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Previewing the Queen’s Speech 10 May 22

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Tomorrow’s Queen’s Speech will as ever set out the Westminster Government’s programme of legislation for the coming Parliamentary year, some of it specific to England some of it directly or indirectly applicable to the UK as a whole. It has been the subject of considerable media interest over the last week and, in particularly in the broadsheets over the weekend. Doubtless some of that comment will have been encouraged or aided by HMG itself. 

I not going to be around for a week from tomorrow morning, so I won’t be in a position to circulate any detail of the highlights until the following week.  As this is essentially a schedule of the proposed legislation programme, none of which is guaranteed to come into force and any of it that does typically taking many months if not the full year or more to come to fruition, a week’s delay in any commentary neither here nor there.

In the meantime, tourism related legislation to watch out for include:

1. Actions to give Councils in England greater powers to bring vacant (retail?) properties back into viable usage.  The coverage of this issue that I have seen has majored on forcing (encouraging?) landlords to rent out vacant properties and/or give greater (better?) CPO powers to Councils.  The devil will be in the detail.

Understandably, the necessarily superficial discussion in the media hasn’t ventured too far in to the thorny thicket of cause and effect. It is to be hoped any the legislation will go there and will aim to tackle the multiple causes of vacant retail properties and not just gift local government the authority, commonly described as “powers”, to try and deal with the obvious visible, physical symptoms. 

Real “power” doesn’t just include the authority to do something but also the realistic opportunities and means to do it effectively.  In this case it seems to assume that once the reluctant landlords can legally be persuaded, or forced to let or sell currently vacant properties, that the private, public, third sectors or a combination of all three have a ready stream of viable usages lined up for currently vacant properties and critically then ready access to both the capital and revenue funding to expedite their plans, at scale.

It is very unclear to me, whether these measures are going to be aimed at dealing with the recent ubiquitous problem of multiple vacant retail properties, currently often in reasonable physical condition, in your typical high street and beyond, or more at the longer-term property blight (semi dereliction?) that is found in some but not all places. Or is it, as I sincerely hope, aimed at both? 

I am also unconvinced by the popular view, or inference that the UK is somehow full of stubborn, “greedy” landlords who take some form of perverse pleasure in keeping their properties empty and gaining no rental or other obvious income from doing so. I naturally tend to presume that many land lords are keener than most to find mutual financially viable usages for their once more valuable assets? I do recognise there are many reasons for owning property and I am regularly told about some often-perverse benefits (fewer or less painful disbenefits?) that allegedly arise from leaving buildings empty, once they become vacant.  If these benefits genuinely exist, then let’s hope the new legislation targets them effectively and doesn’t simply end up shifting the responsibility (blame) for failing to adequately address rapidly escalating retail blight on to local councils who until now have had few functioning levers to do anything about the effect, let alone all the root causes.    

I can’t help thinking there may be some potentially pertinent lessons here from coastal resort regeneration in the 1990s and 2000s (still ongoing).  Much of that related to former guest houses and some hotels and the blighting effect of poor-quality HMOs on neighbouring accommodation and the wider business community. The problematic difference of course is that much of the problem of HMO blight was, and still is, being resolved by improved use as better quality residential of visitor accommodation, for which there was and still is a natural demand.  Meaning in short that properties built and conveniently located for a particular purpose (housing people) haven’t had to find a fundamentally different purpose for which their fixed location might not be entirely suitable.  

Its arguable whether the bulk of the solution to retail blight is more, different or better bricks and mortar retail? There will almost certainly  be a need to be some fundamental repurposing or change of use for a good proportion of it. That begs questions about what realistically and practically are the other viable usages for a relatively sudden and still developing oversupply of traditional retail units in your typical high street environment?  It also begs the question, will Government, in tandem to some repurposing, now bite the bullet and start actively levelling the tax, business rate and other costs of doing business from whatever platform or from whatever physical location? Unless I am mistaken, this too has been “promised” in recent years.

Levelling the fixed cost base would undoubtedly do much to help bring some new and different forms of retail back into currently vacant retail spaces, reducing the negative impact of empty premises. Importantly it would allowing local authorities to focus on dealing with a then smaller number of the residual, harder to use or repurpose properties; properties that they and the public or third sector are probably best placed to tackle, on a not for profit or non-commercial basis, with the very limited funding they now have available for non-statutory, good to do but hard to resource public good projects.

2. It would also seem that HMG are set on tackling holiday home and vacant property issues in England by two parallel and complimentary changes.  These proposals fall well short of the same changes recently announced by the Welsh Government for introduction in 2023.  It is proposed that owners of holiday home in England will now have to meet a minimum 70 days let per year threshold and a 140-day available to rent criteria, whilst demonstrating some genuine effort let the property commercially before it can qualify as a business, be rated as such and in many cases then qualify for 100% small business rate relief.  The hope I assume is that this will stop home owners falsely claiming the business rate benefits and, in many cases, paying neither Council tax or business rates on what is effectively a second home. 

How the regulation is to be policed by whom and with what recourse is, as ever, an interesting area for discussion.  It is pity that there are apparently no proposals to use this opportunity to harmonise the different furnished holiday letting criteria with holiday home criteria. It is complex area revolving around whether the property is owned and treated for taxation as a business or as an investment. The fact that two outwardly similarly end usages for a property (putting up holiday makers) are governed by different criteria for the length of that usage, just makes a complex area more complicated and less easily policed. 

I am guessing that the hope is that anyone who isn’t genuinely running a holiday accommodation business will choose to revert to paying Council tax to reduce the hassle or avoid any risk of being caught out claiming a benefit for which they are unentitled. I hesitate to mention it but the still awaited DCMS consultation on proposals for statutory registration in England has a part to play here.  It beggars’ belief that in the digital age there is still no central point of reference for who provides what commercial holiday accommodation where, how or in what circumstances in England, let alone any practical means of checking whether it is then fit and safe for that purpose.

A preferably robust mandatory registration scheme seems like a good starting point for properly regulated commercial accommodation provision.  When something big goes horribly wrong somewhere in the accommodation chain as it inevitably will do, there are going to some very big questions to be asked. By rights these should fall to HMG who now are demonstrably aware of but evidenced by their continuing lack of action, demonstrably seemingly unconcerned about the woeful failings in some of the unregulated provision of UK of accommodation in England as a whole.

In parallel to a cracking down on the criteria for registration for business rates, it is proposed that Councils in England will be given discretionary powers to charge up to 100% additional Council tax charges on holiday home and implement existing powers to charge up to 300% charges on any genuinely vacant properties, after only 12 months rather than 24 months, as is the case now.  Whether, as apparently intended, these moves will free up more housing for local usage (purchase or rental) encourage more second and holiday home owners to at least put their properties to fuller use to generate money into the local economy through tourism, or simply help generate income for hard pressed local service provision, remains to be seen. For some the combined outcome of these two move will be that they go from paying nothing at all for local services to paying twice the going Council tax rate.

3. As with every Queen’s Speech one of hardest areas will be spotting what has been previously promised by Government but isn’t now going to be driven forward, at least not in this year’s legislative programme.  It has been suggested that one of a potential number of promised changes that hasn’t made it past the starting post is legislation on the distribution of tips automatically charged to, or willingly volunteered by customers within the hospitality industry. Last September the Government proposed that they would make it a legal requirement that all tips placed on bill or given went to the staff members: https://www.gov.uk/government/news/all-tips-to-go-to-staff-under-government-plans-to-enhance-rights-of-2-million-workers .

It has been said that Government either now don’t feel this is the right time to direct where this additional income should go in a period when many hospitality businesses are still struggling, that there is simply insufficient legislative time to push the necessary regulation through in this year, or that they believe that the proposed voluntary codes may prove to be sufficient on its own?  It will be interesting to see whether the proposals on the distribution of tips have indeed fallen before the first hurdle (for now?) and indeed to look back to see what other of the many proposals and promises made in the last year or more might have either been quietly dropped, delayed or amended beyond recognition since they were first aired. 

If nothing else this is a timely reminder to us all that there is a long, well-trodden path leading from headline and often deliberately headline grabbing initially announcements to legislation and critically enactment and implementation.  Not everything announced makes it all the way to the end of the path and that which does may not be as originally previewed. There nothing wrong with this, provided we don’t routinely mistake outline proposals for copper-bottomed promises or then make plans or adjust expectation on those promises, until we have seen the form they eventual take, if and when they are delivered on.

The degree to which administrations make apparent promises that they don’t then fully deliver on does change significantly over time, driven by a range of circumstances. Based on your own experiences of past policy announcements on all manner of things, you should be easily able to judge where you think we are in that ever changing cycle and therefore, the degree of credence you can safely give to any future policy headline announcements that are now being routinely made.

Britannia Hotels one to watch?

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If you are a destination with one or more of the 61 hotels in the Britannia Hotels group, or indeed a popular destination with major older hotel stock holdings, then the latest results and board statement from the group may be one to watch.  Britannia, which if the Which? annual consumer major hotel groups survey is anything to go by are arguably the UK’s least love hotel brand (worst performer for 9 years in a row) have recently posted results for the year ending 31 March 2021

These results have been picked up by local and regional media as they relate to local hotel holdings. I am not aware of any obvious national comment. Most of that coverage is superficial, some possibly even giving the impression that the results are for what should be the rather better 2021-22 year? The results for 2021-22 will not be posted until this time next year. However, the report while skating over 2021- 22, does make significant reference to expected performance in the current 2022-23 year and, critically I believe, reference to the board’s ongoing tactical and strategic plans for the immediate and longer-term future.

Perhaps not surprisingly given the period covered by the report, the group made a loss of c £9m against a profit for the year ending 31 March 2020 (i.e., mainly the pre pandemic 2019-20 year) of £10.2m. Turnover dropped 68% or c £82m from £120.4m to £38.3m. The average staff head count for the year fell by around 1,000 on the 2019-20 numbers of 2,740.  Of these 63 where in central management and office staff and the other 900 odd in frontline staff.

The accounts may not necessarily give a full fine grain picture? We know for example, that during this period (and again in late 2021-22) Britannia were particularly quick to act to reduce costs and, especially staff costs, by closing venues and reducing staff numbers, whilst other groups were perhaps more hesitant and subsequently able (willing?) to make greater use of furlough?  We are aware that Britannia were particularly active in using their hotels (and Pontins holiday park) for other covid-19 related accommodation purposes, in some case handing over the venues entirely to be staffed by Home Office and other provider’s contractors as part of their arrangements.

 How these measures may have positively or negatively affected the bottom line isn’t immediately clear from the headline figures, nor does it appear to be mentioned in the account’s supporting narrative comment. I would assume that they helped cushion the impacts? Having closed venue and let staff go in 2020 and then reopened for 2021 main season, Britannia were then able, with fewer restrictions and financial penalties again close hotels and let staff go almost overnight, in response to the late 2021 “plan B” reintroduction of some covid-19 restrictions. We will not know the net financial effect on Britannia’s 2021 – 22 year for some time. Reading between the lines of the board comments on the coming 2022-23 year, the group may not be expecting to have returned to profit during the year to 31 March 2022, yet to be reported, and are, like everyone else, facing some strong headwinds for 2022-23. 

More interesting for destinations that host Britannia hotels or those with large older hotel stock, who might in future become hosts, are the board’s comments on their strategy for 2022-23 and beyond. Among comments on tight control of cost, competitive pricing and the care and safety for both staff and customers is a potentially telling reference to investment: “Our priority continually remains to maintain occupancy levels and manage operating costs to exploit further investment in new properties”. I read that as a strategy of investment in further acquisitions, rather than a focus on investment in relatively recently acquisitions.  I might be wrong, or it could of course be a strategy to invest in both? If I am right, despite difficulties, Britannia are intent on expanding their holding either in existing, or for them, new destinations. Whether that is a good or a bad thing is for others to judge, dependant largely on local circumstances and the desire for a high-volume low-cost accommodation operator.

If you have reason to be interested in the workings of the Britannia group, I would recommend you to scan their Group Strategic Report for the period to 31 March 2021.  The meat of the report, which is worth reading in full, can be found on pages 2 and 3. The Companies House filing can be accessed: here

Various, mainly local media reports can be accessed by Googling Britannia Hotels financial results. Most are fairly superficial and major as much of the group’s performance in the Which? major hotels group survey than they do on the financial performance for 2020- 21.  Their relevance I think lies with their ability to stoke a generally poor local perception of Britannia’s local operations and to add to a wider negative national perception of the brand as a whole.  This I think may make destination managers’ ability to work closely with the group’s hotels, as they need to do, rather more difficult than it might otherwise be.  I can’t help thinking that group’s combined offer is of national significance and that Britannia have sufficient presence in a number of major popular destination to warrant tentative discussions around a combined strategy from those destinations, rather than the current apparently piecemeal approach?  I would welcome views.

Great British Rail Sale 19 April 27 May 22.

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You are hopefully aware that from 19 April over a million advanced, off-peak tickets are being offered at discounts of up to 50% on eligible journeys across many but not all routes for single journeys made between 25 April and 27 May 2022. Most but not all train operators are participation, some with slightly differing terms and conditions.

Since the public launch on 19th April the offer has been given some good one-off coverage in most mainstream national and some regional channels and is heavily promoted in the train operating company websites, social media channels and most (all?) ticket sales platform.  The stated aim of the national initiative, as I read it, is to encourage the return to rail travel.  On that basis it probably right to focus the promotion towards existing rail users and towards rail specific channels that those users are, or would previously be linked into, rather than trying to generate additional promotion through other associated routes to market, like destination marketing?

I was personally taken unaware by the announcement. Having got over my initial embarrassment about that on 19 April I have since struggled to find others in similar positions who were aware before the event. I am also now struggling to find any significant reference to the Great British Rail Sale in any specific non-rail tourism or destination based promotional activity, at any level. I now suspect the two are not unrelated? 

If I am right and the potential opportunity to piggyback on this offer hasn’t been taken, presumable because there was insufficient warning or knowledge of it, then we might be well advised to jointly evidence that and then make that known in the right places. In normal circumstance I would be concerned. However, following Great British Railways’ recent “industry consultation”, recommendations on the 5-10-30 year strategic direction for rail in the UK, and critically for tourism and leisure, the future priorities within that for different usages are being worked up, for presentation and consideration by HMG later in the year. It is therefore not unreasonable to suggest that future of UK rail and leisure rail travel’s part within it, is now at a critical juncture and will be for much of the rest of this year.

It might not happen but it would be a disaster, if for want of a little effort now, the tourism industry’s apparent lack of proactive engagement in a major national off-peak, essentially therefore leisure travel promotion, was somehow misconstrued, either by those formulating recommendations, or as importantly, by those who will soon consider and pronounce on them.  Once set, the strategy will have profound implications for the means and ease of travel (by any means) around the UK and by default the prospects for tourism in a rapidly changing environment for all forms of public and private transport. 

My premise is that had the UK tourism industry had a little more warning of an off-peak offer (albeit for a short should month period) some or all destinations would have considered using it as a tool to generate greater awareness of rail as a travel option and directly increase sales among existing and new leisure rail users.

The first stage is to ask as many of you as possible to confirm or deny that: you were or were not aware, that you have or have not promoted the availability of the offers? If you didn’t promote it why and/or what would have helped you do so? If timelines are a factor, then an indication of what realistic advance warning looks like would also be useful. In fairness to all, if you couldn’t or wouldn’t have been able to exploit this, or a similar offer in future, then please indicate that and why. In this way I will then have something more than just my instincts to act on.

Given that there is still just under a month for the offer to run it is conceivable that some destination may still have the opportunity to do something via social media and other more flexible, less time sensitive channels? If that is an opportunity you are already pursuing or will now (as a consequence of my note?) consider, then please let me know, as that would strength the case I will hope to make.

If my assessment is correct and I can evidence that we didn’t jointly know or know in enough time, then I will make sure that is sufficiently widely known.  I should stress that I am already aware that presenting this as a potential criticism of a very welcome initiative would be totally counterproductive. The intended approach would be: “great initiative, we fully understand why advanced warning couldn’t be given in the circumstance, however, just wanted to make it clear that given x to y warning, some/many/all destinations that are well-served by rail would in future jointly or separately add the following value”.

I am also viewing this as a welcome potential opportunity to reiterate to those that need to hear it, the critical importance of rail to leisure and tourism and mutual future opportunities for growth in both, if the rail strategy is correctly framed to foster it.

I look forward to receiving your comments.

UK Shared Prosperity Fund and “Multiply”.

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Details of the UK Shared Prosperity Fund (UKSPF), including the indicative amounts available to each “place” and the timetable for awards October 2022 to March 2025 have now been published (13 April 22).

UKSPF recognises that there are pockets of need everywhere and, therefore, every administrative area down to district authorities have been given access to funding on a non-competitive basis. That said there are of course broad based but relatively strict criteria that must be meet in an assessed, application process that runs from now to 1 August (formal submission window, 30 Jun 1 Aug 22) to gain full access the totals available to each place.

Mayoral Combined Authorities, (MCA) and Combined Authorities (CA) in England will act as lead for their constituent authorities (tables at the end of funding annexes show how their allocations are reached and presumably their indicative indicative share of the funding?). There are special arrangements for those authorities the process of moving to combined authority status. Arrangement for England, Scotland Wales and Northern Ireland are broadly similar and detailed in separate documents. In Wales for example there are 4 regional leads: North, Mid, South West/Swansea Bay and South East/Cardiff Capital Region.

There is a lot of detail, some of it open to interpretation, contained in the main documents and key confirmatory information scattered across a number of annexes and supporting documents. An initial trawl of this material suggests that there are, significant potential for capital and revenue investment into visitor economy related areas including: culture, tourism, leisure, public realm and sense of place. There is even specific mention of support for visitor promotion (including administration and destination management?). It will be down to each “place” to decide if and how that potential for “tourism” is fulfilled within a plethora of other competing demands.

There are references to a parallel funding scheme Multiply, aimed at improving functional numeracy in the UK. This funding will be channelled in England via MCA’s and second tier authorities. There are some obvious opportunities within this for tourism sectors.

The timescales are tight, the demand on internal and external professional expertise to produce several hundred detailed applications, concurrently in a 4/5-month window will be a challenge. The benefits for tourism in general and for tourism in individual destination will, as ever, depend largely on the priority that is already accorded to tourism in any particular authority, MCA or CA and, critically, the quality of the schemes or projects and the cases for a tourism component made in the coming few weeks and couple of months at best. Minds, if not already made up, at local, MCA or CA levels will need to be very soon, if the application process and timetables are to be met.

I will continue to delve into the detail and if there is anything of significant to report, let you know. Please let me know if you are or become aware of any issues arising, or there is any central research or investigation required to assist you as a group. If destination managers would value an opportunity to discuss and/or share local plans in the next month or so in order to inform or help influence local debate and allocations, then I will happy to arrange it.

UK Shared Prosperity Fund: prospectus – GOV.UK (www.gov.uk)

Killing with kindness or for commercial gain?

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While waiting for the publication of the consultation on statutory registration of accommodation provision in England, I thought I would share with colleagues my most recent exposure to the absurdities and contradictions of the current enforcement of accommodation related regulation within in England.

I don’t want to pre judge the long awaited DCMS consultation. However, we are anticipating a, “here’s what we think the option, or options should be” appropriate. We are also expecting whatever is proposed to lean towards a very light touch, industry guided (i.e., providers), low-cost option. Given what we are learning much more over time about some of the longer-term consequences of well-intended, light touch regulation, there is perhaps a real danger it may turn out to be a bit of an unwelcome faff for the majority of good operators and utterly ineffectual against the small but dangerous and highly damaging minority of cowboys, rogues and rotter’s.

Having waited over 50 years for the original 1969 provision to be enacted, 60 since we have our first record of it being proposed, a damp squid of a solution now would be a totally wasted opportunity. Especially if you accept that history clearly suggests that whatever is or isn’t adopted now, will not then be adjust or revisited for at least 10 years and probably much, much longer.

So, what else has just happened? HMG have recently decided that potential endangering, if not accidentally killing refugees fleeing conflict Ukraine in the well-intended rush of human kindness to house as many as possible as quickly as possible can’t possibly be countenanced. Consequently, and quite rightly, all those wishing to offer either rooms or full properties under the Homes for Ukraine scheme are being advised on what the minimum standards they must achieve are and, critically, what mandatory safety provisions must be met including: current gas safe certification, smoke or fire alarms and CO monitors where appropriate.

Quite rightly in turn, local authorities, as the delivery bodies in England, are mandated and critically enabled, via the provision of the basic information on who what and where, to check that these minimum safety standards are being reached, before they accept owners into the scheme. Delays in obtaining gas safe certificates and/or a reluctance on the part of some potential hosts to pay for the necessary inspections and alarms etc., is causing additional delays. In some quarters it is also generating some fairly predictable disquiet about, “red tape” and “jobsworth officialdom” arguably from among those who would be equally vocal about any failures to enforce and who would probably be first in line to demand the take away the job of the “jobsworth”.

Meanwhile, the self-same properties can be readily let commercially and internationally promoted as holiday accommodation to a Ukrainian or indeed any other visitors with nothing more arduous than the completion of a simple self-assessment, online form. Failure to declare a critical piece of safety information will at worst, dependant on the platform used, result in the icon for that item being crossed through on the list of facilities. The platforms promoting this accommodation take absolutely no responsibility or will not accept any liability for the owner’s failure to meet any mandated legal, regulatory or other standard. There is currently also no practical way for local authorities or other statutory bodies, like the fire service, to identifying where properties are being commercially let or by whom on such platforms, unless they care to individually book them to obtain their address detail. Therefore regulators and enforcement agencies have no realistic means of checking that matters like planning regulations, health, food hygiene, fire, gas or electrical safety standards are being adequately addressed.

It seems to me to be a little absurd that at this point in time apparently one part of HMG with a responsibility for housing can in an international crisis, readily and rightly recognise that potentially taking any risk that might effectively “kill with kindness” can’t possibly be countenanced. While another with the longstanding responsibility for tourism continues to procrastinate about allowing many of the same risks but on a vastly larger scale and all in the name of commercial gain and the perceived need to promote new disruptive technologies, regardless of the increasingly obvious and real risk this approach fosters.

Surely it is well past time to protect the lives and wellbeing of consumers, paying or otherwise, and in doing so protect the reputation of all parts the UK tourism accommodation industry? I look forward to seeing DCMS’s hopefully robust and practical proposals to achieve just that.

Quick updates: marketing job vacancy, new ONS C-19 attitudes data, destination manager’s meetings and/or Parliamentary Reception.

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Appointments. Visit Isle of Wight seek a marketing manager. See Job vacancy page Britishdestinations.net or go direct to the page. Not for you? Then please consider circulating to colleagues and contacts: https://britishdestinations.net/jobs-vacancies/marketing-manager-visit-isle-of-wight-ft-salary-negotiable-closing-8-april/

Latest C-19 Survey. ONS have just published their latest UK public attitudes survey. The first paragraph gives some of the background and a flavour of its content. The full online report contains a number of potentially useful attitudinal indicators, particularly those by age and gender, which may help inform your understand of the possible implications or residual public concerns for your key markets and/or shape your marketing responses to them:

“In February 2022, almost a third of people in Great Britain (32%) felt it would take more than a year for life to return to normal following the coronavirus (COVID-19) pandemic. This is almost three times higher than at the start of the pandemic (11% between 27 March and 6 April 2020). According to Opinions and Lifestyle Survey (OPN) data from between 16 and 27 February 2022, more than 1 in 10 people (12%) thought life would never return to normal, and 9% felt their life had already returned to normal”.

Coronavirus (COVID-19): disabled people are more likely to feel life will never return to normal – Office for National Statistics (ons.gov.uk)

Managers meeting and Parliamentary Reception. My note to lead contacts on the Parliamentary Reception 3 – 5 pm 24 March, House of Commons and the calendar request for either in person or Teams attendance at a Destination Managers meeting 12 – 2 pm being held at the VB/VE Offices may have caused confusion. It may have read as though it was entirely about physical attendance in London?

For clarity, if you wish to attend the Destination meeting either in-person or online please let me know, so I can either warn off VB for access and/or know who I am expecting online. The agenda for our first hybrid meeting covering the many strategic issue in play, to follow shortly.

If you wish to attend the reception, either in addition to the Destination Manager’s meeting, or on its own, let me know, if you haven’t already done so. I can then send you the invitation and inform the Tourism Alliance who are running the event and coordinating attendance. No invitation and name on the attendance list, not entry to the House of Commons.

Where are the winds blowing?

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At our last Teams Destination Managers’ meeting in the situation update I was musing about the extraordinary, indeed unprecedented mix of internal and external national factors that were making predicting where the winds might blow tourism and the visitor economy almost anyone’s guess.  Principle among these were Covid-19, the ramifications of “partygate” on the nature and direction of future critical policy decision making and of course potential international tensions at a level not seen since the end of the Cold War.  Seven short weeks later those tensions have become an international crisis of a proportion not seen in any of our lifetimes, with God forbid, significant potential for it yet to become something far worse. 

Assuming/praying that sense prevails, it is too early to say what will happen now in Eastern Europe but not too early to predict with a degree of certain a few headlines that could or should now influence contingency planning for the coming season and beyond.  None of this is particular cleaver stuff and I apologise if it sounds like teaching Granny….

Firstly, although, critical factors like Covid and Partygate’s influence on policy direction may have paled into seemingly insignificance, they have not necessarily gone away. Regardless of the course of the war in Ukraine, Covid has the potential nationally and internationally to continue to impact. That may be mildly, probably during next winter or it may mutate and come back with a vengeance, at any time. We can but hope it is the former. Partygate may have been forgotten by many but is still running and may or may not continue to have subtle or less subtle effects on the direction of policy decision making now or in the future. Ultimately it still has plenty of potential to influence the choice of governing party leader and, thus, potentially on the delivery of key policies yet to be fully delivered and others promised and under development.   This simply maintains if not builds on the current hyper levels of strategic uncertainty.

You don’t have to be genius to see the war in Ukraine is unlikely to come to a benign conclusion anytime soon. Nor to realise that if and when the war ends, whatever the outcome the massive array of negative worldwide impacts won’t also end overnight or indeed anytime soon thereafter. Issue like fuel, energy, staple food stuffs and critical material shortages and consequential higher prices and inflationary pressures will continue throughout 2022 and in all likelihood well beyond. An already fragile UK and world economy is set for a long and dumpy ride.

Again. it is too early to be specific about but not too early to say with some clarity what the known tourism effects of pressures on disposable income are, what historically high fuel prices do to travel patterns, or what instability (war or terrorism) even vaguely thought to be in “Europe” does to key international markets. The only unknowns are how when these things unusually take place concurrently they interact with each other and how, if at all, the change the core assumptions. Those assumptions include:

  • Fewer, shorter holidays, in particularly fewer short breaks, treats and days out.
  • Trading down, less expensive options, some shift from long to short, short to days out, days out to shorter more local activities etc.
  • The “big holiday” may be sacrosanct for some.
  • Lower income and higher committed incomes households, including young families generally most disadvantaged, as they already had less disposable income in the first instance.
  • Some socio-economic groups may drop out of the holiday market entirely, if one or more of these groups are a mainstay, the impacts are far more acute.
  • Shorter journey will be undertaken, potential benefiting destination in or close to major population centres and generally disadvantaging those more remote destinations including some popular coastal and inland destinations towns and more remote rural destination areas.
  • Pressure on pre booked packages at pre crisis prices, including in and outbound international flights and cruises and domestic and international coach-based activities. 
  • Previous pre pandemic cost hypes have historically precipitated cancellations, surcharges and in some cases business and operator failures.
  • Increase in the price of domestic and in particular international packages yet to be sold. The greater the travel element the greater the likely increases in price.
  • Overnight switching off of some/many (already shredded) international markets, most notable the USA which is particularly sensitive to security concerns.
  • Added concern and uncertainty for some outbound international travel. Some possibly marked redirection of business as far away from Eastern Europe destinations as possible. Notwithstanding that long haul will be proportionately more expensive than short haul.
  • Additional energy, ingredients and other cost pressures on attractions, accommodation and F&B and the absorb or pass on dilemma, particularly, in light of other mainly negative influences outlined above.

The uncertainties created by the Ukraine crisis on their own are significant and if not managed will be damaging to an already fragile domestic tourism industry, that is in any case still under threat from other external influences.  It may seem crass to even be considering what the impacts of a still developing international crisis may have on this coming season. Experience shows that not to do so as soon as practical in advance of the start of the fixed main season, can and will make a bad situation far worse for our industry.  You can’t change the situation but you can take action to prepare and mitigate against the worst predictable effects. I would welcome any thoughts on obvious or less obvious headline implications I may have missed and any thoughts on any new or amended asks of Government that result from them.

Meanwhile, assuming Government policy around strategies like levelling up are no derailed by the ongoing political machinations, I am becoming increasingly convinced that there has or at least there is going to be a seismic shift in importance of local authority engagement in tourism and the visitor economy.  Future funding for all in England now seems set to flow increasingly via combined authority, mayoral/governor arrangements.  Just as not all LEPs saw the relative importance of tourism, there is a real danger that not all combined authorities will do so, although, thankfully, most of the existing tranche do. If all future capital funding comes via the combined body and that body doesn’t prioritise tourism or tourism development, then where does that leave the visitor economy?

Each combined authority decides its own structures and own priorities but by their nature each individual authority within the combined grouping will need to agree or at least accept tourisms importance, if in turn the combined authority is to agree and give it due weight.  This is not to say local authorities need to deliver tourism services to understand it or support it. But it is to say those authorities still directly engaged are probably at an advantage and those that are not need to be warmly embraced by those that do now deliver tourism services or tourism and tourism development will no longer have direct access to centrally run and distributed funding pots.

This one of a number of topics to be discussed at our next hybrid destination manager, midday to 2pm on 24th March at the VB/VE offices London, prior to the Tourism Industry’s Annual Parliamentary Reception 3pm to 5pm.  If you wish to attend both in person or the manager’s meeting online, please contact me ASAP. The full agenda will follow next week.

Welcome to Yorkshire in administration

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Colleagues may wish to note that earlier this week Welcome to Yorkshire (WtY), the County wide destination marketing body, originally formed in 2009 by the Yorkshire Regional Development Agency (Yorkshire Forward) to replace the former Yorkshire Tourist Board, went into administration. Apparently, this was precipitated by the withdrawal of substantial annual, joint local authority financial support for the private company.

Media reports suggest that the Councils in Yorkshire may now pursue the formation of a new but differently structured and funded organisation to carry out what is effectively regional (large County) level generic destination marketing and promotion, with some limited development and management functions for specific large pan-Yorkshire events and activities (I.E. Tour de Yorkshire). Clearly the administrators will also have a view and a potentially significant influence on the future of the company, its assets and any intellectual property.  

Some but not necessarily all of the Councils involved as partners with WtY, have retained their own public/private sector destination management functions and destination management and marketing organisations throughout. Usually at a scale commensurate with the relative socio-economic importance of tourism and the visitor economy to their own localities.  Notable examples, in our membership, include Scarborough BC (the Whitby to Filey coast and a large part of the North Yorkshire Moors) and the East Riding of Yorkshire Council (including Bridlington, major rural coast assets, Beverly and a significant rural tourism area).

As far as we are aware, Welcome to Yorkshire is only the second major “DMO” to go into administration during the period of the pandemic.  Visit Cambridge, now reformed by a partnership of the Cambridge BID, City Council and University, being the other.  However, many destination management and destination marketing organisations, both those principally public or private sector based and/or funded, are known to remain vulnerable. This is due in large part to a combination of pandemic generated pressure on commercial revenues, inherent pre-existing tourism market failure, freeloader issues and austerity and/or doctrinal driven pressures on public funding support for non-statuary tourism services, whether those services are now largely or total internally or externally delivered. (More on market failure issues at: https://britishdestinations.net/strategies-and-policies/tourism-industry-strategies-policies/market-failure-in-tourism/ ).

The failure of WtY, previously held up by some, particularly outside of Yorkshire, as an icon for the primacy of private sector models in the world of “DMOs” brings the need for a successful outcome of the English DMO review recommendations (still awaited) and a potentially reinvigorated debate about the central role of local government in supporting, if not delivering some or all key destination management functions, back into very stark focus.

The old system in England, if the myriad of by necessity locally evolved solutions and compromises can be called “a system”, is at best creaking, if not somewhat broken.  That doesn’t mean tourism isn’t being managed properly anywhere on the ground; it is in many places.  It is just that it probably could be managed far better, everywhere and done so in England more efficiently and with a far greater degree of clarity and a unity of purpose that flowed more easily down from the national level and was more constantly informed and updated upwards from the local level.

Depending on very different local circumstances now experienced, there is room and, indeed, a well-established need for both private and public sector led models (Tourism/Destination BIDs, third sector and hybrid arrangement included), very often working on different aspects of the management or marketing tasks, at different appropriate levels and preferably doing so in calibration. However, where tourism really matters, there is no room for local government, at whatever level, simply to disengage entirely in the mistaken belief that it is someone else responsibility to manage a critical local social and economic driver, or that destination marketing, albeit important, is the same thing as holistic destination management.

Marketing is a subset of management and something that can only be done well when you have successfully managed something, in this case urban places, rural areas or combinations of both, into a recognisable, well-ordered state, worthy of wider geographical, coherently structured and consistently branded, promotion. Something a mass of individual business acting alone can’t or will not do (the essence of the market failure in tourism).

Above all it is now time for the Westminster Government to acknowledge that tourism (destination) management and place management are often two sides of the same coin and unavoidably so wherever people chose to visit in any significant number.  Local Authorities have a duty to managed and develop their administrative areas. If that area happens to be, or include a significant destination then by default they must manage tourism, or risk losing control and influence on, among other things: quality of place, wellbeing and the local economy.

Uniquely, tourism as an industry is essential about the movement of people and people in any number have significant impacts on places, regardless of whether they are residents or visitors. Acknowledgement of this would at the very least, start firming up some common understanding of who’s job it is to physically manage a recognised destination, in what circumstance; albeit that it might not answer the critical question of, “how and by whom is it then to be paid for”.

I could suggest that successive Westminster Governments have perhaps dodged this issue on the grounds that if it is a publics role then it might be reasonably argued that some or all of it should be funded from the public purse? Personally, I don’t actually care from where or how it is funded, just as long as it is and that its funding streams are both adequate and robust enough to survive ebbs and flows of domestic and international tourism demand.

As an absolute minimum I think we should now all be using the recent example of Welcome to Yorkshire, as timely reminder to anyone who will listen that all is still far from well in the world of DMOs, however you might choose to define what a “DMO” is or what a “DMO” does, where and for whom.  The key message being that continuing to do nothing about the often-parlous state of destination management in England isn’t a sustainable option.

Other Home Nations have tended to taken a more structured and a more publicly minded approach to tourism support and destination management. That doesn’t necessarily mean that aspirations for good quality destination management is then always matched by the public resources available and allocated to it. Colleagues working in destination management outside England can and do face their own versions of the, who’s role and how funded dilemma. Arguable that dilemma can on occasion be adversely influence by the example and misconceptions about how things are being done more, “successfully”, elsewhere in the UK.

There are a number of short regional news report on the demise of WtY that are worth reading for information and background awareness.  A typical example is at:  https://www.bbc.co.uk/news/uk-england-york-north-yorkshire-60574461

Colleagues seek information on local structural solutions

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Colleagues in Scarborough are seeking information on where cultural, arts, festivals and events sit within other destination’s structures, in order to help inform the ongoing North Yorkshire Local Government Review. The specific questions and answers sought are detailed on the BritishDestinations.net “Forum, ask questions get answers” page or go directly to that page at: https://britishdestinations.net/need-an-answer/culture-arts-festivals-and-events-where-do-they-sit-within-existing-organisational-structures/

Any assistance you are able to offer will be gratefully received..

Updates and new items

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1. Online Sales Tax. “The UK government has today (25 February 2022) published an early-stage consultation, exploring the arguments for and against an Online Sales Tax (OST)”. The consultation which closes 20 May is potentially the first step towards an online sales tax, equally it could kick the issue off into the long grass or kill the idea off in its entirety. The announcement makes it clear that the rational is to “address tax imbalance reported in the retail sector”. In the consultation itself there are references that suggests that such a tax charged at 1 or 2%, as previewed in last Autumns spending review, could raise sufficient funding to reduce business rates on bricks and mortar based retail, not eliminate them, which is critical to understanding the direction of both the thought process and of potential travel. The consultation has been added to the consultation page of Britishdestiantions.net: https://britishdestinations.net/consultation-responses/open-consultations/uk-government-to-assess-whether-online-sales-tax-could-address-tax-imbalance-reported-by-retail-sector-closes-20-may-22/

2. Covid-19 non-damage denial of access insurance cover. Last week Axa lost a potentially landmark case in the High Court against the hospitality group Corbin and King. The case follows on from the 2020 finds by the City Regulator in large part in favour of the Financial Conduct Authority’s arguments made on behalf of policy holders, originally denied full non-damage denial of access insurance cover payments. The 2020 findings left considerable doubt over many cases, including that of Corbin in King.

In essence Axa, argued that their liability was limited to a single claim £250k over the period of the Covid-19 pandemic and only one claim of up to that value for the groups rather than up to £250k for each of their 9 London-based premises. Axa are “carefully considering” the finding. A specific settlement for Corbin and King will follow from the Courts. However, depending on the wording of policies and the interpretation previously placed on these, the finding may (will) have significant implications for other insurers and for other groups denied sequential and/or multiple claims across their operation. It isn’t going to help single businesses but it may have implications for micro and SME with more than one outlet (?) and presumably on a number of national groups and chains, some sadly no longer operating. It will also doubtless be reflected in future business insurance costs, potentially regardless of the cover previously held or the nature of that being sought in future See more on this from FT at:

https://britishdestinations.net/consultation-responses/open-consultations/uk-government-to-assess-whether-online-sales-tax-could-address-tax-imbalance-reported-by-retail-sector-closes-20-may-22/

3. ClearSights on recovery. The February issue of the BVA-BRDC ClearSights on Covid-19 & recovery has now been published and is available to members via the Britishdestinaton.net, C19 research page. This edition paints a more optimistic picture than we have seen for some time: https://britishdestinations.net/c19-research/ .

4. VAT infographic. The Tourism Alliance of which we are members and a number of the major industry sector trade bodies have produced a one-page infographic setting out the key arguments for retaining VAT on tourism services at 12.5%. I have added the infographic to the research page containing the summary and full-page links which were circulated earlier in February.

Although there are still no direct indictors to suggest that the argument may be accepted before the VAT level returns to 20% at the end of March and a good few indirect, indicator that it is very unlikely, it may well still be useful to circulate the infographic to partners businesses and others (MPs etc.?) with or without the expectation management caveat that campaign’s aim is to: either retain the 12.5% VAT level, or failing that, to regain it at the earliest opportunity. Links to the two reports and infographic can be found at: https://britishdestinations.net/research-and-statistics/

Meanwhile here what it has to say: