Month: August 2017
Business Rates – concerns continue – can you help?
Concern regarding the fitness for purpose of the current bricks and mortar based non-domestic business rates system continue to be expressed nationally by various bodies. We are also raising our concerns on your behalf from a tourism and destination prospective from two potentially conflicting angles: the need for local and National Government to raise adequate revenue to pay for necessary infrastructure and service provision in local destinations and the need to ensure that physical businesses that form part of the social and economic fabric of our destinations remain viable and continue to be able to trade physically in our destinations. In the context of visitor destination, indeed in the context of almost any community, the two are by no means mutually exclusive.
Under the current property based system there is a fine balance to be struck between public revenue and business viability. In reality the answer almost certainly lies with a far more radical new approach to business taxes that goes way beyond just a charge based on the size and location of your physical business premises. Whether Government have an appetite to revolutionize their local business revenue collection methods, as opposed to doing just another cost neutral review of who pay what from the existing tax base, remains to be seen.
The latest concerns we are aware of relate to what is being dubbed as, “the staircase tax” and, separately, the growing realization among businesses but not yet necessarily among the voting public, that the much vaunted transitional business rate relief brought in to smooth the pain of the recent revaluation increases for some businesses in England and Wales, are being paid for by an equal and opposite transitional cap on benefit to those businesses whose rates have gone down as a result of the review, I.e. it is a cost neutral exercise. Like everything to do with business rates both areas are complicated and are judged by a combination of hard and fast rules and the sometimes seemingly arbitrary rulings of the local valuation office. More background detail can be found at: https://www.gov.uk/apply-for-business-rate-relief
In the case of the “staircase tax” a recent court ruling has meant that businesses that have their premises split over more than one floor or corridor in a building with more than one tenant and shared access (as opposed to say a separate set of stairs, exclusively linking and for the use of that business) must now must pay separate business rates for each part of the building they occupy, which almost always results in significantly greater total bill than that of their old single business rate. There may be some logic in this approach and doubtless some may even have exploited the possible confusion of multiple tenancy arrangements in the past? However, the fact that these businesses are being asked to retrospectively pay these increases back to 2015 in England and 2010 in Wales, when they couldn’t possibly have forecast or accrued for them, seems harsh in the extreme.
The transitional relief and transitional reduction capping which is being applied differently in both England and Wales is taking sometime to introduce. As it is introduced the realities are coming home to roost, and particularly for those that are seeing significant increases which will still come in to full effect but now over a period of up to three years rather than immediately. These businesses may have a little more time to adapt but there is no guarantee that any of these adaptions will be in a positive direction for the business or the locality.
If you have any particularly harsh local example of business rates problems, especially but not exclusively tourism or visitor economy related then can please let me know the detail. I would be particularly keen to hear of businesses that are being forced to plan to adapt in a negative manner to cope with the increased rates. Examples, rather than general principles are what will seize official’s and politician’s attention, so your assistance in gathering these would be appreciated.
Revised EU Pack Travel Regulation implementation consultation
Your assistance is required. The Department for Business, Energy and Industry Strategy (BEIS) is consulting on its proposals for the UK wide introduction of the revised EU package travel regulation which will be enacted in early 2018 and then implemented by 1 July 2018. The consultation document which can be accessed here states: “The UK Government recognises that there is a need to introduce stronger consumer protection to address this gap (new technologies and booking methods) and it is important that we implement changes irrespective of our exit from the European Union. New regulations will extend protection beyond traditional package holidays to give clear protection to UK travellers who book other forms of combined travel”.
The Tourism Alliance of which British Destinations are members is supportive of providing consumers with increased clarity and protection when purchasing travel packages. However, there is a perceived issue regarding the detrimental impact the travel package regulations have on small and micro domestic businesses wanting to work together to provide “added-value products” to customers. For these purposes added-value products are ones that do not include travel. Examples would include paying to stay at a B&B and receiving inclusive tickets to the nearby National Trust property or paying a single price to stay at a country hotel which includes a round of golf at the local course.
In order to progress these arguments with BEIS the Tourism Alliance is seeking evidence from those businesses that may be affected by current regulation or which may benefit from offering added-value products should the regulations be framed to easily allow it without potentially onerous requirements attached.
Please consider circulating the following Tourism Alliance survey to your local business networks (distribution and responses ASAP). The survey includes a brief explanation of its purpose: https://www.surveymonkey.co.uk/r/RJGLGHP
Larger businesses and destination management interests may wish to comment on the main consultation, either directly or via British Destinations. We in turn will comment to the Tourism Alliance and/or directly dependent on the comment received. The deadline for comment to BEIS is 25 September 2017 and therefore at least one week earlier to us.
EFRA Select Committee rural tourism inquiry.
The 2016 EFRA Parliamentary Select Committee rural tourism inquiry was unable to conclude due to the General Election. Faced with that prospect Neil Parish MP the chair of the original committee sent a letter in April to the Defra Minister responsible outlining the inquiry’s key findings and expressing a view that the new committee “may wish to take these issue forward in its work programme in the new Parliament”.
Because it was a letter and not a formal inquiry report Government are not obliged to respond and, as far as we are aware, have not yet done so. There are also potential technical and procedural issues involved in revisiting an inquiry after a change of Government, not least of which is that it is up to the new committee members to decide on its own programme of work.
Since the election Neil Parish has been reappointed by a ballot of MPs as the new EFRA Committee chairman, the committee members are yet to be selected. In order to help support Neil’s previously stated aspiration and encourage the new committee members to revisit the inquiry British Destinations have written to him in his capacity of chairman: Letter Chair EFRA Select Committee 8 Aug 17
Whilst it isn’t essential, it may now be extremely helpful if some other rural and tourism interests wrote over the coming weeks and months in a similar vein but preferably not in an identikit format. Letters expressing support for our letter, for the principle of revisiting and publishing the report, for a review of the inquiry’s findings, or in some other way taking forward the work started in the last Parliament are what is required; variations on the same or similar theme, not an overtly orchestrated campaign.
The aim would be to give the chairman and the committee staff sufficient weight of evidence in favour of the new committee revisiting the inquiry in some form. Letters of support from non-rural tourism areas (or the many mixed areas) might carry as much, if not more weight than letters from obviously rural destinations and specifically rural tourism organisations. If you can, please consider helping by writing yourselves or by getting other local, regional or national organisations to join in. Although it is an inquiry about English rural tourism, there is considerable relevance to UK rural tourism issues especially relating to post Brexit rural policy and supporting mechanisms.
The email address is: email@example.com and the postal address is on our letter.
A new UK National Tourist Board domestic marketing campaign for all.
Just in case you have missed or misinterpreted the recent announcements the VisitEngland department with VisitBritain are mounting a UK wide domestic market campaign on behalf of all the home nations. It’s a great new concept aimed bring a missing generation back to the domestic market by showing them the wonders of our domestic product through the eyes of international visitors (my interpretation not necessarily theirs). Its free to participate in and therefore if you can I would urge you to do so now . More details at: https://www.visitbritain.org/sites/default/files/vb-corporate/Documents-Library/documents/join_the_world.pdf and https://www.visitbritain.org/get-involved-visitenglands-new-join-world-campaign
Attraction trends 2016, “Last Mile” best practice guidance and understanding business visits reports all now available
Three new reports from VB/VE added to Britishdestinations.net:
1. Attraction trends 2016 is a 72 page summary of the annual English visitor attraction survey. If you haven’t time to read it in full then see pages 8 to 10 for its headlines.
2. Final Mile– best practice guidelines on how destinations, train operators and attractions can overcome “Final Mile” challenges as it impacts on international tourism. A lack of real or perceived physical connectivity and/or information on it, also impinges on efforts to encourage greater use of public transport in the domestic market, therefore there is almost certainly some relevance in the report to these issue too.
Find both reports at the head of the main research and statistics library page at: https://britishdestinations.net/research-and-statistics/ or individually listed in the drop-down menu from the + menu tab.
3. Understanding business visits, VB’s latest foresight edition 153 can be accessed, along with the full series of VB foresight reports doing back to edition 120 in October 2013, in our protected members section at: https://britishdestinations.net/members-area/content/visitbritain-november-2013-latest-edition-of-foresight-and-vb-trend-updates/ , if you have forgotten the password email me.
I do appreciate there’s been a lot of research released and therefore added to the library recently; hopefully you will also appreciate that it and the last decades plus worth of major reports will now remain in date order in one handy place, so if and when you and other members need it you’ll not have too far to look.
In the news
1. British Bed & Breakfast Association’s (BBA) latest campaign that targets allegedly sharp practice among some of the major OTAs got a further airing in the press this weekend. BBA is making 6 (correction 5) specific complaints to the Competition and Marketing Authority. A useful briefing note from them highlights their concerns as they relate to individual business is accessible below. For those wanting to understand more about the potential impact on their own local businesses it’s a useful piece. It may also add weight to our own wider concerns about the unintended impact of major OTAs on voluntary destination management structures and their key activities, including destination marketing: BBA – OTA Campaign
2. It being August, holidays are a particularly newsworthy. Some national papers are carrying “news” from ONS that the traditional fortnight’s holiday has been replaced both at home and abroad by many more, shorter trips. The source appears in part to be a set of data released in May by the ONS Tourism Statistic Unit covering visits, nights and spend for domestic and international inbound and out bound travel for the period 1980 to 2016. These historic data tables can be accessed from our research and statistics library. The scale of continued growth in the value and volume of domestic and international inbound and outbound tourism, should if nothing else be of particular note to the lay statistics user. This is most definitely a growth business: https://britishdestinations.net/1194-2/content/international-visits-nights-and-spending-by-uk-and-overseas-residents-1980-to-2016-2017/
Yet more research added
Two more piece of research have belatedly been added to the research and statistics library:
1. Activity Holidays: Are they the key to growth on the English Coast? (2017). Commissioned by the National Coastal Tourism Academy to understand more about this potential opportunity and to help businesses and destinations understand what they can do to attract more of the activity market to the coast: https://britishdestinations.net/1194-2/content/activity-holidays-are-they-the-key-to-growth-on-the-English-coast-2017/
Although commission by NCTA for England it has obvious resonance for the UK coasts in general and there is some relevance for non-coastal destinations that have the environment to cater for activity holidays.
2. And one that slipped under the radar when first released in mid-December 2016 a report from the ONS Tourism Intelligence Unit: Workers in the tourism sector: examining their private pension savings, Great Britain, July 2012 to June 2014 (2016).
The ONS report indicates that 69% of tourism workers in Britain don’t have private pension savings, a high figure particularly when compared across 10 major sectors. This should be of major strategic concern as we wrestle nationally with tourism skills and employment issues in preparation for a post-Brexit world. It’s an excellent short report that is well worth scanning, if not reading in full. It also contains some really useful tourism employment statistics around other characteristics of the industry and not simply pensions.
To my mind the report begs a much bigger and as yet unanswered question, “why the gap”. It is also based on historic data sets. What will be more telling is any future comparative analysis that TIU may do to cover the more recent period that includes the introduction of the Work Place Pension and the subsequent roll out of auto enrolment. One would expect the percentage of workers with private pensions in all industries to increase but will the potentially worrying gap in pension saving in tourism, as compared to other industries, have closed or are there other inherent reasons (positive or negative) for apparent failure of over two thirds of tourism workers to save for their retirement? https://britishdestinations.net/1194-2/content/workers-in-the-tourism-sector-examining-their-private-pension-savings-great-britain-july-2012-to-june-2014-2016/
Tourism levies. Your views sought
In line with the Boards decision to raise the national tempo around discussions on the future funding for destination management we have add a menu tab to the website on “Tourism Levies” which will be populated with relevant material as the debate widens: https://britishdestinations.net/tourism-levy/ . What you will find there now is the following outline and request for an indication of your destination’s position, in principle, to our outline proposal. The original reads:
1. This note outlines British Destinations’ ambition to raise the issues around the perceived need for improved and alternative funding models for destination management and destination marketing. British Destination members are asked to indicate whether they support the objective in principle, or not and to consider providing comment and any examples of their or other’s experiences in this area they may have. Non-member destination’s views would also be welcomed, as would their support for this initiative. (send them here)
2. In 2017 the British Destinations board resolved to engender a full and frank debate at national through to local level on the requirement and options for new or improved funding models for destination management and, within that, for destination and higher level national and international marketing.
3. In particular, we wish to examine whether changed and changing circumstances, including a significant reduction in local through to national public core funding for destination level activity, now means that some form of customer based tourism levy may be necessary to help maintain and sustain destination management and marketing activities in most, if not all, recognized single point and area destinations. We are taking no hard and fast view on what a customer based levy might look like in practice; part of the process is to understand all the available options and to seek to develop new and innovative ideas.
4. We are aware that several individual destinations have, or are now looking at, local options. This local approach to a commonly contentious issue inevitably leads to bespoke solutions that aim to overcome specific local objections and obstacles. To date none have surmounted local or national trade association based opposition and certainly not to the point that they might reasonably achieve the necessary support from Government. Workable new schemes that don’t need some form of legislative support to function have yet to be proposed.
5. We believe that by lifting the debate from purely local and therefore the individual destination level we may be able to find workable, semi template solutions that are applicable to a larger number, if not all, destinations; solutions that have support from a wider and large enough constituency to influence Government and others. On this occasion an adaptable, one size fits all solution is probably desirable as it is far more likely to gain Government support. The very act of looking at a legislative approach to destination management funding will also give us and others cause to examine how existing public, voluntary public/private and semi voluntary public/private sector (for example, Destination Business Improvement District) models may be improved and, thus sustained, as an alternative.
6. We are under no illusion about the scale or complexity of the task; the sheer variation in potential options and approaches, the multitude of pros and cons to each element and the potential for resistance from a mixture of residents, customers and businesses. However, unless the options are examined and some improvements to funding and funding models are found many destinations will, on current trend, cease to be effectively managed and consequently will cease, over time, to be recognized: places, products and brands, worthy of marketing as destinations at the sub-regional, regional, national or international levels. Sitting back and hoping that a destination will somehow develop a successful, transferable funding model on its own that, we can all then champion, is no longer a viable option. The issues involved need to be forced to the foreground of national tourism debate and that needs to be done now, not later.