Invest more to make more

26 January 2006
Invest more to make more

More investment in marketing and quality standards are needed to tackle Britain's £18b tourism deficit, argues Bob Cotton, chief executive of the British Hospitality Association.

At the same time, the number of UK residents holidaying abroad has risen inexorably to create a near £18b imbalance in 2005. For every £1 an overseas visitor spends in the UK, UK residents spend £2.32 overseas.

If these figures reflect general international trends - more people throughout the world traveling to an increasing number of destinations - they do not lessen the challenges faced by individual countries. Established tourist destinations, including the UK, have to fight hard to maintain their market share.

In the UK's case, the 92% increase in the number of overseas visitors since 1985 more than makes up for the 30% fall in visitor nights. But if spend in real terms is down so dramatically - and if so many UK residents are holidaying abroad - - then UK tourism is having to run faster to make real progress.

Figures for domestic tourism are also cause for concern. There is some confusion about the accuracy of the latest statistics but they appear to suggest that the number of nights spent away from home in the UK by UK residents has declined by more than 25% since 2001, with expenditure down by 6% in real terms.

The figures highlight the challenge facing the UK tourism and hospitality industry: to attract increasing numbers of overseas visitors (and to encourage them to stay longer and spend more) while, at the same time, encouraging more UK residents to holiday in the UK.

The UK government has expressed concerns about the imbalance of payments between inbound and outbound tourism and, given free rein, its instinct would surely be to slap on taxes or restrictions to stop this exodus. But a draconian fiscal imposition would not only be highly unpopular - it would probably be impossible within the EU.

By far the best solution is for the industry and the government to invest more in marketing and promotion and for the industry to continue its present (high) level of investment. At the same time, operators must beef up service and product standards to ensure that even greater value is provided.

Then the UK's reputation as a high cost destination, particularly to the US market, will be counterbalanced by a growing perception of improving value.

Should we expect more public funding for VisitBritain? Probably yes - its grant-in-aid has been set at the same level for the past eight years. But it should be remembered that both Scotland and Wales, as well as London, are putting significant sums of money into overseas promotions.

The one country that's missing out is England, which attracts over 75% of all overseas and domestic visitors. While most Regional Development Agencies are committing funds to domestic tourism, central funding for promoting England abroad is tiny in comparison.

So let's not wring our hands about the imbalance of tourism payments. We must be more positive than that. Let's continue the investment, the improvements, the refurbishments. Let's make our staff even more skilled and more productive so that our service is the best in the world. In that way, we can make the UK a destination that even more visitors - including UK residents - want to visit!

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