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Tourism is the great emerging industry of the 21st Century
Easter is over and the summer season is around the corner. So, what kind of season will it be?
Occupancy in London - one of the world's most successful tourism destinations - is forecast to drop this year by between 10-18 per cent and in the provinces by between eight-14 per cent. Corporate spend is being cut back. An increasing number of companies are turning to budget hotels to accommodate their corporate travellers; video conferencing is becoming increasingly popular and far less expensive.
There are other factors that impact on UK tourism.
1. We have a government that appears to ignore the benefits of tourism, so that financial incentives to the industry, such as the Hotel Buildings Allowance, have been withdrawn and other capital allowances have been reduced.
2. Streams of new government regulations in such areas as employment, environment, food safety, food labelling, are adding costs to businesses already overburdened with new rules and regulations. Their cost weighs more heavily on an industry that's still largely made up of small, independent operators who have great difficulty in even understanding some of them, let alone complying with them.
3. The Department for Culture, Media and Sport is responsible for tourism yet there is no tourism section in DCMS to oversee the biggest industry in the department's portfolio. A cross-Whitehall, cross-ministerial group to try to co-ordinate often conflicting government policies is being set up, but will it be effective?
4. Responsibility for tourism is split between competing national boards, government agencies, Regional Development Agencies and local authorities. All are publicly funded but there is almost no coordinated effort on a national basis. Some RDAs favour tourism, others do not. Some regional tourist boards have been disbanded. There is duplication of effort. Money is wasted. VisitEngland, representing a country which attracts three-quarters of all overseas and domestic visitors to Britain, has only just been set up and may well be able to bring some order into the chaos of conflicting interests but only if it has the authority to act, powerful leadership, and clear lines of responsibility.
What is needed is a government that understands that tourism is the great emerging industry of the 21st century. Do we have that? Not on the evidence above..
Yet, while tourism is a remarkably resilient beast, recovery will take time. What should we do in the meantime?
We must continue to invest. The hotel industry alone has invested £5bn in each of the last five years and opened 1,000 new hotels and many new restaurants. But the recession means that this investment is already slackening. Yet it is at this precise point in time that the industry needs tax and fiscal incentives to encourage continued investment in new hotels, in refurbishment and in additions and extensions. Ironically, government actions have achieved the opposite result.
e must continue to invest in staff training and staff development. Staff costs represent 30 per cent of turnover in a hotel and over 40 per cent in a restaurant. We need to ensure that the staff we have are fully trained so that we optimise their use. Just as important, we need to ensure that the levels of service they provide match the best.
So we must incentivise the use of training schemes and short training courses. We must simplify the plethora of qualifications that exist in the industry so that employers understand them, and understand what skills people have when they are presented with them. We must extend existing benchmarking schemes to cover more of the 300,000 tourism businesses in the UK.
The overwhelming need is for UK tourism to provide even greater value for money. How do we achieve it at a time of sagging demand, lower occupancies, reduced revenues and fewer staff? All these factors make it more difficult and more expensive for businesses to provide it. Yet the need to provide it has never been more critical.
We have to promote Britain more aggressively. In the short-term, promotion should focus as much on the £21bn domestic market as on the £15bn overseas visitor market. But to succeed in both, providing value for money remains overwhelmingly important - the key to success.
But providing it needs leadership. It needs leadership on the part of the government, in providing the right economic environment, the right incentives, in providing the right tourism structure. And it needs leadership on the part of the industry in providing the right facilities and the welcome.
But the government must lead the way. There's precious little evidence of it, so far.
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