Committee for Culture, Media and Sports: Tourism Inquiry 2014/15 Report
On 23 July 2014, the Culture, Media and Sport Committee launched an inquiry into Tourism in the UK. An overarching theme of the inquiry was to examine ways in which the UK’s tourism potential can be developed for the benefit of local economies and the country as a whole.
Based on the findings of this inquiry, earlier this month the Committee published its Tourism Report for 2014/15, setting out just how important the tourism sector is to the UK economy, and providing recommendations to the Government on how to best support the sector.
The overriding message of the report is that Tourism as a whole, across the UK, has not received the support it should. Neither has it been accorded the attention and status it should by the Government. Indeed, the report states that a major reason for undertaking an inquiry was to initiate a debate on tourism policy – “a policy area that has, in the committee’s view, attracted too little attention, not least in Whitehall.”
Below is an outline of the key findings and recommendations set out by the report. Please click here for a more detailed version.
Introduction/ Tourism Matters
In 2013, of the 32.8 million visits to the UK by people living abroad, 39% were as part of a holiday.
Since 2007, revenue from inbound tourism has risen by 31%, from £16 billion to £21 billion in 2013, creating 90,000 more jobs. Tourism is now the UK’s fourth largest employing industry.
The Committee argues that tourism should have a more visible profile in, and be more vigorously promoted by, its sponsoring Department.
Regional and Local Tourism Organisations
“the sub-national tourism structure in England is effectively broken and that this will increasingly affect regional tourism economies.”
In July 2012, the Government abolished Regional Development Agencies, which had a statutory responsibility for developing tourism, and replaced them with Local Enterprise Partnerships. This reform has as a whole had a damaging effect on the UK’s regional tourism structure, and the funding tourism receives locally. The Committee judged that abolishing the RDAs without putting in place adequate arrangements for tourism protection was a mistake.
VisitBritain and VisitEngland
VisitBritain is the agency responsible for international inbound tourism, funded by the Department for Culture, Media and Sport (DCMS). It is responsible for promoting Britain worldwide and developing its visitor economy. VisitEngland is responsible for domestic tourism and marketing England.
The Committee agreed with the Government’s conclusion that there needs to be a clearer delineation between the roles of these two bodies.
Major discrepancies between the respective budgets of VisitEngland and VisitBritain (a combined total of £29 million in 2014/15) and those of VisitScotland (£50.3 million) and VisitWales (£20 million) were highlighted by the Committee. If VisitBritain is to continue to compete internationally, it needs to continue receiving adequate funding.
Encouraging Tourism Throughout the UK
Nearly half of all inbound visitors to the UK only visit London, which received over 17 million in 2014. There is evidence that many tourists would be interested in visiting other destinations across the UK, but that the relevant information is not accessible. The Committee believes this is due to a failure in the regional tourism structures. More could be done to ensure that visitors to London also travel to other tourist destinations around the UK.
The Committee is concerned about the negative impact that the complexity and cost of acquiring a visa is having on visitor numbers. An unfriendly welcome at UK borders by immigration officials and Border Force staff is also identified as being detrimental to the UK’s tourist industry.
Further, the Committee has suggested that the Government act on the advice of the Howard Davies review (examining the need for additional UK airport capacity) once it is published quickly and decisively. Making more use of regional airports would be a useful way to increase visitor numbers in the short term.
Tourism in the UK
Evidence presented to the Committee highlighted the important role that hosting big events, such as the 2012 Olympics and the 2015 Rugby World Cup, can have in attracting people to the UK. Even bidding to host large events has an important role in raising the UK’s worldwide profile. However, the Committee concluded that even greater attention needs to be paid to ensuring that such events leave a lasting beneficial legacy.
Bernard Donoghue, of the Association of Leading Visitor Attractions, told the Committee that reversing the decline in visitors to certain UK coastal destinations is “the biggest tourism challenge the UK faces.”
In January 2013, the Government announced almost £46 million of funding for seaside towns in England and Scotland, to be provided by the Coastal Communities Fund (CCF). Across the UK, the CCF is funding 211 projects, which will create almost 12,400 jobs and provide over 6,000 training places and apprenticeships. The government has committed itself to the CCF until 2016/17.
The Committee praised the ambition to rejuvenate British seaside destinations. They believe that while traditionally these destinations have catered for domestic markets, there is scope for attracting international visitors too.
In 2014, the Chancellor announced a reform to APD, changing it from a four band structure to a two band structure; this is to come into effect from April 2015. Following the Chancellor’s Autumn Statement, APD for children will be removed from April 2015 for under 12s, and from April 2016 for under 16s.
The Committee recommends that the Government analyse the impact of APD on the UK’s tourism industry, monitoring developments in Scotland and Wales for their impact on England.
Supporters of the Campaign to Cut Tourism VAT maintain that UK tourism is at a major disadvantage compared to other EU countries, because many other EU member states have a reduced rate of VAT. In response to evidence on this subject, the Committee suggests that the Government perform its own thorough analysis of the costs and benefits of reducing VAT on all tourism services.
The Committee also recommends a broad, public review on tourism taxes, including VAT and APD. Where the evidence leaders and practicalities allow, these taxes should be lowered to benefit both tourism and the wider economy.
Regulation and Competition
“For our SME members, compliance with the raft of legislation imposed by Government can be a considerable challenge. Whilst many attempts have been made by Government to address this, either through individual initiatives for small businesses or the wider red-tape challenge, the delivery of real change has been disappointing.”
The Committee is concerned about the level of complexity and the detrimental impact that regulation can have on UK tourism. This effect is exacerbated by the fact that the majority of UK tourism consists of micro – small businesses. As a result, they believe that more needs to be done to ensure that relevant information is provided to tourism businesses. Further, the Government needs to be aware of and take into account the impact that regulation can have on tourist – based business when negotiating with EU partners.
The Committee also recommends taking on board advice from within the industry, and lowering hotel (and other forms of accommodation) VAT, to make the UK more competitive with other EU countries.