Month: June 2019
1. Formed in March 2019 a new Westminster All Party Parliamentary Group for Air Passenger Duty Reform has launching an inquiry on, The impact of air passenger duty on the UK post Brexit. The group’s creation follows on (coincidentally or not?) from the HM Treasury report on the impact of VAT and APD on tourism in Northern Ireland published in 29 October 2018, which roundly dismissed the case for a reduction in Northern Ireland and by inference across the UK.
The case for reducing APD in the UK has not, in my view, been strengthened by the Scottish Government’s recent decision not to pursue a 50% reduction moving to 100% in APD in Scotland, nor by the fact that they are doing so largely on environmental grounds (7 May 19). The potential impetuous of differential rates and their potential impact, especially on airports in Northern England has just gone away, while the environmental imperative has been given greater credibility; regardless of whether or not you believe ADP is principally an environmental tax design to reduce impacts and/or make the polluter pay, or simply a revenue stream for HMG (or any of the many shades in between the two).
I don’t propose to respond, for or against a reduction in APD to the APPG’s call for evidence, unless there is a strong and as yet unexpected ground swell to do so from within the destination-based membership. I am not planning to respond in the certain knowledge that the Tourism Alliance will be submitting comments as they have done before, strongly supporting the case for a reduction in APD. These will be based largely around arguments about international competitiveness and the need to retain and grow the UK share of inbound international tourism. Even if British Destination’s membership as a whole were to take an opposing view, which I doubt, it would be highly unlikely to have sufficient weight to block or mitigate the majority view held among the Tourism Alliance’s largely private sector trade association members.
The call for evidence can be found in the dropdown from the “Consultations” main menu tab or go direct to the page at: https://britishdestinations.net/consultation-responses/open-consultations/appg-for-air-passenger-duty-reform-apd-reform-inquiry-closing-19-july/
2. Heathrow expansion master plan has been revealed and is now undergoing a 12-week period of statutory review. The plans envisage the third runway being completed by 2026 and the remaining supporting infrastructure, including new terminals and access complete by 2050. Plans apparently include: the eventual creation of parking for a staggering 53k vehicles, an additional 260k flight and 50m additional passengers a year by 2050 (Gatwick carried c 46.5k last year):
Again, unless there a case made to me from the membership, I don’t currently intend to respond. Some individual members directly impacted by increased traffic from Heathrow, or who have local airports that may be effected by the Heathrow expansion may of course think that this represents a further opportunity for them to influence, either the Heathrow expansion plans themselves or the wider issue of increasing UK airport capacity and/or the final selection of Heathrow as the Westminster Government’s preferred option for expansion in South East England.
3. There has been a lot media coverage in recent months regarding difficulties among UK and EU airline operators, especial in the budget sector. 2018 was not a particularly good year for the sector and prospects for 2019 are still very mixed. Published in February the following article remains a useful overview of the underlying issues:
Visit England are soft launching a new product that was initially linked to the Discover England Fund programme. The “new online platform, Tourism Exchange Great Britain (TXGB), is a one-stop exchange for English tourism suppliers (e.g. accommodation providers, attractions, tours, etc) to link with distributors (e.g. online agents) with reach all over the world”.
Those in England involved in DEF projects should already be aware of the new platform and the opportunities it presents, via DEF development channels. Those not involved in DEF projects may not have seen the outline released in a recent VB/VE newsletter. As this is a DEF project it isn’t open to colleagues outside England but I am speculating that, in time, it might be due to the VB/VE relationship and the current international focus of the project.
I know very little beyond what is contained in the VE outline briefs and I am getting very mixed opinion from those already partly in the know via their involvement in DEF. Headlines from the brief include a 2.5% commission from the suppliers paid to the site on top of any commissions charged by the distributor on any sale made via the system. Distributor participation is free. Details of how distributors choose to distribute which product on the site, or not, and the financial and other contractual arrangements between suppliers and distributors operating on it are yet unclear, even after reading the briefing materials. This is of course the type of nitty gritty information that we all need to understand before we can start making any firm judgements on how it serves the interest of local businesses and the DMO’s, many of whom are distributors and or whose business models are increasingly impacted by the activities of third party distributors.
I am already confident that this is a very exciting opportunity for many suppliers. I am less certain about is how it will mesh in with existing destination management and destination-based distribution and marketing channels. Regardless, it is clearly a very significant development and one I feel you would all wish to be aware of and, in England, actively engaged with from the outset.
See the VE web page giving the outline here (note the more detailed briefing material for supplier and distributors can only be found once you click to register an interest). The original newsletter can be found here and for ease I have added links to the more detailed distributors brief here and the suppliers brief here, so you don’t have to go looking for them.
Any informed views and comments on this major initiative would be welcomed.
Those watching the development of Destinations BIDs as a supporting mechanism for Destination management may wish to note:
1. Southport’s DBID was voted through for a second term last week, joining Bournemouth Coast and Town Centre in 2017, Weymouth and Southend in gaining a second terms in 2018. Great Yarmouth is the next big destination BID player to renew later this year. Of possible interest to those going through the process or thinking of doing so, Southport raised its minimum rateable value from £2k to £7k paying the 1.5% levy, reducing the overall number of businesses in membership of the BID from c 950 to c 730. Although this has reduced the annual revenue by c £49k to c £436k it should also significantly reduce the management workload which is disproportionately higher, relative to return for a multitude of very small contributors.
Like all the DBIDs featured in our “Business Improvement Districts & Tourism” page the construct of the BID is specifically tailored to local circumstance. In Southport’s case the DBID essentially provides things for the visitor once in town, from flower planters, through visitor hosts to Christmas lights and some additional events outside the main and shoulder season. The separate membership funded Marketing Southport promotes the town externally and the Council’s tourism team do the bulk of the delivery of the marketing, of events organisation, of business tourism and conference support and generally do the operational destination management, operational and strategic planning etc. It is very much a triumvirate, working with the wider council to manage and to market the destination as a destination.
2. The Yorkshire Coastal BID, the first dual Council area DBID in England, has been cleared to operate across a variety of coastal towns and smaller communities spread along Scarborough Council and East Riding of Yorkshire Council’s coast. In late May the Secretary of State finally dismissed the appeal against last November’s successful vote in favour of the scheme that runs from Staithes North of Whitby at the top of North Yorkshire down to Spurn Point South of Withernsea at the bottom of the East Riding of Yorkshire. Four years in the making, this is the most significant event in larger area DBID developments, since the Isle of Wight DBID (2016), itself unusual due to its physical island status. Based on a minimum rateable value of £12k, using 1.5% levy the Yorkshire Coastal BID is set to raise £5.4m pa, albeit to be spent on agreed projects, over a significant number of towns, covering a very large coastal area.
3. As those of familiar with BIDs, Destination BID and the as yet untried Tourism BID (large convention supporting City based BIDs) will know, the basis on which the charges can be levied doesn’t have to be based on a percentage of rateable values; it could be a charge based on the numbers of windows, or on how tall the owner is, if that’s what you and your business community wish it to be! This flexibility in the existing legislation has led to ongoing negotiations within some of the larger, convention centre and events orientated Cities who are looking, with the help of their own accommodation sector, at D or T BID, levy based on a per bed, per night occupied basis. If adopted, this would in effect be a bed night levy but one that wouldn’t require any further Government approval or legislative change to allow it to happen.
I offer it as insight into the thinking of both the destination management bodies and some of the member accommodation businesses in larger City destinations at this time. This flies in the face of the view that all of the established accommodation sector is dead set against of a “bed tax”. Many still are but increasing numbers are coming around to the view that local destination management and marketing does need to be formally supported and this may just be the most practical way to achieve the aim. The BID approach has the distinct advantage in that contributing businesses have considerable influence before the event and, subsequent, control around what the money raised will be spent on. If a BID is approved, all eligible businesses contribute to the cause regardless, thus, eliminating freeloading within contributing sectors. The business community as a whole can also choose to withdraw its support every 5 years (also a major vulnerability?)
It may of course not develop beyond the discussions phases, but it does indicate a growing recognition that both the public sector and the voluntary private sector funding models for destination management are failing to generate adequate resource. Success of a BID based approach in the major Cities would pose some interesting issues around the ability to compete for the many other urban and rural destinations across the UK who are in equal, if not arguably in more need of destination management and the wherewithal to make it happen.
It, is also worth noting that destination management is not the only potential recipient of any BID or new legislative based tourism levy funding. The cultural sector through the Core Cities Group has also identified such levies as a potential source of future revenue for cultural activities and is recommending a pilot of “BID+” and of a “tourist levy” (see page 3 and 36 of the 2019 Cultural Cities Enquiry for more detail). Perhaps sensibly they have not yet specified this as a bed or overnight levy, although practicalities of collection almost inevitable lead in that direction. Finding a practical, fair way to levy day as well as staying visitors is great challenge and the source of much of the accommodation’s sector’s current objections to a tourism levy or bed tax as they see it.
Details of the DBIDs in operation mentioned above, together with details of many other inland and coastal DBIDs can be found at paragraph 3 of the following Britishdestinations.net page:
If you need any advice on Destination BIDs please feel free to ask. We have built a lot of background knowledge around the subject and we also have a number of member contacts willing to assist other British Destination members develop their own approaches to these novel but often complex, local partnership mechanisms.
1. The Westminster Government have now responded to the House of Lords’ Regenerating Seaside Towns and Communities Select Committee, inquiry on The Future of Seaside Towns. Of overarching interest to all will be the outright rejection of any reduction in VAT on Tourism at paragraph 6 page 8 of the response.
Sadly, for those with an interest in the inquiry there is no easy option other than to scan all 38 recommendations pages 7 to 37 and then focus on the response to those recommendations that are of most immediate interest to your own circumstances.
Comments on the sector deal and tourism zones paragraphs 3, 4 and 5, the future of the Coastal Community Fund (beyond 2021 a matter for the forthcoming spending review) at paragraph 34, the rejection of any further enterprise zones paragraph 34 and various references to the Future High Street Fund and UK Shared Prosperity Fund, found throughout, where of most immediate interest to me. As with most of these responses, the reply has been used to highlight what Government has already done or are planning to do, rather than necessarily saying anything of real substance that addresses the concerns underpinning each recommendations made. See the response on the consultation page (4th link down): https://britishdestinations.net/consultation-responses/open-consultations/regenerating-seaside-towns-communities-select-committee-call-for-evidence-closes-9-october-18/
2. Those with direct or indirect interest in the provision of theatre, conference and indoor events facilities may wish to note that Preston Guild Hall has recently gone into administration. Bought for £1 from Preston Council in 2014 the venue has seen considerable investment. Its current owners are still hopeful that the new operators will be found and that the venue will reopen soon: https://www.lep.co.uk/business/pledge-to-re-open-preston-guild-hall-within-weeks-after-administration-shock-1-9806303 .
3. Hugh Fearnley Whittingsall and co-presenter Anita Rani’s three-part BBC documentary due to start on Monday 10 June is likely to help raise public anxiety around single use plastic up a notch or two more ahead of Government consultations on various measures to reduce, recover and recycle plastic. A printed teaser in the popular press two weekends ago has already resulted in the Malaysian Government promising to return large quantities of poor quality or contaminated plastic waste to source, including the UK and to clamp down on (ban?) the recycling trade in Malaysia which has boomed since China’s ban on accepting Western Nation’s plastics for recycling. The Malaysian issue although only a small part of the programme does beg some serious question about the infrastructure requirement to cope with current levels of plastic recycling in the UK, let alone that required should measure like an effective deposit return scheme (RDS) be adopted in 2020 as Government are currently promising: https://inews.co.uk/news/environment/anita-rani-and-hugh-fearnley-whittingstall-reveal-how-much-waste-we-generate/
4. If nothing else the Hugh Fearnley Whittingsall teaser reports reinforced my own growing realisation that reducing single use plastics isn’t the simple linear process. I have as promised asked colleague in various other industry trade bodies what their stance is on Return Deposit Schemes. Unsurprisingly the pub, restaurant and hotel trade bodies are all pushing for exemption from RDS for all on-sales and, thus, the bulk of their sales. They really don’t have any other views on the wider impacts or how to make the scheme work effectively across other businesses. It does makes perfect sense for them to do this but it does means that the wider potential implications for other businesses, and on such peripherals as, for example, place making and on waste and litter management aren’t being addressed from a tourism and visitor economy prospective by any of the larger “tourism industry” players. Nor are issue like how do make the scheme work in practice if identical containers sold in different circumstances have a significantly different notional value? Can I take my empty bottle from the pub and claim a refund from the off-licence? Or could someone take hundreds of thousands of bottles from the pub waste stream and claim the deposit from the RDS waste management “organisation”? The devil will be in the detail. I will continue to raise the need for a practical, widely applicable industry solution with the Tourism Alliance. Meanwhile any local views on the best way forward or suggested solutions would be appreciated.