Rt Hon Philip Hammond MP
Chancellor of the Exchequer,
1 Horse Guards Road,
London SW1A 2HQ
17th October 2018
Autumn Budget 2018: Considerations for Wales Tourism Industry
The tourism industry in Wales has consistently demonstrated a very high return on public investment and has been at the forefront of the UK’s economic recovery. VisitBritain calculates that it only takes £26 of public funding to generate £624 of additional tourism revenue for the UK – which equates to just £225 of investment to create an additional job. This is supported by Office for National Statistics research which show that tourism generates considerable additional employment, export earnings and revenue for the Exchequer.
Within Wales tourism generates approximately £6 billion of visitor spend and provides jobs for 172,000 people. In economic terms it contributes 13% of GDP to the nation which is significantly higher than in England (8.6%), Scotland (10.4%) and Northern Ireland (5%). But tourism in Wales operates in an increasingly competitive global marketplace, which can be evidenced by the recent publication of IPS data. Feedback received from our members invariably focuses on rising operating costs together with threats posed by external agencies and even the threat of new taxes, while other industries receive substantial subsidies.
The Wales Tourism Alliance believes that to maintain and grow market share, a number of measures should be considered by the UK Government and be part of the new Tourism Sector Deal specifically highlighting Wales. This would alleviate financial pressures, provide a more equitable trading environment – and create additional trading opportunities:
Therefore, I am taking this opportunity to draw your attention to a number of issues that the Wales Tourism Alliance members are particularly concerned about:
Ours is an industry that post BREXIT contains considerable opportunities for growth, but growth that is dependent on both Wales devolved Government and the UK Government delivering in partnership. We understand the pressures on your department, but believe that the value of tourism to the UK and Welsh economy, requires that you pay this sector more attention in relation to the points above.
Thanking you for your attention.
Chair - Wales Tourism Alliance
97 Harbour Village,
Wales SA64 0DZ
WTA attended this VisitBritain event, which included the Annual Review 2017 and UK Industry Strategy update meetings. At the Annual Review, an opening address was given by UK Tourism Minister, Michael Ellis MP, which was followed by presentations from VisitBritain Director Dame Judith McGregor and VisitBritain CEO Sally Balcombe.
Annual Review presentation content included consideration and celebration of the 2017 IPS figures, which recorded 39 million overseas visitors coming to the UK, spending £39 billion; the Tourism Sector Deal (which is still awaiting sanction from the UK Government); challenges and opportunities presented by Brexit; an update on the £40mn Discover England Fund; performance of the VB Online Shop which generated £27.8 million in visitor spend (£2 million profit); seasonality and dispersal issues (London is “seen as Britain”) – and finally the continuing need to reduce the deficit on the UK Balance of Payments Tourism Account by increasing domestic tourism visits. In conclusion VB wishes to build upon this current platform of economic success by delivering more growth, with an accent upon spend as opposed to volume. Improvement in productivity rates, linked to reducing seasonality was also mentioned.
WTA Chair, Andrew Campbell, whilst acknowledging the success of the UK figures, made comment within the Q/A session that the 2017, 17% fall in visitor spend figures, over 2016, for Wales had generated feelings of disappointment and surprise in equal measure, as overseas visitor numbers were up and tourism businesses had generally reported reasonable levels of trading last year. This has led to some reservations being held about IPS survey methodology, in particular the small sample size, (approx 400) which does not always work in favour of UK areas. The point was accepted and acknowledged.
Topics covered within the BTIG Strategy Meeting included the IPS 2018 figures (Q1); the VB Events Strategy (which was also presented at the TBOE event on 5th October at Celtic Manor); a case study from Marketing Manchester; consideration of Asia Pacific and Middle East markets – and finally a general review of 2018 UK tourism performance to date, at which WTA Chair gave some feedback for Wales.
A wide range of speakers stressed the need for there to be joined up thinking between the private and public sectors if opportunities are to be realised, although an overseas representative from PCMA remarked that “the high level of UK VAT is a barrier to attract international events”. A reminder that the call for a reduction in this tax must continue.
At this inaugural TBOE Wales event, delegates, including WTA, met to discuss how Wales can increase market share of business events from the UK and overseas. The UK Events sector is currently worth £42 billion, with Wales contributing £840 million (2%), highlighting clear potential for growth. For information, Scotland’s share is 8.9%.The choice of venue was appropriate given that the new International Convention Centre Wales will open in Summer 2019. This purpose built facility will be able to accommodate 5,000 delegates and will include a 1500 seat auditorium. There can be no doubt that it will be a “game changer” in terms of raising the profile of Wales as an events destination. To date, £2 million of bookings have been secured, worth £18 million to the Welsh economy. The Business Events Strategy for Wales was presented by Heledd Williams (HOD), who outlined the role of the newly created VisitWales Business Events Department – and set out ways as to how tourism businesses can become more engaged in developing this market sector.
With reference to the recent Welsh Government publication, “Selling Wales to the World” and in particular Conclusion 12), WTA Chair Andrew Campbell asked what more can be done to involve stakeholders in capitalising on events held in Wales – and also commented that the ICC is perceived by some businesses as a South East Wales project, which will not deliver wider economic benefits. The assertion was refuted, with many ideas and examples given as to how opportunities can be accrued, both within and outside the region. For further information businesses should access the Meet in Wales website - https://www.visitwales.com/businessevents
Unfortunately, the Q3 figures will be released in January so it is going to be quite a while before we find out the results for 2018 as a whole. However, the figures are not looking good for the YTD, total tourism is down 7% by volume and 5% by value across the UK. This is somewhat surprising as the modelling did predict that tourism to the UK should be rising due to relative weakness of the pound, VB predicted a 6% increase this year.
Adrian Greason-Walker, WTA Policy Advocate said, 'What is particularly disappointing is that Overseas Visitor Numbers from April to June were worse for Wales than the UK as a whole, down 9% with spend down 4%. This at a time of a weakened pound, when we would normally be expecting an uplift'.
By comparison outbound tourism is holding up well being down just 2% by volume and 0% by value. Therefore weakness of Sterling; wage growth struggling to beat inflation and the good weather we had this summer, seems to have has had little impact on UK residents wanting to travel overseas.
Of note is Scotland, which is again bucking the trend with Visitor numbers. However, what does not make much sense is that even though Scotland has experienced a 30% increase in visitor numbers in the first half of 2018, the IPS figures suggest that there has been no change in the revenue generated by these visitors. More questions than answers from the ONS.
At a recent Scottish Tourism Alliance conference earlier this week Nicola Sturgeon MSP, Scottish First Minister discussed the UK Cabinet's post-Brexit approach to immigration with colleagues at the STA.
The UK Government has reportedly approved a new skills-based system which would see EU nationals facing the same immigration rules as people from other countries outside of the EU. This would require people coming to live and work in the UK meeting a salary threshold of £30,000 per year. Nicola Sturgeon stated that 'It...threatens to create a workforce crisis in sectors that are absolutely critical to the Scottish economy...under that approach it’s estimated that 75% of the EU nationals currently working in Scotland would have been ineligible to come here in the first place. It will therefore be incredibly difficult in the future to maintain and to expand the workforce on which our economy depends'.
Nicola Sturgeon then went on to state that the tourism industry will be one of the sectors most at risk and is therefore calling for the devolution of this policy, within the current immigration system. The Scottish Government has backed that call.
Andrew Campbell, Chair of the WTA endorsed this suggestion stating, 'Even though this is a Scottish First Minister, it could equally apply to Wales. This is not only a sensible suggestion, but necessary. Devolution of migration policy would enable Wales to choose for itself who was able to work in Tourism and other industries, especially as we struggle with a different set of economic circumstances than those over the border.'
Aviation Security https://www.gov.uk/government/publications/aviation-security-if-theres-no-brexit-deal/aviation-security-if-theres-no-brexit-deal
There will be no change for people undertaking direct flights from the UK or flights from the UK that transfer through a UK airport
Flights To and from the UK https://www.gov.uk/government/publications/flights-to-and-from-the-uk-if-theres-no-brexit-deal/flights-to-and-from-the-uk-if-theres-no-brexit-deal
Operating bus or coach services abroad https://www.gov.uk/government/publications/operating-bus-or-coach-services-abroad-if-theres-no-brexit-deal/operating-bus-or-coach-services-abroad-if-theres-no-brexit-deal
Vehicle insurance https://www.gov.uk/government/publications/vehicle-insurance-if-theres-no-brexit-deal/vehicle-insurance-if-theres-no-brexit-deal
Producing food products protected by a ‘geographical indication https://www.gov.uk/government/publications/protecting-geographical-food-and-drink-names-if-theres-no-brexit-deal/producing-food-products-protected-by-a-geographical-indication-if-theres-no-brexit-deal
EU Geographical indication (GI) protection currently covers 86 UK products which make up a quarter of the value of UK food and drink exports.
Taking your pet abroad https://www.gov.uk/government/publications/taking-your-pet-abroad-if-theres-no-brexit-deal
Thanks to Kurt Janson - Tourism Alliance for the summary
An independent organisation that represents the tourism and hospitality industry across Mid Wales and long standing member of the WTA, has been recognised at the Social Business Wales Awards 2018. MWT Cymru was runner up in the Tech for Good: Technology in Social Enterprise category at the annual awards held at Cardiff City Hall last week.
Company chairman Rowland Rees-Evans said: “We are delighted to be recognised for the work that we do to pull together hundreds of small businesses in the tourism industry for marketing purposes. As a social enterprise supporting businesses in rural Wales, we are proud of our team’s expertise at developing digital media to help promote tourism in the region.”
Formed in 1991, MWT Cymru is based in Machynlleth and has around 550 members in its core area of Powys, Ceredigion and Meirionnydd. The company delivers a range of marketing activities and project work to support the development of a strong and sustainable tourism industry in Mid Wales.
the NAW Economy, Infrastructure and Skills Committee' Selling Wales to the World' Final report: Recommendations...
The First Minister, Carwyn Jones AM, in an article in the Times newspaper, announced that he had “made it an immediate priority for the Welsh Government to get out and sell Wales to the world like never before”. Following that statement the EIS Committee decided to launch an inquiry to explore how the Welsh Government have actually been selling Wales to the world to date focusing in three areas including tourism.
The WTA supports many of the recommendations made in light of both Adrian Barsby, Former Chair and Adrian Greason-Walker, Policy Advocate, providing evidence directly to the Committee in session and in writing. Adrian Greason-Walker stated that 'the WTA is pleased that this important report has been released at a time when Wales is about to face major challenges ahead of the UK's separation from the EU. We anticipate much of that which is contained in the report will be acted upon as a matter of urgency'.
Whilst the WTA supports the report and the recommendations made, we were particularly keen to see the following recommendations included:
Recommendation 6: The Welsh Government should consider how to enable a wider range of businesses in Wales to access the branding, while retaining control of standards.
Recommendation 7: The Welsh Government should continue to lobby for better representation as part of the VisitBritain digital presence, including the number of bookable products.
Recommendation 11: The Welsh Government should continue to lobby the UK Government on the devolution of Air Passenger Duty to Wales. ..
Recommendation 12: The Welsh Government should review its plans to support the industry with workforce development in tourism, in the context of Brexit.
As part of the Wales Coast Path project (WCP) the project team will soon be launching a new marketing campaign aimed at helping coastal businesses get more from the Path.
Andrew Campbell said, 'The WTA is pleased to see and engage with the Wales Coast Path (WCP) Team who are proactively getting in touch with interested businesses. The Wales Coast Path provides us with an opportunity and we believe it has the ability to deliver added value and increase local tourism business profitability. We wish the team and the participants every success'.
Plans are in place to develop an on-line toolkit - a free resource to help those businesses along the Wales Coast Path, to generate new and profitable business. It's part of a commitment to explore opportunities to work with partners, and plans are well under way to develop content. The new "toolkit" of resources will be made available online, free of charge, and contain ideas and practical help and information for businesses to use to boost their profile by attracting more customers. You will be able to easily access advice on running marketing campaigns and ideas for creating special offers as well as download WCP maps and walks; special logos; images and sample media releases - all designed to help make your business better while helping to promote the value of the Wales Coast Path to visitors and locals alike.
As part of their planning, WCP wants to know what your requirements and needs are, if you'd like to be included in the loop and learn more about what the toolkit will contain and how it will help you, then you need to register by logging on to this web address:
The numbers are truly staggering, according to 'Tourism Towards 2030' the number of international tourist arrivals worldwide are expected to increase by an average of 3.3% a year over the period 2010 to 2030. Whilst it is expected that the rate of growth will gradually decrease over time, in numbers, international tourist arrivals will increase by some 43 million a year (compared to 28 million a year during the period 1995 to 2010). At this projected rate of growth, international tourist arrivals worldwide are expected to reach 1.4 billion by 2020 and 1.8 billion by 2030.
Global market share for Asia and the Pacific (upto 30% in 2030, from 22% in 2010), the Middle East and Africa will all increase. However, it is not all upward, mainly because of the slower growth of the mature destinations in Northern and Western Europe, Europe (to 41% from 51%) is expected to see a decline in their share of international tourism, although absolute numbers will still rise.
'With uninterrupted growth in arrivals for eight straight years, it seems we need to ensure that our destinations are prepared, not only for an increase in demand, but that we have the skills and capacity to handle new markets and growing customer expectation. Not to mention how as an industry, we come to terms with mitigating the potential global environmental impact." - Adrian Greason-Walker, Policy Advocate, WTA
'Tourism Towards 2030' can be found here - www.e-unwto.org/doi/pdf/10.18111/9789284419029