Destination BIDs and Tourism Levy update

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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:

https://britishdestinations.net/business-improvement-districts-and-tourism/

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.

 

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