Whitehall indifference has led to the UK tourism industry losing market share and failing to reach its potential
13th Aug 2009
Not reaching its potential, poorly regarded in Whitehall and in danger of slipping further behind international competitors: these are the key findings of a report from the British Chambers of Commerce and Travelodge about the tourism industry in the UK.
The 'Backing UK Tourism Destination Recovery' report highlights that despite being the fifth largest sector of the UK economy, employing 1.4 million people and generating revenues of £86 billion, further growth of the tourism industry is being held back by mis- management from Government. Nominally co ordinated by one of Whitehalls most junior departments, the Department of Culture Media and Sport (DCMS), over 100 public sector bodies operate in isolation without clear co-ordination or vision from the centre.
Furthermore, DCMS only has direct influence over less than £50m of the £350m per year of public sector funding spent annually to support the tourism industry. The rest is filtered through numerous different departments with little or no accountability to the Minister responsible for Tourism.
This dysfunctional approach is borne out by passenger numbers to the UK deteriorating by 18% between 1997 and 2007 and the industry having the second worst balance of trade tourism deficit in the EU.
Dr Adam Marshall, Director of Policy at the British Chambers of Commerce, said:
"Tourism will play a key role in Britains future economy, but the industry needs stronger, clearer support from Government to reach its full potential. This is a sector which can rapidly create jobs, even in the current economic conditions, yet it suffers from an extremely confused support structure. Ministers need to recognise the potential of the industry and make necessary reforms, which will help underpin the UK's economic recovery."
The prize for reforming the Government support structure is large. VisitBritain estimate that the tourism industry could create an extra 164,000 jobs and grow into a £113 billion industry by 2018 making it clear that the sector is worth Government support as both a job and wealth creator. Crucially, it is the British Chamber of Commerce and Travelodges belief that no extra investment is needed to create this growth, just reform of the current system.
The key recommendations from the report are:
- Remove responsibility for tourism from the DCMS. Instead, it should sit in the Department for Business, Innovation and Skills (DBIS) to ensure better coordination of funding. A Minister should have sole responsibility for Tourism. DBIS should take full responsibility for national strategy and policy.
- Ensure that the Regional Development Agencies are accountable to DBIS for their work on tourism. They must ensure that strategies at the regional level consistently engage business effectively, support tourism and focus on delivery.
- Give VisitBritain the necessary freedom, support and funding to enable it to focus on marketing the UK abroad and coordinate this activity across the public and private sector.
- The Tourism Statistics Agency must be adequately funded to ensure that robust statistical information about the sector is available. Without this it is impossible to accurately quantify importance.
Grant Hearn, Chief Executive of Travelodge, said:
"Reforming the support structure in place for tourism will free the industry from its current constraints and allow it to flourish. It is one of the few sectors of the economy which is both currently creating employment opportunities and can also contribute a lot more. If that is to happen however a seachange in attitude within Whitehall towards our industry must take place.
"Tourism should be removed from DCMS and the responsibility for delivery given to DBIS, supported by a fulltime Minister tasked with policy coordination. Urgent reform can then take place, freeing up Visit Britain to concentrate solely on promoting the UK abroad. If the Regional Development Agencies, domestic tourist bodies and local authorities then had to report directly in DBIS I have no doubt we would see a far better use of the public money available for tourism promotion."