Tourism sector bosses have reiterated their calls for a dedicated minister to help the sector bounce back after Covid – and highlighted the need to compete with destinations that spend more on marketing.
This year, Ireland is spending €80 million on international marketing, while Spain has a budget of €90 million – but VisitBritain’s marketing expenditure is just £10 million, MPs were told.
The heads of UKinbound, UKHospitality and the Tourism Alliance told MPs that a coherent strategy was needed to tackle problems such as the cost of Air Passenger Duty and VAT – and to recognise the true value of tourism to the British economy.
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Joss Croft, UKinbound chief executive, told the Digital, Culture, Media and Sport (DCMS) committee that the current minister for tourism, Nigel Huddleston, is “excellent” but he also has to look after issues such as the arts, culture, heritage, the Commonwealth Games and civil society.
“[Inbound tourism] is a £28.4 billion export industry, it’s as big as pharmaceuticals,” he told the MPs during a session called ‘Promoting Britain Abroad’.
“It is huge and contributes to the UK’s soft power credentials overseas; it’s big business.
“It definitely warrants a specific minister of state, given the size of that portfolio and the size and value and importance of the industry.”
Kurt Janson, Tourism Alliance director, highlighted how DCMS has “very few of the levers that control tourism” as departments such as the home office, department of transport and treasury have “the main levers that impact the growth of the industry”.
“We need someone who can go across government with the power to get government ministers on board and develop a coherent set of policies,” he said.
Commenting on tourism marketing budgets in Ireland and the UK, he said the Irish are spending €16 per head of population while VisitBritain is spending 30p per person.
Janson also pointed to government policies that were deterring rather than encouraging visitors, such as the demand for Europeans to have full passports instead of ID cards; the axing of duty-free shopping; and the cost of visas.
Kate Nicholls, chief executive at UK Hospitality, pointed out that the US state of Pennsylvania has a bigger marketing budget than the whole of VisitBritain.
“We have world-class-beating assets – hotels, bars, pubs, food, attractions, heritage, culture, music – we rely on the fact that they are the top in the world,” she commented.
“We would get more bang for our buck if we were more joined up strategically.”
She said the DCMS “does not join the dots” between tourism and other aspects of its portfolio such as sport, culture, music and heritage, and the government does not join those dots across other sectors.
Highlighting the UK pavilion at Expo Dubai, organised by the Department of International Trade, she said it is focused on trade, products and manufacturing, not culture and soft power.
“It does not join dots to give you a sense of what it is to do business in Britain or what it is to visit Britain,” she said.
They warned that the impending increase in VAT will increase costs, with Nicholls commenting: “We will see significant price increase for international visitors and UK visitors when VAT goes back to 20% at the end of this month; we could see 10% price increases for hotels, holiday parks, caravan breaks, eating and drinking out.”
She said the Omicron surge had hit the recovery of hospitality so keeping the lower rate of VAT will help that revival.
Janson said a coherent strategy for inbound and domestic tourism would help tackle the problems of VAT, Air Passenger Duty and visa costs.
He explained that, over the course of the pandemic, domestic tourism lost £95 billion, inbound lost £44 billion and outbound lost £40 billion – totalling almost £180 billion in revenue over the past two years.
Government support was about £37 billion so businesses are trying to deal with a £140 billion hole, he warned.
Croft outlined why government support had not been so effective for UKinbound members, who had wanted furlough to continue past September as borders were not fully open; and did not qualify for leisure and hospitality grants; and VAT refunds were not a benefit when people were not travelling.