Wales's strengths as a holiday destination is a key reason
for Wales' relatively low share of UK-bound holidaymakers. Wales
lacks a coherent brand for the overseas market. Wales needs to
be marketed much more vigorously overseas, with a strong and clear
narrative about the country's historic and modern aspects and
attractions for tourists. For example, whilst Dylan Thomas centenary
events have been organised in Wales, London and New York, they
have not been used to promote long-term growth in the number of
cultural tourists to South Wales, through attaching the Dylan
Thomas brand to the Wales brand.
25. While the current number of international
tourists to Wales remains below pre-2006 levels, we believe there
is substantial potential for growth in Wales' tourism market if
the global economy continues to recover. Tourism bodies responsible
for promoting Wales need to grasp this opportunity.
26. We recommend that VisitBritain and Visit Wales
work together to develop a strategy, by February 2015, for promoting
Wales as a first choice destination for international visitors
to the UK. A key aspect of this should be the use of a distinctive
brand used consistently in communications to help raise awareness
of Wales internationally.
Role of VisitBritain in promoting
Wales
27. VisitBritain is the UK body responsible for promoting
Britain abroad as a tourist destination. We examined the extent
to which VisitBritain promoted Wales abroad, and its relationship
with Visit Wales—the Welsh Government's tourism team within
the Department of Economy, Science and Transport, which took over
the functions of the Wales Tourist Board in 2006.
DOES VISITBRITAIN'S TARGET-LED APPROACH
BENEFIT WALES?
28. In 2013, VisitBritain announced an ambition to
attract 40 million visitors a year by 2020 to Britain, following
a statement made by the then Secretary of State for Culture, Olympics,
Media and Sport, Rt Hon Jeremy Hunt MP, in August 2012. This represents
an increase of 8 million compared to 2012.[29]
Some witnesses believed that VisitBritain's target-led approach
would result in it promoting better known parts of the UK, such
as London, which provided a higher short-term return. Professor
Pritchard said:
Twenty-odd years ago you had the sense that there
was some sort of reasonable spread of VisitBritain activity: it
was expected that x% would end up in Scotland, x% would end up
in Wales, and x% would end in the English regions. London was
obviously seen as the main driver, but there was a sense that
there was a kind of duty to the rest of Britain-that VisitBritain
was looking after their interest as well. Targets for VisitBritain
have changed. The emphasis is on getting as many tourists in as
possible, and the easy way to get those tourists in is to market
London and to do so very visibly.[30]
Visit Wales told us that VisitBritain activities
had generated only a small proportion (4%) of the total value
of inbound international tourism to Wales.[31]
29. In response to these criticisms, VisitBritain
told us that increasing visitor numbers to different regions of
the UK (outside London) was a key aspect of their strategy. In
2013, it had spent £104 million on promotional work and international
media for Wales—12% of its total spend on such activities—and
so was "delivering disproportionately for Wales" in
respect of public relations.[32]
VisitBritain also told us that its record in attracting 4% of
all international tourists to Wales compared favourably to its
figure of attracting 2.4% of international tourists to the UK
as a whole: "if you look at what we deliver for Wales versus
what we deliver for the UK as a whole in terms of international
visitors, we are actually doing much better in getting people
to go to Wales".[33]
30. We asked the then Secretary of State for Wales
whether he thought VisitBritain ought to have regional targets.
His view was that the "important thing is to get tourists
into Britain".[34]
He said that London was going to be the principal draw because
of its status as a global city.
31. We acknowledge the efforts by VisitBritain
to promote different parts of the UK to potential overseas tourists.
We share concerns, however, that the current emphasis on meeting
an overall target for UK visitor numbers may lead VisitBritain
to focus disproportionately on promoting more well-known destinations,
such as London, at the expense of other areas, including Wales.
32. We recommend that VisitBritain sets clear,
measurable targets for encouraging international tourists to visit
different regions of the UK.
IDENTIFYING WALES AS A DISTINCT LOCATION
33. Another criticism we heard was that VisitBritain
did not sufficiently identify Wales as a distinct location. Amgueddfa
Cymru (National Museum Wales) believed that there was "still
a way to go in emphasising that Wales is a country in its own
right and not just part of the UK".[35]
This was said to be a particular issue in respect of the GREAT
campaign, trade fairs, the VisitBritain website, and holiday packages.
GREAT Britain campaign
34. The UK Government's £100 million GREAT Britain
campaign, launched in 2011, aims to promote the UK internationally
as a "GREAT place to visit, study and do business".[36]
It is described as "the Government's most ambitious campaign
event and showcases the very best of what Britain has to offer".[37]
Tourism is a key part of the GREAT campaign, and is led by VisitBritain.
35. Many witnesses did not believe that the GREAT
campaign focused sufficiently on Wales. The Wales Tourism Alliance
accepted that people who saw the GREAT brand and promotion were
more likely to make trips to Britain, but said that London as
a destination dominated the campaign.[38]
Visit Wales said that the GREAT branding did not offer a "strong
platform to help build a clear, distinct destination brand for
Wales".[39] It said
it was working with the GREAT campaign team, Visit Britain and
UKTI to "significantly strengthen Wales's profile in GREAT
marketing and PR programmes".[40]
36. The then Secretary of State for Wales argued,
however, that Wales had benefited from the GREAT campaign. In
particular, the inclusion on some GREAT campaign posters of a
map showing the location of Wales within Britain and the logo
of visitwales.com "would do a huge amount for Wales".[41]
VisitBritain presence at tourism trade fairs
37. Trade fairs present an important opportunity
for countries to promote themselves abroad. Ian Edwards, Chief
Operative Officer for the Celtic Manor Resort, stated that Wales
was often not represented at VisitBritain's stalls at tourism
trade fairs:
There are huge events that happen in Europe,
such as EIBTM in Barcelona and the international travel market
in Frankfurt. We—Wales—have no representation there.
These are international markets with 15,000 buyers who want to
bring international events into the UK, but we have no presence
there. VisitBritain will have a presence, but Wales has no presence
within that VisitBritain stand; we do not even have a stand of
our own. If you go to a conference show in London, Visit Yorkshire
has a bigger stand than Visit Wales, which is ridiculous.[42]
38. Visit Britain told us that tourism trade fairs
were an effective tool to market the UK abroad, "particularly
in newer markets where legislation may be complex, and personal
contact is all".[43]
It said that individual Welsh attractions and sites attended some
of the fairs, but that a co-ordinated approach from Wales was
needed, in order to 'sell' the country as a destination to the
international tourism market.
Website
39. The majority of VisitBritain's marketing and
communications is now online: VisitBritain stated that its digital
presence and e-communication was now "the bedrock of [our]
contact with potential travellers".[44]
Visit Wales, however, believed that VisitBritain's website poorly
represented Wales as a distinct destination, with "gaps in
product content for Wales across the VisitBritain websites and
digital channels".[45]
It also argued that VisitBritain's site had poor links to the
Visit Wales website and that traffic from VisitBritain's website
to its own was very low. Visit Britain acknowledged that its website
was "ripe for re-development".[46]
It told us it was having discussions with Visit Wales regarding
content about Wales on the website.[47]
Holiday packages
40. Professor Pritchard believed that visitors often
needed to be on their third, fourth or fifth visit to the UK before
they visited Wales. This was partly because Wales was often not
included on tour operators' pre-packed holidays to the UK, which
were popular with many tourists:
Wales is not yet on any kind of golden circle.
It is not even on a silver or bronze circle tour.[48]
Professor Jerry Hunter, from the School of Welsh
and Pro Vice-Chancellor at Bangor University and an American,
said that ready-formed holiday packages were particularly popular
in the USA: "if you really had those targeted packages to
attract Americans, they would be successful".[49]
41. For many international visitors, "Britain"
is often perceived as being England only. It is therefore important
that UK government bodies responsible for international promotion
reflect the distinct identity of each constituent part of the
UK in their activities.
42. The evidence on the effectiveness of the UK
Government's GREAT campaign in promoting Wales is mixed. We remain
to be convinced that Wales has benefited much from the campaign.
43. We recommend that the UK Government make improvements
to its GREAT campaign to better reflect Wales as a distinct location,
and report to us on progress made by February 2015.
44. Wales can be reached from London within a
few hours yet, unlike Scotland, is often not included in ready-made
UK holiday packages offered by tour operators.
45. In developing a joint strategy with Visit
Wales to promote Wales as a first choice destination, we recommend
that VisitBritain prioritises efforts to encourage tour operators
to include Wales in ready-formed UK holiday packages. We expect
VisitBritain to report progress to us by February 2015.
46. We recommend that VisitBritain improves its
website to better market Wales overseas. VisitBritain should report
back to us on progress made by February 2015.
RELATIONSHIP BETWEEN VISITBRITAIN
AND VISIT WALES
47. An important element of effective marketing of
Wales overseas is the relationship between Visit Britain and Visit
Wales. While VisitBritain's role is to promote Britain as a tourist
destination to overseas tourists only, Visit Wales promotes Wales
to both domestic and overseas markets. Visit Wales's overseas
marketing focuses on three key markets: Ireland, Germany, and
the USA. It is therefore reliant on VisitBritain to "promote
growth in tourism visits to Wales across a wider set of international
visitor markets".[50]
48. Witnesses called for better co-ordination between
the two organisations. Professor Pritchard told us that the two
organisations co-operated well in some areas, such as sharing
market intelligence, but less so in others, such as using a consistent
campaign to attract visitors to Wales.[51]
The then Secretary of State for Wales agreed that there could
be better engagement and "joined-up working" between
the two organisations.[52]
49. Both VisitBritain and Visit Wales expressed concerns
about aspects of their relationship with the other. Visit Wales
said that it generally had "close working relationships"
with VisitBritain, but lacked the opportunity to "influence
the overall direction and priorities for VisitBritain and how
these can be optimised for Wales".[53]
VisitBritain told us it had limited opportunity to address Visit
Wales's board, and would like to do so more often.[54]
50. We heard about some recent improvements in the
relationship between the two bodies. In January 2014, VisitBritain
and Visit Wales signed a Memorandum of Understanding (MOU) "to
optimise promotional activity overseas and support growth of the
visitor economy".[55]
We were told that a member of Visit Wales's marketing team would
also soon join Visit Britain's London office. The secondee would
represent Wales in internal meetings and bring "enhanced
knowledge of Wales's product and industry".[56]
51. At the ministerial level, we were disappointed
to hear from VisitBritain that there was no regular engagement
with the Welsh Government minister responsible for tourism. The
previous chief executive of VisitBritain, Sandie Dawe, had only
met the Tourism Minister on one occasion in 2012, during a familiarisation
trip with trade officials to Wales.[57]
Despite the willingness of VisitBritain to engage with the Welsh
Government, we are disappointed with the current levels of engagement
between VisitBritain and the Welsh Government.
52. We welcome recent efforts to improve the relationship
between VisitBritain and Visit Wales. Both promote Wales in different
overseas markets but good co-ordination is necessary to market
Wales in a consistent way, to share market intelligence, and avoid
duplication of effort. VisitBritain has much greater resources
than Visit Wales and there are clear advantages for Wales to be
included under the auspices of the international work of the UK
Government.
53. We recommend that VisitBritain reports on
the impact of the Memorandum of Understanding with Visit Wales
by February 2015.
Impact of current VAT rate
54. The UK Government increased value added tax (VAT)
from 17.5% to 20% in 2011.[58]
Under EU VAT legislation, member states are permitted to reduce
VAT rates for a limited number of services and industries, including
tourism.[59] Other EU
member states have taken advantage of this, with 24 (out of 28)
having reduced VAT rates for visitor accommodation, and 14 reducing
VAT rates for restaurants.[60]
55. Witnesses believed that the higher VAT rate in
the UK deterred some tourists from visiting the UK. The Wales
Tourism Alliance told us that a lower rate would enable hotels,
visitor attractions and other related tourism businesses to become
more competitive, leading to increased sales and employment:
The 20% VAT rate is a disincentive to our visitors
and has obviously had an impact […] If we want to attract
international visitors, we have to offer them incentives, be they
financial, be it making sure that we have the right product in
place or be it making sure that we link up with the right markets.[61]
56. The then Secretary of State for Wales told us
that the Government currently had no plans to reduce VAT, as it
would lead to a "significant shortfall in revenue".[62]
He did not agree that reducing the VAT rate alone would increase
the UK's competitiveness in tourism: he noted that the UK was
already ranked fifth in the world in terms of competitiveness.[63]
57. The refusal of the UK Government to reduce
the VAT rate for the tourism industry, unlike most other EU states,
could be having a detrimental effect on the Welsh tourism industry.
58. We recommend the UK Government review its
policy on the VAT rate for the tourism industry, with the ultimate
aim of reducing the current 20% rate.
5 Direct industry related to businesses proving tourism
related goods and services. Back
6
Tourism: jobs and growth. The economic contribution of the tourism economy in the UK,
Deloitte and Oxford Economics, November 2013 Back
7
Visit Wales, Welsh Government (IRW0024) para 12 Back
8
Office for National Statistics, International Passenger Survey Back
9
The figures sum to more than 100 because if someone visits Wales
and Scotland they will be counted in Wales figures and in the
Scotland figures separately, but only once in the UK total. Irish
day visitors to Northern Ireland are excluded from the Northern
Ireland figures, but are included in the UK total. Back
10
Q6 Back
11
Q261 Back
12
Q261 Back
13
Overseas visitors to Wales: Understanding Trends, Attitudes and Characteristics,
VisitBritain, September 2010 Back
14
Wales also scored less with UK respondents who felt they know
Britain overall the best, with England outside of London coming
second and London third. Back
15
Q5 Back
16
Q7 Back
17
Q264 Back
18
Q49 Back
19
Q6 Back
20
Foresight, VisitBritain, January 2011 Back
21
Q80 Back
22
Coasteering is a physical activity that encompasses movement along
a rocky coastline on foot or by swimming, Back
23
Wales Association of Self Catering Operators (IRW0020) Back
24
The Welsh Rarebits Collection markets nearly 300 hospitality businesses
in Wales. Back
25
Q113 Back
26
Q49 Back
27
Q81 Back
28
Q284 Back
29
VisitBritain, 'Delivering a Golden Legacy: A growth strategy for inbound tourism to Britain from 2012 to 2020',
April 2013 Back
30
Q20 Back
31
Visit Wales, Welsh Government (IRW0024) Back
32
Q271 Back
33
Q277 Back
34
Q310 Back
35
Amgueddfa Cymru (IRW0001) Back
36
The campaign is global in reach but has ten key markets - China/Hong
Kong, India, USA, Korea, Indonesia, Brazil, Mexico, Russian, Turkey,
and Emerging Europe. Back
37
Wales Office (IRW0011) Back
38
Wales Tourism Alliance (IRW0009) Back
39
Visit Wales, Welsh Government (IRW0024)para 25.7 Back
40
Visit Wales, Welsh Government (IRW0024)para 26.8 Back
41
Q311 Back
42
Q87 Back
43
Q296 Back
44
VisitBritain (IRW0013) para 1.8 Back
45
Visit Wales, Welsh Government (IRW0024)para 25.7 Back
46
Q297 Back
47
Q297 Back
48
Q10 The Golden circle is the term used to describe the tourism
route in the UK of Edinburgh, Bath and Stratford-upon-Avon. Back
49
Q11 Back
50
Visit Wales, Welsh Government (IRW0024) para 13 Back
51
Q20 Back
52
Q314 Back
53
Visit Wales, Welsh Government (IRW0024) para 16 Back
54
Q289 Back
55
VisitBritain (IRW0013)para 1.5 Back
56
VisitBritain (IRW0013)para 1.5 Back
57
Q292 Back
58
VAT is a tax that's charged on most goods and services that VAT-registered
businesses provide in the UK. Back
59
Details of the existing EU legal framework for VAT, including
the text of the principal VAT directive, are collated on the Commission's site. Back
60
http://www.bha.org.uk/campaigns/vat/questions-answers/ Back
61
Q48 Back
62
Q306 Back
63
Q306: World Economic Forum, The Travel & Tourism Competitiveness Report 2013
Back
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