ACTION ON

TOURISM

THE CONSERVATIVES WILL:

Raise the profile and status of tourism

within Government and within the

Department of Culture Media and Sport

Give greater powers and responsibilities

to re-vamped Regional Tourist Boards

(RTBs)

Extend VisitBritain’s remit to include the

function of marketing England

internationally through the England

Marketing Advisory Board (EMAB)

Restructure EMAB to co-ordinate and

deliver tourism policy for England

Allocate an additional £10million of grant

aid annually to VisitBritain

Promoted and published by Gavin Barwell on behalf of The Conservative Party both of 25 Victoria Street, London SW1H 0DL

EXECUTIVE SUMMARY

The Conservative Party will :

• Raise the profile and status of tourism

within government and within the

Department of Culture Media and Sport.

This will involve a review of the role of

the Minister for Tourism and the

possible inclusion of “Tourism” in any

departmental name changes.

• Give greater powers and responsibilities

to completely re-structured Regional

Tourist Boards (RTBs) following the

proposed changes to Regional

Development Agencies. RTBs will apply

for funding to the England Marketing

Advisory Board (EMAB) (part of

VisitBritain) who will make funding

recommendations to the Department of

Culture, Media and Sport. Total

resources allocated to the RTBs will

replicate those currently going to the

RDAs.

• Extend VisitBritain’s remit to include the

function of marketing England

internationally through EMAB to redress

the current imbalance that England

experiences compared to Scotland and

Wales. Also return powers, similar to

those enjoyed by the old English Tourist

Board, over policy determination and

implementation, to a restructured

EMAB.

• Allocate an additional £10million of grant

aid annually, initially for 3 years, to

VisitBritain, conditional on levering- in

matched funding from the tourism sector

on a 1 for 2 basis. This should produce

£15 million p.a. in increased investment

which would significantly aid VisitBritain in

achieving its overall aims and would help

to kick-start its new function (through

EMAB) of marketing England

internationally.

• Support “People1st” Sector Skills Council

but continue to explore other ways that

skills’ shortages can be addressed. IT

training is a top Conservative priority,

especially for those running and working

in small-medium sized tourism

enterprises.

• Consider carefully the recommendations

made by the Mayoral Commission into the

viability of an International Convention

Centre in London and work closely with

the Mayor of London to ensure that the

most cost-effective outcome for British

tourism is obtained.

• Ensure the 75% participation rate target in

National Quality Assurance Schemes for

accommodation is met by 2008.

• Implement the recommendations of the

Tourism Statistics Improvement Initiative

(TSII) and continue to encourage

research into the potential of Tourism

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Satellite Accounting to ensure the

accuracy and quality of tourism

statistics.

• Disband the Big Lottery Fund and return

National Lottery funding to its original

purpose; as an addition to, not as a

replacement for, government spending.

This would mean greater funding for the

arts, sports and heritage.

• Encourage and support the

development and expansion of business

tourism.

• Deregulate wherever possible and

monitor the potential impact of proposed

new regulations on the tourism sector,

particularly amongst SME’s.

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THE POLITICS OF TOURISM

There is a prevailing view in the tourism sector

that government has little interest in the industry

and places it very low on the list of political

priorities. This impression is not

dispelled by the lack of resources going into

tourism from government; the lower than

inflationary grant increases from DCMS; the

tinkering with perfectly adequate

organisational structures, and the competing

and sometimes conflicting

responsibilities of the Minister for Tourism.

A Conservative government will raise the profile

and status of tourism within

Department and government and strengthen the

role and importance of the Minister for Tourism.

TOURISM AND THE ECONOMY

Tourism is a growing industry throughout the

world and it also makes a major contribution to

the UK economy. In 2003 it was worth

£74.2billion, employed 2.2million people (7.7%

of total British workforce) and accounted for

approximately 4.5% of the UK’s GDP.

Domestic tourists in 2003 were estimated to

have spent over £59.6bn whilst the 24.7m

overseas visitors spent £11.9bn. The countries

that provided the most inbound tourists to Britain

were, in descending order of importance, the

USA, France, Germany, the Republic of Ireland

and the Netherlands and Britain ranks sixth in

the international tourism earnings league.

Tourism funding

Grant-in-aid from the Department of Culture,

Media and Sport (DCMS) to VisitBritain totalled

£45.9m in 2003-04 and the RDAs allocated an

additional £58.9m of DCMS grant specifically to

tourism. The English local authority net

expenditure on tourism was £102m (although this

was down from £109m the year before).

Balance of payments

However despite some growth on the domestic

scene, over the last decade there has been a

deteriorating balance of payments deficit in

tourism i.e. the difference between what Britons

spend abroad and what foreign visitors spend in

Britain. When the Labour Party came to power in

1997 this stood at -£4,687 but by 2003 it had risen

to -£16,695m, a staggering increase of more than

350%. This represents a very significant loss of

taxation income to the Treasury; a reduced

employment potential for the industry; and a

substantial loss of earnings and therefore

investment for tourism in the UK.

It makes sense for Government to involve itself in

helping to redress this growing imbalance.

Tourism is obviously highly susceptible to external

factors and since 2001 it has suffered a series of

setbacks, affecting particularly the inbound tourist

market e.g. the Foot and Mouth outbreak, SARS,

the Iraq war, and the continual threat of terrorist

attacks. Despite those setbacks the UK tourist

industry has responded positively and the

contribution of VisitBritain has been particularly

significant. However the Conservative party

believes that given the quite outstanding potential

of this country’s tourism product that much more

should have been done and can be done in the

future. A Conservative Government coming into

office would begin to implement a 14 point-plan to

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assist the Tourism industry achieve its full

potential.

THE 12 POINT PLAN

1. The funding of tourism in England

Tourism strategies for England are currently

developed by the eight Regional Development

Agencies (RDAs) and then delivered in the

regions by Regional Tourist Boards (RTBs) and

other designated partners. Funding from

Government departments (namely DCMS and

DTI) is given to the RDAs and then distributed

by them to the relevant delivery bodies.

The Conservative party believes in small

government and has pledged to severely curtail

the role of the RDAs, thereby reducing

unnecessary bureaucracy and cutting costs.

This manifesto commitment would completely

alter the present tourism funding structure since

RDAs would no longer have a primary tourism

remit. It is therefore proposed that the RTBs (in

a newly re-constituted structure with additional

powers) would compete for funding through bids

made to the England Marketing Advisory Board

(EMAB).This too would have extended powers

and a greater coordinating role across the whole

tourism spectrum, similar to those enjoyed by

the old English Tourist Board. Any such bids

would be assessed by EMAB, in line with its

tourism policy and objectives for England, and

they in turn would make funding

recommendations to the DCMS. The

Department would then distribute funding

directly to the RTBs. The RTBs would evolve to

become both strategic and delivery vehicles

whilst the role of VisitBritain would expand to

include this assessment and co-ordinating

function on the part of EMAB. Current funding

levels to RTBs through the RDAs would be

protected in total, subject to some redistribution

and annual inflationary uplifts.

Such a change in structure would be beneficial to

the tourism industry on a range of fronts. Firstly

RDAs are not tourism-specific agencies; indeed

developing tourism strategy is just one small part

of their wider, regional role. By giving greater

power and responsibility to both the RTBs and

EMAB, the industry would benefit from a set of

agencies established purely to deal with tourism

and operated by staff with a knowledge of, and

experience in, the tourism industry. Secondly,

having both strategy and delivery coming from a

coordinated structure would allow greater

responsiveness and efficiency. There is also a

perception that the current system is too rigid in

terms of cross-regional co-operation. The RDAs

are restricted to activities that affect their region

but this isolationist approach is not necessarily

suited to the nature of the tourism industry. The

Conservative party recognises this and anticipates

regions working together for mutual benefit. Often

in the tourism industry it is not ideal to market a

single region but rather to market particular

projects, themes or destinations and in such

instances several RTBs may collaborate on a

single bid and/or collaborate with Destination

Management Organisations and local authorities.

Recommendations by EMAB will be informed on

the merits of the development proposal and not

just on a region’s funding entitlement. We believe

that such a policy will improve tourist bodies’

access to funding and in turn see an improved

quality product.

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2. Marketing Functions

The main tourism marketing body in Britain is

VisitBritain which was established in April 2003

after the merging of the British Tourism Authority

and the English Tourism Council. It is a non-

departmental public body funded by DCMS and

essentially has two functions; to market Britain

internationally and to market England

domestically in Britain.

Tourism is a devolved policy area and as such

Scotland and Wales market themselves through

VisitScotland and the Welsh Tourist Board.

Although the Conservative party recognise the

efficiency gains to be made from the dual role of

VisitBritain it is felt that England is

disadvantaged under the current system. There

is not in existence at present any means by

which England, outside of VisitBritain’s Britain-

marketing role, can be marketed to the

international market. In 2003/04 VisitBritain

received a total grant-in-aid contribution of

£45.9m from DCMS, £35.5m of which was

allocated to promoting Britain overseas and

£10.4m to promoting England within Britain.

By way of comparison and under devolved

powers VisitScotland (including EventScotland)

had a total budget of £34.5m and the Wales

Tourist Board had just over £22m.

Under the Conservative party’s policy the

marketing of England abroad would become a

third vital branch of VisitBritain’s remit using the

England Marketing Advisory Board (EMAB) and

money for this purpose would be ringfenced. By

keeping it under the umbrella organisation of

VisitBritain it would still benefit from the existing

synergies and economies of scale that come

with being part of a bigger organisation but the

marketing of England would move to a more

equitable financial commitment to marketing as

that currently enjoyed by Scotland and Wales.

In order to cement this new commitment to

tourism a Conservative government would

allocate an additional £10million annually, initially

for 3 years, to VisitBritain. This would help create

an expanded role for the England Marketing

Advisory Board to develop tourism in the regions

through the RTBs and local authorities and for the

marketing of England internationally.

The tourism industry makes a very significant

contribution to the UK’s economy and accounts

for approx 4.5% of GDP whilst employing approx

2.2m people. The National Audit Office reported

in November 2004 that the return on investment of

VisitBritain’s activity in marketing Britain abroad

had been 25:1 in 2003/04 and 14:1 in marketing

England domestically. This shows the highly

geared economic return from investing in tourism

and gives an idea of how much investment in

tourism could contribute to the British economy.

As the British manufacturing base continues to

decline a greater dependence on the service

sector is inevitable. The Conservative party

recognises the potential of the tourism industry to

help to replace the economic deficit left by

declining manufacturing.

3. Skills training and tourism

The Conservative Party welcomes the introduction

of People1st (Sector Skills Council for Hospitality,

Leisure, Travel and Tourism) although we are

critical of the time it took to set up. For too long

tourism has been seen as a low wage – low skill

sector and additional investment into marketing

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needs to be matched by investment in education

and training. Conservatives have long been

advocating a Skills Council and are confident of

the benefits the industry will derive as a result.

A Conservative Government would continue to

support People1st as a new venture but would

look to explore other ways that skills shortages

could be reduced. Other Sector Skills Councils

(such as those involved in leisure and transport)

which impinge on the tourism industry will be

competing for business and there is a case for a

degree of co-ordination between related

industries to ensure the training remains

focussed.

Conservatives believe it is the role not only of

government agencies but also of business and

local education providers to ensure that Britain

produces a skilled workforce for tourism that

equates with its strong cultural, historical and

destination tourism advantages. Policies in

relation to training will reflect this objective.

4. Business tourism

VisitBritain estimates that the business tourism

sector is worth around £16.7bn to the UK

economy (NAO VisitBritain report Nov 2004) and

annually around 7m people visit London for

business reasons, with almost half returning with

their families at a future date. Business visitors

account for nearly 25% of all visits to London but

account for nearer to 35% of all spending done

by tourists. These figures give some indication

of the importance of business tourism to the

British tourist industry and the Conservative

Party recognises the fact that Britain needs to

compete much more aggressively to attract

business visitors.

One hurdle facing British business tourism is the

current lack of an International Convention Centre

with a large enough capacity to host some of the

larger international conventions. Indeed it was

calculated that London loses £27m annually in

conference business because it does not have a

big enough venue (Grant Thornton international

consultants).

The Mayor of London has set up a Commission to

investigate the viability and costs of building and

operating such a convention centre which is due

to report in July 2005. The Conservative Party

strongly supports this initiative and will look

carefully and sympathetically at the

recommendations made by the Commission. The

lack of such a convention centre is a glaring

omission from the key list of marketable assets

not only for London, but the UK as a whole.

5. Accommodation Rating schemes

A new National Quality Assurance scheme has

been agreed in principle by the AA, the RAC,

VisitBritain, VisitScotland and the Welsh Tourist

Board. Such a scheme would involve the

aforementioned bodies using a common grading

system to rate accommodation, resulting in

greater consistency and clearer choices to the

consumer. This initial agreement is to be followed

by a period of consultation and it is expected to be

implemented, with inspections, from 2005 in self-

catering accommodation (run by VisitBritain,

VisitScotland or the WTB) and January 2006 in

hotels and B&Bs.

The Conservative Party welcomes the fact that

such a voluntary scheme has been agreed but

realises it will only work if participation in it

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increases from the present 43%. The Britten

report, which led to this agreement,

recommends that at least 75% of known

accommodation stock should be included in the

scheme by 2008. We acknowledge the

reasoning behind this target and agree its

validity. A Conservative government would

strongly support the industry in achieving this

goal. However, in the event of a poor take-up

and in the interests of driving up quality,

particularly at the bottom end, we would

investigate seriously the merits of a statutory

scheme.

6. E-tourism

The Conservative Party recognises that the

Internet is having a huge impact on the way

British people plan and book their holidays. The

potential role of the Internet in the tourism

industry is obviously one that needs positive

promotion and encouragement. Figures show

that travel, accommodation and/or holidays were

the most popular on-line purchases made by

British Internet shoppers and the most recent

figures available show that these were

purchased by 49% of those who shop on-line

(ONS).

This provides some indication of the potential

value of Internet marketing, especially with

regard to inbound tourism, and a Conservative

government would support VisitBritain in its

continued development of the Internet as an

effective marketing tool. However recent figures

also show that 34% of adults in Britain have

never used the Internet and of these 43% said

they were not likely to use it in the future.

Therefore any domestic Internet marketing should

constitute part of a wider, all-encompassing

marketing strategy. Indeed a similar pattern

emerges on the international scene. Whilst some

countries have higher Internet usage than the UK

(significantly long haul destinations including the

US and many emerging markets including China)

many European countries have fewer people with

Internet access (including France, Italy and

Spain). This again asserts the need for growth in

e-tourism but in partnership with, rather than as a

replacement of, other more conventional

marketing tools.

As well as supporting VisitBritain in the e-tourism

sector the Conservative party believes in

encouraging all tourism bodies, organisations and

businesses to make use of the Internet. It should

not just be the prerogative of the larger

organisations but universally applied at all levels

and in all circumstances within the tourism

industry. However a recent survey carried out by

VisitBritain showed that nearly one in three small

to medium sized tourist enterprises claim to have

no knowledge of how to use the Internet. A

Conservative government would therefore work

closely with People 1

st

to establish new training

opportunities to ensure all businesses could take

full advantage of the Internet and its associated

benefits.

The EnglandNet project (a cohesive internet

strategy for the tourism industry as a whole) has

recently been developed by VisitBritain. Whilst

this move is advantageous in some respects a

Conservative government would be keen to

ensure that VisitBritain did not have to subsidise

IT systems from marketing grant-in-aid.

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The two are separate functions and should be

kept suitably distinct, with adequate funds being

directed at the IT operations.

7. Tourism Statistical Data

The Conservative Party recognises that the

tourism industry is highly fragmented and

dispersed. However it does not believe this

accounts for the inconsistent standard in the

quality of statistical data currently available. If

economic forecasts and calculations are to have

any real worth then the raw data by which they

are arrived at needs to be as accurate as

possible.

We believe that the tourism industry deserves

an accounting system that reflects its nature as

a key economic contributor. Indeed, the

Government has made commitments, both

nationally and to the EU, to move to a basis

defined by specifications laid down by the UN

and World Tourism Organisation. The

Conservative party welcomed the establishment

of the Tourism Statistics Improvement Initiative

(TSII) by Government but is critical of the

continued absence of funding to implement

TSII’s main recommendations. This glaring

oversight would be rectified by an incoming

Conservative Government.

We are therefore committed to exploring the

potential of Tourism Satellite Accounting (TSA).

Whereas the present contribution of tourism to

the economy is based on statistics from

commonly regarded tourism sectors (for

instance accommodation and visitor attractions)

TSA incorporates the wider scope of the UN

endorsed definition of tourism, that it covers the

consumption of all goods and services by

visitors to an area. By accounting in such a way,

across so many more sectors and industries, the

affect of tourism on the national economy can be

calculated with greater ease and certainty. The

University of Cardiff is currently researching how

the UK could adopt a TSA system and a

Conservative Government would continue to

support research in this vital area.

8 Tourism and the National Lottery

The Conservatives are proud of Britain’s unique

historical and cultural heritage and recognise that

it is a vital attraction to inbound tourists, especially

in the international market. That is why the

Conservatives are committed to investing more

money into heritage sites, to protect our history

and ensure it can be enjoyed by generations to

come. The Labour Government has created the

Big Lottery Fund, a merger of the Community

Fund and the New Opportunities Fund. The

combined fund deals with bids made by the

charity and voluntary sectors and by health,

education and environmental projects. However

we believe that such an arrangement gives

government greater control over the distribution of

funds. This flies in the face of the original concept

of establishing the National lottery to provide

money for good causes. The National Lottery’s

role should be to provide additional funding, not

replace government spending.

In light of this a Conservative Government would

disband the Big Lottery Fund and return to the

original purpose of the National Lottery. We

would divide lottery receipts into four funding

categories; sport, arts, heritage and charitable

giving. Such a policy would yield greater incomes

to these four distribution groups, reduce

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bureaucracy and place them in charge of their

own budgets.

We are confident that an improvement in

National Lottery funding, particularly for sport,

heritage and the arts, would have huge

beneficial implications for the whole of British

tourism.

9. China and Approved Destination

Status

As of 21 January 2005 the UK was granted

Approved Destination Status (ADS) by China.

Chinese citizens are only allowed to travel to

countries that have agreed ADS status and even

then strict controls apply. Similarly only

countries with ADS status can market

themselves within China. The Conservative

Party recognise the future potential financial

benefits of the ADS. Indeed the market is

currently estimated to be worth £15bn and with

outbound tourism from China increasing at a

rapid rate the World Tourist Organisation expect

it to be worth over £100bn by 2020. If this is

proved accurate it would make China the 4

th

largest source of international travellers and a

huge single market.

Although we recognise the difficulties that arose

when negotiating the ADS (namely the Home

Office’s fear that Chinese nationals would fail to

return home) we are confident that this marks

the beginning of a fruitful new long-term

relationship. We will support VisitBritain as it

begins the task of marketing Britain to the

Chinese and will work closely with them to find

out where the Department of Culture, Media and

Sport can be of assistance.

10. London Olympic bid 2012

Judging from what happened in both Sydney and

Athens hosting an event as large as the Olympics

can be hugely beneficial to the host country’s

tourism industry. It provides extensive exposure

of the area, helps develop a strong brand image,

increases short-term demand during the games

themselves and encourages business tourism for

many years in the future. Work carried out in

order to win the Olympic bid, such as improving

transport infrastructure, is also a long-term

associated benefit. The Conservative Party fully

support the London 2012 bid and view it as

valuable opportunity to market not only London

but indeed the rest of Britain.

11. Tourism and local authorities

The Conservative party recognises and welcomes

the significant role played by local authorities in

promoting local and regional tourism and endorse

their continued representation on Regional Tourist

Boards.

Tourism is widely seen as being vital to the social

and economic well-being of most local

communities but without any statutory

responsibility and with increasing pressure on

resources, local authorities are giving it less

attention and reducing funding.

We believe that it is essential that all local

authorities should be required to determine their

own local “tourism policy”, (within the context of

course of any regional policy determined by the

RTB), to inform and direct other related planning,

transport and development policies.

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The proposed independent tourism strategic

review, to be set up by an incoming

Conservative Government, will be required to

consider the future role of local authorities and

any recommendations made in the report will be

considered very seriously indeed.

12. The regulatory burden

Regulation across all business sectors is

estimated to have cost UK businesses over £30

billion since 1997 and the Conservative party is

committed to de-regulation, to reduce this cost

burden, wherever possible. Regulation at the

current level stifles enterprise, reduces

competitiveness and ultimately impacts

negatively on economic growth.

The tourism industry, with its high proportion of

SMEs, is particularly vulnerable to over-

regulation and we will be particularly robust, in

government, to monitor new regulations to

minimise their impact on the tourism small

business sector.

On employment law, the Conservatives

categorically oppose the abolition of the 48 hour

opt-out currently part of the Working Hours

Directive. We do support the National Minimum

Wage and, indeed, the recently proposed

increase, but we are committed to ensuring any

future increases are sensibly set and in line with

average wage increases. On food standards,

we would streamline the FSA, removing the

advertising and public relations activities it

currently carries out and leaving an inspectorate

more suited to carrying out its primary task.