The current government involvement in tourism
The current government involvement in tourism
The tourism industry is believed to be the world’s largest industry, and as such, involves a vast array of public and private sector organisations. This assignment will look at the types of government organisations that structure the UK tourism industry.
It is important to look at the volume and value of the tourism industry first, so that the reader can appreciate the scope of tourism in the UK. Identifying the roles and policies of the public organisations, will show the nature of government involvement, and the section on VisitBritain will highlight the recent changes to tourism structure.
This will give the reader a broader picture of the UK tourist industry, and will allow an understanding of the motives behind government involvement, which will provide the focus for the next section.
The conclusion will highlight the areas studied in the assignment, and a give a brief summary as to its findings.
2. GOVERNMENT INVOLVEMENT IN UK TOURISM
2.1 The volume and value of tourism in the UK
Tourism can be defined as:
‘The activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business or other purposes’ (World Tourism Organisation (WTO), 1991).
Therefore, we can ignore the common myth that ‘tourism is only leisure holidays’, and see that it also includes business travel, day trips, and visiting friends and relatives (VFR).
Many people also believe that tourism is only international, when in fact, 80% of all tourism in 2001 was domestic, and it contributed £26.1 billion to overall spending by UK residents. This figure was achieved through the 163.1 million trips made within the UK, most of which lasted one to three nights (www.staruk.org, visited 28/02/03). This tells us that most trips were for only a short period, and so can be said to be predominantly day visits.
Overseas visitors also provide a significant source of income to local economies and in 2001 they contributed £11.3 billion over 22.8 million trips. Although these figures seem significantly smaller than for domestic tourism in the same year, the average spending per trip was £160 for domestic tourism, and £489 for overseas visitors (www.staruk.org, visited 28/02/03). The reasons for the difference can be explained by the cost of travel (e.g. flights) and accommodation (the average length of stay was over 8 nights by overseas visitors). Recently released figures have shown a 36% increase in overseas visitors to 24.2 million in 2002, as well as a growth in spending to £11.8 billion (www.britishtouristauthority.org, released, 05/02/03). This shows the re-growth of this part of the industry after the sharp fall in 2001 as a result of the events of September 11th.
The size of these figures show how important tourism is to the UK in general, but it also seems appropriate to look at its impact on various areas within Britain.
2.1.2 The impact in regions of the UK
This section briefly focuses on two different parts of the UK, namely the South West of England, and Greater Glasgow & Clyde Valley in Scotland.
The South West Tourist Board deals with the seven counties in the area. It contains two National Parks (Dartmoor and Exmoor), covering 1.6 square kilometers of land. Tourism is high not only due to these national parks but because of various other attractions, including the Jurassic Coast of Dorset/East Dorset that was given World Heritage Site status in December 2001.
The attraction is proved by the 2001 figures that show the South West to attract: 14% of all domestic trips and 8% of overseas visits; 18% of all domestic night stays and 7% equivalent for overseas visitors; and the area received 16% of all the domestic tourism expenditure and took 5% of overseas visitors money (www.westpart.wctb.co.uk, visited 03/03/03). The final figure is of most economic significance to the area, and shows that the local economy benefits greatly from domestic tourism. In fact, total tourism to the area generated £3.275 million for the local economy.
In Greater Glasgow & Clyde Valley the aim is ‘to increase visitors and provide quality information services’. One way of promoting the area is to use the fact that it is the home of eight of the top twenty Scottish attractions (including Kelvingrove Art Gallery and Museum). Supply for tourists to the area is also enhanced through the two airports it holds. These provide easy access to the area for not only overseas visitors, but also those from other countries in the UK. In fact, overseas tourists totalled 400,000 visits in 2001, spending £165 million in 1998 (www.touristboard.seeglasgow.com, visited 06/03/03). In contrast to figures shown earlier, this amount is very similar to the domestic tourism expenditure of £183 million in the same year, showing that overseas visitors contribute almost as much as UK residents.
We can see by these figures that the demand for tourism is high, and therefore it is necessary that the government has organisations to advise it on key policy issues affecting the industry. The key government and quasi-government organisations that have responsibilities for Tourism in the UK can now be discussed.
2.2 Nature and scope of government involvement
2.2.1 Roles and policies of government organisations
Before April 2003, the British Tourist Authority was the main governing body for tourism in the UK, and was funded by the Department of Culture, Media and Sport (DCMS). The DCMS has the role within tourism of ‘encouraging and helping the industry improve facilities and promote a positive image abroad’ (www.culture.gov.uk, visited 13/03/03). The BTA ‘advised the government on issues affecting the British tourism industry and advocated for changes to policy’ (www.britishtouristauthority.org/, visited 17/03/03).
The English Tourism Council (ETC), Wales Tourist Board (WTB), Scottish Tourist Board (STB, now VisitScotland) and Regional Tourist Boards worked with the BTA to achieve the specific objectives of their region, and meet the policies outlined by the DCMS. These were identified in the Tomorrow’s Tourism document produced in 1999 and include: to provide a new support structure for tourism in England; to develop and promote quality tourism experiences; to provide better information about tourism; to promote improved career opportunities in the tourism industry; and to promote the sustainable development of tourism.
The ETC was launched in July 1999 and transformed the English Tourist Board. Its role was to support the business of tourism by ‘working to improve the quality of England’s tourism experience, to strengthen the competitiveness of the sector and to encourage the wise growth of tourism’ (http://www.englishtourism.org.uk, visited 13/03/03). The ETC set the standard for tourism in England in order to achieve the objectives set out by the DCMS. By working towards ‘improving the quality of England’s tourism experience, strengthening the competitiveness of the sector and to encouraging the wise growth of tourism’, the ETC used the government’s policies as a base for their activities.
The STB has similar objectives, but its policy documents do not identify their link with the DCMS. The policy document (www.scotland.gov.uk/library2/doc11/sfst-00.asp, visited 13/03/03) shows signs of strategies for implementation of the policies, but the various sections give their own ideas as to what will be best to achieve the targets. For example, developing quality tourism experiences will be achieved by improving training and skills for tourism employees, through the introduction of a new industry led Tourism Skills body providing Modern Apprenticeships. They also propose that displaying prices and charges clearly will raise quality in the industry. Other key areas of concern are: the need to modernize the industry by exploiting the Internet; and producing a new strategy to target niche markets, focusing initially on golf, culture and genealogy.
The WTB focuses on the importance of partnership and effective marketing in implementing the policies, but also identify the need for people development and innovation to ‘improve the economic and social prosperity of Wales’ (www.wales-tourist-board.gov.uk/entries/en/2/22/31, visited 13/03/03).
The national offices are all working towards the policies identified in Tomorrow’s Tourism, but use their own, varying strategies in order to implement them.
The DCMS has also highlighted the importance of Regional Tourist Boards (RTBs) in tourism support. They have now been asked to play an active role in which projects/areas to fund. The ETC hopes to improve funding for the RTBs from £5.5 million to £6.5 million. The South West Tourist Board (SWTB) for example, aim to ‘support and assist a competitive, growing, profitable and sustainable tourism industry in the South West’. Their policies focus on generating revenue through effective marketing and developing a ten-year development plan.
In general, the policy concerns are similar throughout the public sector organisations, but each of them have their own ideas as to how they want to approach them, and they all have the overall aim of increasing tourist expenditure.
The merger of the ETC with the BTA to become VisitBritain in April 2003, has meant some government restructuring of tourism, and the new policies build upon those given in Tomorrow’s Tourism. Unfortunately, due to its recent introduction, there is little information available about the new policies, and as such, the quasi-government organisations are still using Tomorrow’s Tourism as a base. However, it is necessary to comment upon what is available.
VisitBritain was set up on 1st April 2003 and has taken on a new marketing role that will develop the use of e-tourism. Funded by the DCMS, VisitBritain aims to ‘promote Britain overseas as a tourist destination and to lead and co-ordinate England marketing’ (www.britishtouristauthority.org, visited 05/05/03), and sees the Internet (e-tourism) as a key tool for success.
The net ‘Grant-in-Aid’ to promote Britain overseas for 2003/04 is £35.5million, with around £15million in non-government funding from partners. The marketing budget for England is £14.1million, with £3.6million of this being deployed through Regional Development Agencies (www.britishtouristauthority.org, visited 05/05/03). Of this £14.1million, £4million has been invested in a new marketing campaign entitled ‘Enjoy England’- the first of its kind for over a decade. The campaign encourages the British public to rediscover the benefits of England as a holiday or short break destination, and explore attractions that are closer to home (www.visitbritain.com, visited 05/05/03).
VisitBritain’s overseas offices work closely with local travel trade and media to stimulate interest in Britain. Also key to this is the importance of working closely with the European Union (EU). Therefore, it is important that we look briefly at the tourism policies the EU has that might affect the way the British government operates.
2.2.3 The European Union (EU)
The EU aims to strengthen tourism and to encourage co-operation between all the public and private operators in the industry. 1990 was established as European Tourism Year. Discussions took note of a range of views on the Community’s role in promoting tourism and a lack of co-operation between the operators, both public and private, and consumers. An action programme was developed, which aimed at developing tourism by co-ordinating tourism activities within the Commission and the Member States. It would also encourage and support innovative projects, by providing financial aid, and through legislation to improve tourist information and protection.
The main objectives now are: to achieve more effective promotion through state aid; distribute the flows of tourists better, both geographically and seasonally; deregulation of transport; better training and easing of taxation. Current policy favours broad economic measures and more cross-border opportunities to stimulate tourism (Holloway, 2002).
These policies show a similarity with those created by the DCMS, and emphasise the importance of partnership between all members of the European Union. For example, the focus on effective marketing has been approached by VisitBritain in the form of the ‘Enjoy England’ marketing campaign. Also, VisitBritain’s overseas offices help achieve co-ordination and cross-border opportunities that the EU is seeking.
However, the EU does have more focus on the environmental issues related to tourism, and is more concerned with tourist rights and legalities, such as taxes and health and safety. This means that British travel and tourism interests have become subject to the EU legislation, and so the DCMS is required to generate policies that meet the interests of all EU countries.
So far we have looked at the structure and role of public tourist organisations, as well as the nature and scope of government involvement. However, it is important that we discuss the motives for the involvement, with a particular focus on tourism’s economic significance. It is this we move onto in the next section.
2.3 Motives for government involvement
The World Travel and Tourism Council (WTTC) estimated that tourism was the world’s largest industry, supporting 204 million jobs (10% of all jobs), and contributing over 10% to global Gross Domestic Product (GDP). In the UK, tourism is estimated to make up 4% of national income, and supported 2.1 million jobs in 2001 (www.staruk.org, visited 28/02/03). This, coupled with the fact that it is one of the fastest growing industries in the world, shows how important it is for government to get involved to make sure the country makes the most of it.
The government draws up policies for organisations to adhere to so that organisations work together to provide the best tourism experience for all tourists. Without government intervention companies have little incentive to work with other organisations, and so the industry would suffer. The DCMS has also worked to increase competitiveness so that entry and exit barriers can be reduced, which in turn, helps attract new businesses.
The social and cultural benefits are also a key factor for the government. Tourists often like to visit different cultures, and learn about different ways of living. This helps improve relations and reduce cultural prejudices. Other social benefits include: the improved local morale that accompanies better job opportunities and a sound local economy; better infrastructure; and greater awareness of the country and its tourist attractions, as well as improving international links and goodwill (home.cc.umanitoba.ca/~benbow/nattourp.html, visited 05/05/03).
Perhaps the most important benefits that cause tourism involvement by the government are those of an economic nature. It is this that provides the focus for the next section.
2.3.2 Economic benefits
We have seen the statistical analysis of tourist expenditure, but this represents only a small picture of the economic impact (Cooper, 1998). The full assessment must take into account indirect and induced effects, leakages, and displacement costs. Indirect benefits arise from the trade between local businesses in order to supply tourism goods and services. The spending of wages in the local economy is an example of the induced impact of tourism. However, some money will be lost in the form of taxation and savings (known as leakages), and the development of new attractions, may take business away from other companies (known as the displacement effect).
All of these effects are used in the multiplier concept, which refers to the ratio of the changes in economy level to the change in tourist expenditure. The income multiplier, for example, measures the total change in household income as a result of a change in tourist expenditure. The government uses the multiplier to measure the potential impact of various tourism developments, as well as the impact on the balance of payments.
These economic benefits provide a basis for the regeneration of areas within the UK, and the next section looks briefly at how tourism development has benefited Manchester.
2.3.3 Benefits of tourism to local areas
The regeneration of Manchester is a key example of the positive effects of tourism development. Before the 1990s, the main industry in Manchester was manufacturing. The sharp decline in the industry meant that by the mid 90s, Manchester was one of the most deprived areas in the country.
The government saw the potential of the area for regeneration, and invested £447million into helping Manchester stage the 2002 Commonwealth Games. Not only did it bring 4500 full-time or equivalent jobs to the area (www.manchester.gov.uk, visited 20/03/03), but it also improved transport links through the development of the ‘metro link’, and attracted new business to the area. Staging the Commonwealth Games brought massive tourist expenditure to the area, helped improve awareness, and left the local people with world class sporting facilities to use. It is hoped that the new businesses and facilities will encourage over 300,000 visitors to the city.
Programmes such as this, demonstrate how tourism can revitalise a local economy, and with sufficient funding, can improve the national economy and tourist industry as a whole.
This assignment has attempted to give the reader an insight into the nature, scope, and motives behind government involvement in UK tourism. By highlighting the significance of tourism and identifying the roles and policies of government organisations, the assignment gives the reader an understanding of the industry. By giving a case study example of the regeneration of Manchester, the reader can see what benefits tourism can bring, and helps show the motives behind government involvement.
However, there is some criticism about the way government handles the industry. For example, the fact that there isn’t one government body overseeing tourism means that the overall planning of tourism is hindered in this country (Holloway, 2002). To make policies requires input from all of the government and quasi-government organisations, and so valuable time can be wasted, as well as the problems created by conflicting opinions.
Other criticism comes in the form of high VAT rates that affect hotels, and air transport. This raises prices for tourists, and attracts them to other countries that may have cheaper accommodation.
Having said that, the government is making strides towards reaching sustainable tourism by revamping organisations (e.g. VisitBritain), and introducing heavy marketing campaigns, as well as Regional Development Agencies (RDAs) to promote economic growth. The challenge for the DCMS is to continue to adapt to changing needs and environment, in order to remain one of the top five tourist industries in the world.