Take tourism seriously and generate serious returns
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Take tourism seriously and generate serious returns

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Water Babies
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Last month, Kentucky Fried Chicken announced it would create 9,000 new jobs in the next five years at an investment cost of £150m; Subway made a similar announcement, saying it was creating 7,000 new jobs; a further 1,000 jobs will be created by McDonald's and Domino's Pizza announced 1,500 new posts.

This good news was significantly underplayed by commentators. Are they real jobs, they asked? The answer is: yes they are. They are jobs, both full time and part time, that people want; they are jobs that can fit into any work/life balance pattern. And they are management and supervisory positions as well as craft and unskilled jobs. So what's wrong with them? Nothing. Yet the good news was treated as if it was bad news.

At a time when unemployment is now almost two million - its highest level for 12 years - and with forecasts that it will reach three million by 2010, the hospitality and tourism industry continues to invest in its future. With some additional government help, this investment could yield even more startling results.

The tourism industry has been investing over £5bn a year in each of the last five years and has opened well over 1,000 new hotels with many new restaurants and visitor attractions.

It is an industry that is labour intensive, employing more than two million workers who have jobs at all levels, throughout the country, that offer great opportunities for the talented. The industry continues to prove that it has the capacity to grow. But the industry could do even better with greater understanding by government of the value of tourism to the UK economy.

For example, there is no doubt that the recession is biting. While jobs are being created, others are being cut back. A 10 per cent cut in tourism employment would put 200,000 people out of work. Can this be avoided? Yes. A recent study suggests that the marginal cost of a job in the UK tourism industry is approximately £45,000 and that retaining 140,000 people in the industry requires the generation of £6.3bn in tourism revenue. Return on Investment modelling by VisitBritain, shows that £6.3bn can be generated through the expenditure of £210m on marketing Britain as a destination.

Of course, if overseas visitors (or domestic visitors staying in the UK) spent £6.3bn it would generate around £1bn in additional income for the government from VAT, petrol and alcohol duty which it would otherwise forego - a return that would be achieved within a year of the expenditure.

It is ironic that an investment of just £210m by the UK government could protect the same number of jobs as it is costing the French government £6bn to protect its car workers. And it would generate almost five times the level of investment in VAT and duty for the government within a single year.

Yet the government has actually cut VisitBritain's funding by 18 per cent in the run-up to 2012, abolished the Hotel Buildings Allowance and cut back other capital allowances. It should take tourism more seriously. If it did, it would get even more serious returns.

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Last month, Kentucky Fried Chicken announced it would create 9,000 new jobs in the next five years at an investment cost of £150m; Subway made a similar announcement, saying it was creating 7,000 new jobs; a further 1,000 jobs will be created by McDonald's and Domino's Pizza announced 1,500 new posts.
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