The government’s dysfunctional approach to the UK tourism industry has contributed to falling inbound passenger numbers and has resulted in Britain having the second worst balance of trade tourism deficit in the EU, a new report has claimed.

Backing UK Tourism: Destination Recovery by the British Chambers of Commerce (BCC) and Travelodge said the government’s strategy is inhibiting growth of a sector that employs 1.4 million people, generates £86 billion a year and is the UK’s fifth largest.

The report calls for the Department for Culture Media and Sport (DCMS) to be stripped of responsibility for tourism, and calls it one of the most junior departments in Whitehall, which has influence over less than £50 million of tourism’s £350 million budget.

It also says the various other departments that control tourism’s funds have little or no accountability to the minister of tourism.

BCC director of policy Dr Adam Marshall said tourism needs stronger and clearer support from government if it is to meet its full potential.

“This is a sector that can rapidly create jobs, even in the current economic conditions, yet it suffers from an extremely confused support structure.

“Ministers need to recognise the potential of the industry and make necessary reforms that will help underpin the UK’s economic recovery,” said Marshall.

Travelodge chief executive Grant Hearn said reform of the support structure for tourism would allow the industry to flourish and called on responsibility for the industry to be transferred to the Department for Business, Innovation and Skills (DBIS).

“It is one of the few sectors of the economy that is both currently creating employment opportunities and can also contribute a lot more. However, if that is to happen a sea-change in attitude within Whitehall towards our industry must take place.

“Tourism should be removed from DCMS and the responsibility for delivery given to DBIS, supported by a full-time minister tasked with policy co-ordination.

“Urgent reform can then take place, freeing up Visit Britain to concentrate solely on promoting the UK abroad.

“If the Regional Development Agencies, domestic tourist bodies and local authorities then had to report directly in DBIS I have no doubt we would see a far better use of the public money available for tourism promotion.”

An ABTA spokesperson said for those members who sell it, domestic accounts for 10% of their business on average and that figure will go up this year.

“For many years we have said that we believe there should be a dedicated minister for tourism. Tourism does cover a number of different departments from Treasury to DBIS and Department of Transport.”

This latest report is the second time this year industry figures have called for change in the way tourism is handled by government. In February travel business leaders including Bourne Leisure chief executive John Dunford, Hoseasons chief executive Richard Carrick and Hearn wrote to the Prime Minister to transfer responsibility for tourism from the DCMS to DBIS.

Visit Britain estimates that the tourism industry could create an extra 164,000 jobs and grow into a £113 billion industry by 2018. According to the BCI and Travelodge no extra investment is needed to create this growth, just reform of the current system.

 

Key recommendations

Remove responsibility for tourism from the DCMS. Instead, it should sit in the Department for Business, Innovation and Skills (DBIS) to ensure better co-ordination of funding. A minister should have sole responsibility for tourism. DBIS should take full responsibility for national strategy and policy.

Make the Regional Development Agencies accountable to DBIS for their work on tourism. They must ensure that strategies at the regional level consistently engage business effectively, support tourism and focus on delivery.

Improve Visit Britain’s freedom, support and funding so that it is able to focus on marketing the UK abroad and co-ordinate this activity across the public and private sector.

Improve the Tourism Statistics Agency’s funding to ensure that robust statistical information about the sector is available. Without this it is impossible to accurately quantify importance.