Month: August 2018

More articles on the sharing economy added. Why are we interested?

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I have added a couple of recent news items on the sharing accommodation sector to our growing library of article on the sharing economy including today’s BBC piece entitled: “What Airbnb really does to a neighbourhood”.  Other new additions are article on: potential restrictions in the Republic of Ireland, renewed concerns in Edinburgh, Airbnb’s rebuff of hotelier’s campaign for more controls in Bristol, and belated entries on Council proposals for Bath from 14 July and the original article on Bristol hotelier’s campaign from 29 June.

If you are aware of other informative articles we’ve missed then please send the details so they can be added.  Any information on positive or negative, local experience, whether provided for publication or sharing with colleagues or just to inform our own internal debates (please specify) would be welcomed.

Why are we interested?  There seems to us that there may be a serious potential mismatch between the apparent higher national level tourism strategic view on the merits of the sector and the destination management’s operational delivery, development and planning experience in many, but not necessarily all destinations.  The sharing accommodation sector, at one extreme, is seen as being nothing but a power for good, shaking up the market and providing much needed, additional accommodation, often of a new, different, more authentic and potentially more attractive style that has broad appeal to both new and existing customers.  On the other extreme the sector’s rapid and currently, it is said, largely unregulated development is seen as creating a range of unintended, socio-economic problems both for other existing tourism interests and for wider society within many destinations, that combined may far outweighs any localised or national tourism advantages.

How to square that circle so that “tourism” and the host communities benefit from the almost inevitable, continuing growth of the sharing accommodation sector, whilst not creating all manner of unwelcome problems elsewhere within the fabric of popular destinations is currently one of our highest priority tasks. As ever, member’s views  inform, if and how we precede, the general direction to be taken and determine the ultimate nature of the goal we jointly wish to achieve.  Please feel free to contribute.

See the new articles at: https://britishdestinations.net/tourism-the-sharing-economy-and-its-wider-implications/

 

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Draft Fisheries White Paper response

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Action: coastal destination members.  Information: inland destination members

I am attaching a draft letter to Defra for your comment, and/or amendment.  Although about future fisheries policy the White Paper could conceivably impact on the Coastal Communities Fund, hence our interest:

It is deliberately blunt narrative response designed to try to make a couple of very simple points:

  • that tourism is vitally important to most coastal communities
  • and that the Coastal Communities Fund is already heavily overcommitted and can’t easily be called upon to replace EU funding for fisheries, if indeed there is any intent to do so.

It may well not be necessary but it isn’t worth taking the risk, simply for the want of bothering to writing to them.  It is also a good general platform from which to subsequently raise the usual raft of issues around the importance of tourism, the need for effective destination management, access to core funding etc. for coastal and all other well-established destination communities, with Defra, other Westminster Departments, and politicians in all Governments. I am assuming that those of you that haven’t a strong fisheries element are unlikely to respond yourselves? If that is incorrect then let me know and I will adjust the letter accordingly. Equally feel free to add weight to our response with your own.

Background: The Fisheries White paper which sets out the complexities of a post Brexit UK fishing industry policies contains a very short section on resourcing the UK Government’s future approach at section 3.  Paragraphs 3.1 and 3.2 deal with the current European Maritime and Fisheries Fund (EEMF – €243.1m over 5 years up to 2020) and, “whether and how” to replace it.  Paragraph 3.3 looks briefly at the future support for coastal communities.  This paragraph mentions future plans for a UK Shared Prosperity Fund, its potential importance to disadvantaged coastal communities and the planned consultation on it, that was set out under the Industrial Strategy White Paper.  Critically the paragraph 3.3 also references the Coastal Communities Fund (CCF) as, “another fund available to support fishing communities” (next available two-year round being 2021 – 2023).  Responses to the consultation paper  at:   https://www.gov.uk/government/consultations/fisheries-white-paper-sustainable-fisheries-for-future-generations/sustainable-fisheries-for-future-generations-consultation-document are required by 12 September 2018.

Taken as a very brief statement of fact this is all very innocuous.  However, given the importance of CCF to all coastal communities and not just to the relatively few fisheries communities within them, and viewed alongside the loss of the EMFF by 2020 and the reference to “whether and how” to replace it, I do have a nagging concern, particularly as I’m assuming that only those relatively few places with significant fisheries are likely to respond. Defra might get an unintentionally skewed fisheries view of funding requirements for all “coastal communities” or could quite easily come to their own erroneous conclusions around the level of available resources, the scale of need and the ability of the already heavily oversubscribed Ministry of Housing Communities and Local Government’s CCF to take-up any slack in funding post the demise of EEMF.  If that were the case it would serve neither the fisheries or the much wider general coastal communities’ interests.

I hope you follow and broadly agree with the rational for the letter?  The draft of which can be accessed here. Please let me have your views and any amendments ASAP and absolutely by no later than close of play 11 September 2018.

Coastal Select Committee Coastal Towns Regeneration Inquiry

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I am writing to remind coastal members that the recently formed House of Lords issue specific Coastal Select Committee is taking evidence for its inquiry into the regeneration of coastal towns and to seek comment for our own consolidated response and that of the Tourism Alliance.  The deadline for submission to the committee is 9 October 2018, therefore I need your comments ASAP:

https://britishdestinations.net/consultation-responses/open-consultations/regenerating-seaside-towns-communities-select-committee-call-for-evidence-closes-9-October-18/

Member destinations may of course wish to make their own submissions.  I have made the Tourism Alliance aware of the inquiry and confirmed that they intend to make a submission, to which I will contribute on your behalf.  British Destination will also make its own submission on behalf of the full membership.  Coastal members, in particular, are invited to send me outline  comments on their key concerns and main asks of government.  Bullet point, headline thoughts, received sooner would be preferable to detailed comments received later.

More in the news

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Public toilet provision. The BBC “Reality Check” conducted a survey of public toilet provision in England, Scotland and Wales by first and second tier Councils.  The article on their findings which at: https://www.bbc.co.uk/news/uk-45009337 prompted a number of national media reports mostly themed around the perception of significantly reduced public provision.

The headline figures are indeed stark, although it should be noted that in some cases the responsibility for provision has been handed down to a lower tier of local government (Parish, Town etc.) or outsourced under other arrangements, even in some cases to voluntary groups, so the number of closures may not be as high as the headlines figures suggests.

Nonetheless, it is yet a worrying indicator that the ability of local public authorities to maintain the quality of place, public amenities and public infrastructure to a level that at least meets or beats the visitor’s and indeed resident’s expectation are being undermined in many established destinations, by a combination of reduced funding and increased costs, particularly in those places where the principal local authority is also responsible for adult and children’s social care.

I would welcome views on whether the provision of public toilets remains as an important to the visitor economy as we once thought, for example, in our evidence to the 2008 Select Committee Inquiry on the provision of public toilets:  https://publications.parliament.uk/pa/cm200708/cmselect/cmcomloc/636/636.pdf  written evidence commencing bottom page 112, specifics on demand at page 114.

Over tourism and tourism tax. The Guardian recently carried an interesting, well-balanced  piece on “over tourism” including reference to “tourism tax” and the role of the sharing economy in facilitating uncontrolled development:   https://www.theguardian.com/travel/2018/aug/16/wish-you-werent-here-how-the-tourist-boom-and-selfies-are-threatening-britains-beauty-spots .   These are all issues that we looking at and hopefully such articles will prompt others to consider the opportunities to positively influence development, rather than to have to deal with the consequence when it all just a little bit too late.

New scheme for sharing accommodation sector. The Evening Standard carried a short article announcing plans by the UK Short-Term Accommodation Association (UK STAA formed 2017) to offer Quality in Tourism’s safe clean and legal scheme to its members.  The article’s primarily focus, like that of UK STAA, is on the sharing accommodation sector.  The concept has the support of the Ministry of Housing, Communities & Local Government: https://www.standard.co.uk/news/politics/world-first-airbnb-sanction-scheme-aims-to-expose-rogue-landlords-a3913891.html

Online sales and the gig economy. There is increasing speculation in the financial pages that the Chancellor may be losing patience with the loss of revenue from the online sales and the often closely associated gig economy.  It is suggested that there may be new taxes planned for online sales platforms for the Autumn budget.  Published figures vary significantly, but for example, Amazon the largest player in this area is said to have paid only £1.7 m in tax in the UK on revenues of £2 bn and a corporation tax bill of £4.6 m on a profit of £72 m in 2017.  The total value of UK sales was £8.8 bn with much of it apparently booked elsewhere.

The potential new taxes are said to be aimed at levelling the playing field between online and traditional High Street retail who carry the additional burdens including higher property rental costs, higher business rates and typically more/higher employment costs including, pension and NI payments.  I suspect the hard-pressed traditional retail would much prefer to see their costs levelled downwards towards those of their online competitors.  Personally, I also suspect it is far more about the realisation that the new business models are not just shifting how business is conducted but also how much government’s tax cut is and where the true value of the totality of the business done ultimately lodges.  I hope I am wrong and that by making (all?) online businesses contribute more to the public purse, in taxes, social security contributions and pension provision we will see the traditional retail model begin to stabilise.

 

Victor Middleton OBE

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For those of you have not been informed already it is my extremely sad duty to tell you of the passing of Victor Middleton OBE, a Fellow of British Destination and a valued colleague and great personal friend to many of us working in the UK tourism industry.  Victor died on the evening of Monday 13 August in Furness General Hospital, near his home in Ulverston, Cumbria after a brief illness.

Deborah his wife is understandably distressed and whilst she is aware of the great esteem in which he was held she has asked that Victor’s colleagues and friends refrain from contacting her just yet.  There will be a private family funeral, followed by a memorial service at a later date, details of which will be circulated when known.

The loss of such a wise and insightful colleague, who’s academic and practical endeavours over a period of 50 years have informed, shaped and improved the fortunes of tourism and the visitor economy across the UK will be felt by us all.


 

My sincere apologies for the late notification, the news reached me late last week after I had departed on brief family break.

 

Could abuse of business rate relief by second home owners threaten relief for genuine operators?

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Alleged abuse of business rate relief scheme by second home owners could cause the Government to review the relief and potentially penalise genuine self-catering and furnished holiday let businesses in the process.  In recent months there has been increasing Parliamentary interest in the practice, among some second home owners of claiming business relief on properties that are in fact used purely as second homes, or are only occasionally let, or loaned out to friends and relatives and therefore don’t meet the qualify condition of a commercial business.

In 2012 Councils were given the discretion whether or not to apply the 50% rebate to empty or second homes, some in popular holiday areas immediately took the opportunity to start charging the full rate, others have since followed.  By 2016 there was speculation that many holiday home owners were flipping their properties, registering them as businesses and claiming 100% business rate relief on properties with a rateable value of less than £6k, tapering to £0 for those valued up to £12k.  In 2016 one estimate put the cost of the practice at C £4m in Council Tax, however, it was not then thought to be wide spread as the majority of second homes were still thought to be registered for Council Tax.

In 2017 the 100% relief was doubled to all businesses with a rateable value of less than £12k graduation to £0 for those valued between £12k and £15k. In Scotland, England and Wales furnished holiday lets and self-catering properties must be made available for rent for at least 140 days, some of the other basic requirement differ in Scotland, whilst in Wales they also need to be let for at least 70 days in the tax year.

It is said that a significant number of additional properties have been registered as businesses, specifically to take advantage of the new higher valuations threshold. There is nothing wrong with this if these properties are genuinely being run as a qualifying business.  If, however, these are actually second homes, or occasionally let or loaned holiday homes that don’t in reality qualify and the owners are registering them to avoid paying both Council Tax and, by dint of the relief, business rates, it is at best questionable, if not fraudulent.  As businesses these properties, when sold, can also attract advantageous rates of capital gains tax as compared to those applicable to the sale of a second home. If they aren’t genuinely businesses then that could well be deemed to be tax evasion rather than avoidance?

On the flip side many established furnish holiday lets and self-catering businesses are said to struggling in the face of recent business rate revaluations which has seen some businesses above the rate relief thresholds paying considerably higher rates since the revaluation.  Any negative change to the relief  would exacerbate the problems for many, mainly smaller businesses.

Government may well ignore the issue, preferring instead to encourage local authorities to use their existing powers to require business owners who they suspect of avoidance to prove that they meet the requirements.  Appearing to meet the requirement is apparently quite easily done, whist proving avoidance is said to be difficult.  Alternatively, Government could review and change the thresholds and qualifying requirements which could easily penalise some of the smaller, genuine operators.

Representing the interests of destinations, I am torn between ensuring that local Council partners receive the funding they desperately need and are entitled to and the need to protect the business interests of your local partners, including the self-catering and furnish holiday let providers.   In anticipation of further movement on this issue post the summer Parliamentary recess, I am seeking any local evidence and views on issues outlined above that members are able to offer.

Mixed messages in the latest news: Swings and roundabouts for UK tourism?

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Household spending.  On 26 July ONS issued a report entitled “Making ends meet: are households living beyond their means?”.  Its key findings have since featured in a number of financial articles.  The report states that UK households on average spent £900 more than they earned during 2017, the first time that average household expenditure has exceeded average income in 30 years, on this occasion creating a £25 bn deficit in the year, contributing to the worst level on record.

This worrying news isn’t brand-new, the figures coming from the ONS household expenditure survey 2017 first published at the beginning of 2018.  It was also subsequently referenced by the Governor of the Bank of England in his discussion of the recent base rate rise which was, in part, aimed at reducing unsustainable levels of sending and discouraging the accumulation of household debt.  As a national average the overspend and associated debt isn’t evenly spread, it is greater away from London and the South East of England and far more concentrated in lower income groups and the under 30s.

What are the implications for UK tourism, if any?  Experience suggests that tourism and the wider visitor economy are some of the first areas of discretionary spending to be curtailed and can be the slowest to recover when the economy improves. A squeeze on UK household expenditure will definitely hit discretionary spending, if it isn’t already doing so. Lower income groups are likely to be hit hardest, as are those destinations and visitor economy products that are relatively more targeted towards them.  Some of those loses may be mitigated by other groups trading down as all but the highest income groups are likely be affected in some way by this squeeze on disposable income. There is also a question mark over the degree to which “holidays” have become a life style essential for many, rather than a discretionary item in recent years, hence in part perhaps the recent increased levels of household debt? It may be too early in this summer season to assess and too near the recent base rate increases to see marked changes resulting from it yet but there is still good reason to be concerned about the likely negative impacts on domestic tourism and the wider visitor economy now and going forward in to 2019 and beyond.

Exchange rates. In other financial news the “plummeting pound” and its predicted continuing BREXIT inspired volatility is said to be having potentially positive impacts on this year’s domestic holiday taking and on international visitor numbers.  The British are said to be choosing to stay at home in larger numbers (but are they all holidaying and/or day tripping at home?) and overseas visitor numbers continue to increase as more international visitors exploit their greater buying power (albeit much of it still London focused?).  The weak pound is also said to be hurting the late booking UK summer outbound market and major travel operators who still have quantities of increasingly distressed, stock to sell.  Whether the exceptional good weather in July had as much to do with the suggested continuing domestic boost, as the poor exchange rates remains to be properly assessed; as does both the GB Tourism Statistics and UK International Passenger Survey figure for the main summer season that, for very good practical reason, are produced several months in arrears. Only when the data for the full summer is published (December?) will we know for certain whether the anecdotal evidence is supported by national survey results.

More domestic holiday taking and more international visitors could be viewed as a significant success, but success that is predicated on poor exchange rates and economic uncertainty is a rather hollow success that is ultimately unsustainable for the Nation as a whole.  This is well illustrated by today’s reports of a resurgence of interest in Turkey as a UK popular summer holiday destination based largely off the back of crash in the value of the Turkish lira; nice for the tourists, OK for tourism businesses but desperately bad news for the majority of the Turkish population.

Potentially the impact of exchange rates on domestic and international tourism may pale into insignificance against the possible immediate impacts of other potential BREXIT related uncertainties.  Is post March 2019 currently, really the best time to be planning to visit the UK, or to leave it on a foreign holiday?  Several travel commentators currently think not.  Much now depends on what develops in the coming few months and what actually happens post-midnight on 29 March 2019 and how quickly the tourist industry and prospective tourist then respond to it.

Over tourism. Anecdotal evidence, including media reports of a 20% increase in visitors to Cornwall this summer, supports the view that domestic tourism has had a significant welcome boost.  That said not everyone, everywhere is being as optimistic about their own destination’s performance and many of the same reports on Cornwall 20% boost, have also contrived to misrepresent Visit Cornwall’s very sensible attempts to deal with “over tourism” at two small and relatively isolated locations.  So, what is the truth behind the headlines?

Good weather and the “Poldark effect” have meant that Porthcurno and Kynance Cove on the adjoining peninsulas on the toe of Cornwall have become unexpectedly overcrowded and, at times, almost inaccessible by car, particularly during busy weekend periods.  Consequently, Visit Cornwall have suspended promoting them and instead are encouraging current visitors to visit one of the other 400 plus beaches on Cornwall’s other 400 plus mile coast and return to see Porthcurno and Kynance Cove on another day, preferably on a subsequent visit, perhaps even one made out of main season; all of which seem to be very sensible marketing messages in face of an otherwise difficult situation.  In parallel Cornwall Council as the asset managers are pondering how best to manage the physical situation locally.  Some of the reporting of this and the media headlines in particular, might suggest to the casual reader that Cornwall is full or that Visit Cornwall are actively discouraging visitors from going to beaches in general, neither of which is true.

Visit Cornwall’s central point is that there is no benefit to either visitor or resident if the volume of visitors exceeds carrying capacity and as a consequence the visitor and the visited both have a bad experience, that neither will wish to repeat.  As yet routinely managing tourism volumes, so they don’t exceed carrying capacity isn’t a mainstream destination management or destination marketing organisation function in the UK but it could well become one, during peak periods in an increasing number of urban and rural hotspots, if domestic and international tourism and day trip volumes continue to grow.  We should be thankful that we have yet to reach the levels of “over tourism”, for example, experienced in Rome or Venice where at peak periods visitors can’t actual experience what they come to visit because of the density of the crowds being channelled past international travel icons like the Trevi Fountain.

It is to be hope that in the UK as a whole we will take a common-sense approach like Visit Cornwall’s and encourage physical dispersal to equally attractive but currently, less populated alternative destinations or place of interest within them, rather than going down the alternative route of corralling, controlling and traffic managing the excessive flow of visitors in situ. The latter approach may retain immediate volume and value locally but in doing so it can give the visitor a manipulated, half-baked, tourist version of the genuine experience. That, I would argue, seriously threatens the longer-term volume and value and sustainability of the destination, as most people go to experience the place, not to experience being an obvious part of the tourist scrum.

What of course Visit Cornwall couldn’t reasonable be expected to do, had it been necessary, was to suggest that visitor disperse to say Devon instead of, or as well as the rest of Cornwall.  Managing occasional peaks by a policy of much wider regional or national redistribution can only conceivably be managed at a regional or national strategic level, by regional or national bodies.  Even then these bodies are likely to be precious about trying to retain as much as possible of any redistribution within their own, albeit larger, administrative boundaries. If we genuinely think that: politics, international finance, effective marketing or even some guaranteed better weather might somehow contrive to continue to sustain ever-increasing tourism volumes, then it may be prudent to start discussing with the National Boards what their policies are, if any, on the management of point or wider area, over tourism?  For example, do they see this as a purely local management issue or one they should be prepared to engage in, perhaps for the very reason that dispersal by local management interests beyond local administrative boundaries isn’t currently a practical proposition, especially in the face of local, often paying, business partner’s opposition.

Can you help?   If any of the membership have anecdotal evidence on the main season’s performance so far, I would welcome it. Views on the local policy or national strategy on the management of over tourism, something I know many of you would love to have the need to face, would also be welcomed. It’s far from a mainstream topic yet but it one which is starting to appear somewhere, every main summer season and if nothing else I would like to be in a position to start offering an informed destination-based view on how best to handle it.