Despite encouraging talk in the early days of the new Coalition Government about the importance of Tourism to the economy, the reality is that the Government Spending Review has impacted on most UK tourism support structures including areas such as quality, training, sustainability and research.
The Regional Development Agencies who often led on Tourism are going and are being replaced by more localised Local Enterprise Partnerships (LEPs). Now Tourism finds itself pitching along with every other sector for representation and funding and however that pans out area by area, one thing is for certain, at best budgets will be cut.
Lower down the chain the recently introduced Destination Management Organisations, which took over from traditional Tourists Boards seem to be also fighting for survival and/or working on much reduced budgets. But is this a such a bad thing for Tourism? Or simply time for businesses in this sector to get real?
In reality a well run business, as many are, should already been on top of issues such as quality, training, sustainability, research; they are after all the core issues any service led business must manage in order to be competitive in a free market. In any event much assistance has been on offer in all these areas for those looking for support over the past 10 years!
Government intervention should only be required or be warranted where there is a clear market failure, not as a matter of course. Indeed, under the previous government, a market failure in tourism was addressed in terms of providing affordable online booking and therefore a route to online consumers for small business via the creation of Englandnet.
Englandnet is a destination management system which drives the publically funded Visit Britain, Enjoy England websites and many locally council funded DMO websites and enables all graded accommodation providers to make their property available online and thus compete on equal terms with larger scale businesses. Additional software was also made available for free or highly subsidized rates to accommodation providers that enabled them to push their availability to major online booking sites.
Given it now exists and small businesses and sole traders can push their offer out to various booking portals such as lastminute.com, means it really is up to businesses to employ this tool. That they choose not to is now a business choice, not a mandate as many would argue for further intervention or support. Indeed even this intervention has been subject to challenge by some within the tourism industry as being anti-competetive; and viewed as state aid by those businesses who invested their own money and time developing their own systems to reach online consumers. So it seems the Government is damned if it does or damned if it doesn't!
Equally, if a business chooses not to invest in quality and training that surely is a business decision. Most in business normally complain about government interference, however tourism has become rather dependent on government intervention, some would say too dependent. As such well run business are seemingly at a disadvantage as market forces are being skewed the other way and intervention and state aid is enabling less well run ones to keep going and where intervention has been well meant such as with online booking it has been met by both apathy and anger in many quarters. For those that believe in a free market and business self-determination, should the government be propping up failing businesses or leaving the market to decide which ones offer value for money? Especially when some within the industry challenge such interventions; this alone must lead many who look after such interventions to question their merit!
So the cuts may be a blessing in disguise!
If nothing else it will show which aspects of the tourism services traditionally offered by LA's are truly valued by local businesses.
Tourist Information Centres are an interesting point in case as they seem to divide trade opinion and go to the heart of the problem with public funding. There are many well supported private TIC's up and down the country that manage to survive through trade subs and smart retailing, no doubt established because of an identified need by local businesses to enhance the visitor experience. However and interestingly, in those areas where there have been publically funded TICs, which are now under threat of closure because of budget cuts, it seems they are less valued. Whilst many in those areas are up in arms about the loss of such a 'vital service' and actively lobby to keep them publically funded; there is little actual appetite from local businesses to take on the overheads to retain the service.
Perhaps one reason is those TIC’s are not cost effective due to never having to trade on commercial lines.
It seems that where a service has been funded, rather than developed through an identified local need, they have less value to businesses and public funding may actually inhibit co-operative local working.
So perhaps the cuts will mean that more tourism businesses work together, identify real needs, see each other as potential allies rather than competitors and take charge of their destinations future, building it from the bottom up together.
By David Rutherford
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