The target was to attract 40 million international visitors a year, spending £31.5 billion, by 2020. As we approach the new year, Brendan Moffett, Director of the University of Derby’s Centre for Contemporary Hospitality and Tourism, explores whether the strategy has been a success.
“The idea behind the strategy was to align the tourism industry with government departments and agencies to deliver long-term growth – and it appears to be working.
“The latest forecast suggests there will be 38.9 million visitors, spending £24.5 billion, in 2019, which is an all-time high for the sector.”
Tourism Sector Deal
To enable the sector to continue achieving sustainable growth, earlier this year, the government launched a Tourism Sector Deal, setting out how the government and industry will work in partnership to boost productivity, develop the skills of the UK workforce and support destinations to enhance their visitor offer.
“This is the catalyst needed to drive forward tourism growth across the UK and we are keen to play an active role in helping the sector achieve these productivity gains.
“The hospitality industry alone employs over three million people and produces £130 billion of economic activity each year. The Deal acknowledges this valuable contribution, but also highlights some of the interventions needed to fuel further growth, such as improved transport infrastructure, smart ticketing, more strategic use of data, and better distribution of visitors to regions, particularly in off-peak periods.”
Much focus is on the UK to grow visitor numbers and impact the long-term economy, but what opportunities are there for regions to play their part in the bigger picture?
“Places such as the Peak District are imperative to Britain’s tourism industry. The latest industry data reveals that the Peak District and Derbyshire’s tourism sector is now worth £2.3 billion to the local economy, with 42 million people visiting the area in 2018, supporting 30,000 jobs – a 7.4% increase on the previous year.
“2019 marks 70 years since the founding legislation for our national parks, of which the Peak District was the first. It continues to be pioneering with the curation of a collection of new experiences, earning the coveted Outstanding Contribution to Tourism Award this year.
“This momentum is maintained by the news that the area’s official tourist board, Marketing Peak District and Derby, has secured £1.2 million in funding from the European Regional Development Fund to extend its current business support programme. This is a significant boost, which will provide valuable support to our tourism businesses, and the University of Derby is delighted to be a partner in this programme.
“We are very fortunate that our wider region boasts over 6,000 visitor economy-related businesses, including major names such as Center Parcs and Chatsworth House, and includes natural assets such as the Peak National Park, and heritage attractions such as Derwent Valley Mills and the soon-to-open Buxton Crescent.
“The visitor economy in the region grew by over 25% between 2012-2017 and the Local Enterprise Partnership D2N2 acknowledges the sector’s high potential growth, forecasting that it has the potential to contribute an additional £0.5 billion to the regional economy.
“Successes such as this are what will drive impact and boost productivity growth for Britain as a whole.” However, the UK faces stiff competition for international tourism. Although the UK is ranked sixth in the World Economic Forum’s 2019 Travel & Tourism Competitiveness report, much has to be done to ensure it retains its global position in the tough economic climate.”
But what about Brexit?
“The potential impact of Brexit is, undoubtedly, a concern for the UK’s tourism and hospitality industry, although the figures for 2019 suggest a marginal impact of Brexit at this stage. Research by STR and VisitBritain suggests a marginal decline in positive sentiment towards the UK from EU travellers, but this is not reflected in wider international markets.
“There are also concerns that there will be an increased regulatory burden, which may have a significant impact on commercial contracts, and the value of sterling will be critical.”
Another major challenge for the tourism industry is the rise of online brands, such as Booking.com and Airbnb, competing against conventional business models and gaining market share.
This year, the tourism industry witnessed the collapse of travel giant Thomas Cook – the oldest travel company in the world - with Brexit, the internet revolution, and the changing needs of consumers, all speculated to have played a part in its demise.
“Many saw the collapse of Thomas Cook as the death of the package holiday. However, it was the financial structure of the business and the debt burden which sent the business under. The company still sold several million holidays in the UK last year.
“Although there is a trend towards personalisation and more ‘experiences’ when it comes to holidays with the rise of new entrants such as Airbnb, there is still a customer base that value simplicity and service when spending a large chunk of their annual disposable income.
“Hoteliers from destinations such as Turkey and the Canary Islands still want to sell in bulk into the UK market and cannot do the job efficiently themselves. The news that Hays Travel will take on the 500 plus retail outlets suggests there may still be a good living to be made by a UK agent that sells products from all the main tour operators.”
However, there is much anticipation that the Tourism Sector Deal will begin to help future challenges for the sector.
Looking to the future
“Forecasts have identified as many as one million additional employees will be needed in the hospitality sector over the next two years, which means the pressure is on to develop a highly-skilled workforce, foster skills so individuals are able to fulfil their career ambitions, while plugging the existing skills shortage.
“It must be recognised that the industry is not limited to low-paid, part-time jobs. The sector needs to attract, retain and develop a workforce with the skills it needs now and in the future. If the industry is serious about growing and tapping into international markets then addressing the way in which the workforce operates and advances is a key priority.” Universities play a vital role in developing and nurturing the skills needed to meet industry demand. One way the University of Derby is helping is by launching a Hospitality Management and Leadership Apprenticeship.
“This has been shaped by leading employers and professional bodies to offer an apprenticeship and work-based learning route that delivers against the current needs of the sector. We are excited by the outcome of our consultation with industry to develop optimum tailored leadership programmes that will allow them to drive productivity.” So, if the tourism sector is to succeed in securing 40 million visitors by next year and ensure continuous growth in the future, where should it be focusing its efforts?
“There are some interesting future challenges for the sector. In the context of a potential post-Brexit meltdown, there are many industry leaders lobbying for the instruments they believe will fuel growth.
“For many years the industry has called for a reduction from the standard VAT rate of 20% to make services supplied to tourists cheaper in hotels, restaurants and visitor attractions and make Britain more affordable.
“Leading aviation operators including easyJet, Ryanair and British Airways have also lobbied for a reduction in Air Passenger Duty. On the flip side of these proposed legislative changes to drive growth, there is a counter argument to improve sustainability.
“New technologies, including Big Data and artificial intelligence, are helping us to better understand tourism traffic flows, how to better personalise itineraries and how to have a positive impact on the environments we visit.
“The Scottish Tourism Industry is emerging as a thought leader in this space. The Scottish Tourism Alliance is advocating a radical strategy rethink, encouraging visitors to ‘live like a local’, act responsibly, visit outside peak periods and stay more than one night.
“There is huge potential for the UK’s tourism sector but, if Britain wants to be a world-class destination, it needs to be prepared to think bigger and bolder.”