Month: December 2021
Destination matters
Assistance required, potential lesson to be learnt from a DMO’s 2020 failure and changes at the top of tourism at one of the UK’s principal coastal destinations:
1. Can you help colleagues in Scarborough with their review of internal service and destination KPIs? See the full request under the “Forum: ask questions get answers” main menu tab or go direct to the page at: https://britishdestinations.net/need-an-answer/internal-and-external-kpi-dec-21/
2. Some months ago a local BBC reporter asked me why Visit Cambridge and Beyond (VCB) was apparently the only high profile/major “DMO” to collapse in to administration and, why, despite support from the City Council, it did so relatively early in the pandemic? To be honest I am still not absolutely certain it was the only one. Moreover, I know with certainty that many were, still are and in all likelihood will continue to be vulnerable until both tourism’s fortunes improve and the inherent structural and funding issues of “DMOs” are properly addressed.
My main observations in response to the questions were that no two DMOs are the same, so like for like comparison isn’t easy, nor can you just assuming there must be blame or fault, simply because all the other didn’t fail when faced with seemingly similar external pressures. The answer I suggested almost certainly lay in the precise nature of the business model adopted and any inherent vulnerabilities within that. I heard no more but on subsequently investigate, many weeks later I found that my off the cuff assessment as to the why was reasonably accurate, as is witnessed by, among other things, paragraph 5 of VCB’s still active LinkedIn entry:
“We believe that the Visit Cambridge and Beyond business model is distinct from many other DMOs nationally, as it relies almost entirely on earned income”.
Seemingly the collapse in both international and domestic visitor numbers and the direct loss of associated income from B2B and consumer services to them, rapidly pushed the company into difficulties by May and into insolvency by early July 2020.
This year Cambridge City Council, the Cambridge BID and Fitzwilliam Museum Enterprises bought the Company assets at auction (£52k) and have since (October), wisely I think, reformed and reopened Visit Cambridge as a CIC (confusingly one of two Visit Cambridge’s listed).
For context, Visit Cambridge and Beyond was originally incorporated in 2015, absorbed the Council’s tourism services in 2016 and then started trading (continued the motion) that year. Going forward one of the many Council reports on the creation of the new CIC states: “Taking the learning from VCB (Visit Cambridge and Beyond) and its associated unsustainable business model, Visit Cambridge’s approach is to operate as a lean and agile organisation with minimal overheads, ie office, staff etc.”
Whether this “learning” is about levels of financial risk the partners are willing to accept, pure affordability or, more to do with the scope, scale and efficiency of services to be undertaken, isn’t made clear. I suspect only time will now tell what the drivers are and how effective a lean, agile destination management body can be if it is to genuinely manage and take on all the tasks given to them, or inferred, by the role of managing a tourism destination of the scale and complexity of Cambridge.
Also of interest is the memorandum of understanding laying out the aims and objectives of the new “DMO” and the tasks explicitly expected of it in its destination management role. It uses and quotes in full the UNWTO definition of a destination management organisation and their roles, presumable in the absence of any other agreed definition in use in England/UK: https://democracy.cambridge.gov.uk/documents/s55968/Appendix%20A%20-%20Vist%20Cambridge%20DMO%20Memorandum%20of%20Understanding.pdf
Why am I bothering you with all this? Notwithstanding the relatively unusual but not totally unique circumstances surrounding the demise of VCB, combined with the local imperative to recreate a replacement DMO (rather than the alternative of doing without) and the manner and means behind both, I believe provides some potentially very useful lessons. The Cambridge experience could be used to evidence the strengths and weakness of public sector engagement, or the lack of it, the pros and cons differing structures and business models and merits and demerits of pure commercial v part or full public interest approaches. Above all it suggests genuine destinations, genuinely need to be managed and that somewhere in that the public sector have, at the very least, a responsibility for ensuring it happens, if not arguable, a key role and/or functions in that management themselves? As ever, I could be wrong but I just wanted register the example of Visit Cambridge and Beyond within the corporate memory.
Experience tells me that due to financial pressures Council will continue to look at the private sector and commercial approaches, enviously and in the often potentially false hope of easing their current burden and/or permanently shifting some or all responsibility for a, or the, key local social and economic generator. While the private sector will continue to struggle to provide fully functioning destination management and to positively influence all that needs to be managed, on a purely commercial basis and will necessarily have to seek at some point significant local or national public support and contribution. Meanwhile a multitude of other hybrid, third sector and BID base arrangements are making best as they can, somewhere in between, often concurrently experiencing both the good and bad features of both the other two main camps.
For the next few years at least, the demise of VCB offers some potential pointers and food for thought for against both sides of the public v private debate. It is never a popular approach but learning from failure can be as good or much better than learning only from other’s apparent successes.
3. On a much more personal basis I am sure colleagues would want to join me in wishing Alan Carr, stalwart of destination management and, we believe, by far the longest serving, member destination manager with some 28 years of service at Great Yarmouth and, well over three decades of destination management experience in total, a very long and happy retirement, as of today’s date.
He and his wit and wisdom will be sorely missed. If colleague and friends would like to wish Alan well directly, or to keep in touch with him, I can happily help with that. For the time being I am assuming Alan’s work emails will still get to him: alan@gyta.com .
I am also certain that you would want to join me in congratulating Asa Morrison on his appointed, in open competition, to the post of CEO of Visit Great Yarmouth and Greater Yarmouth Tourism & Business Improvement Area. “Young Asa”, with a mere 20 odd years of destination management experience in both Suffolk and Norfolk will doubtless continue to ensure that the Greater Yarmouth area prospers as one of the UK’s principal, popular coastal resort town and coastal areas. I for one am delighted that we will all continue to enjoy Asa’s support and his extensive knowledge and understanding of coastal resort tourism, in his new and well-deserved role.
Opportunities and updates
1. International Marketing Funding 2022. Visit Wales have announced a Wales International Inbound Tourism Fund (WIITF) of £400k available to Destination Management Companies (DMCs)/incoming operators, professional tourist guides and accredited English language schools, located and operating in Wales. Applications close 22 December 21: News Bulletin: Wales International Inbound Tourism Fund (WIITF) (govdelivery.com) and VisitBritain a GB wide £300k Destination Management Company and Inbound Tour Operator Amplification and Distribution Fund, open to DMCs and incoming operators only. Destination Management Organisations and Tourism BIDs are among a number of bodies expressly excluded from the VB scheme. Applications close midday 13 January 22: DMC and Inbound Tour Operator Amplification & Distribution Fund | VisitBritain .
The VB scheme, in particular, doesn’t sound much of a direct opportunity for traditional destination management organisations and interests but it might be useful to friends of, and stakeholders and partners within, the destinations?
2. Statutory Registration Scheme Consultation. The consolation undertaken in Wales by consultants started earlier in the year continues. Its findings are yet to be published. More to follow as soon as I hear anything.
Meanwhile, although the promised DCMS consultation on statutory registration in England has yet to be announced, we are now aware that the Minister and Officials have held at least one round table meeting (this week) with a selection of mainly local government and destination management interests, which DCMS described as being part of their pre-consultation evidence gathering process. Given that description, it seems less likely now that this pre-consultation evidence gathering process will be thrown open as a mini public consultation in its own right.
Whether it is opened up or not, it is now absolutely certain that we are still some weeks, if not months off seeing the promised formal consultation on statutory registration and that the consultation will give a number of considered options to choose from or comment on, rather than taking the form of an open-ended, tell us all you think we should know process. I do wonder if there is an opportunity here for anyone, not yet invited to submit evidence or taking part in roundtable discussions, to offer unsolicited evidence, if they so wished? If anyone has a burning desire to do so, or critical evidence to present, then please let me know and I will try and put you in touch with the correct officials.
3. Destination Management Review in England. Having failed to secure separate enabling funding from Treasury, DCMS continue to look at what, if any, funding might be available in the internal division of the headline CSR allocations. Again, it now almost certain than any announcement will not now take place until January, or possibly in this case even later.
It isn’t unreasonable to presume that any internal allocation is likely to be well below the amount proposed in the review (£51m over 3 years) or indeed the probably much low the figure sought by DCMS from Treasury (£20 to £30m perhaps over 3 years?). It is hard to see how a much smaller amount (say £3 to £8m PA?) would allow full implementation of all the review’s recommendations on a pan England basis but it might just permit some selective (competitive?) piloting of the new approach as a proof of concept ahead of the 2024-25 CSR deliberations? I have no evidence to suggest that is the direction of travel, it is just an educated best guess.
Not wishing to pre-empt any decisions or DCMS announcement in early 2022 but there may already be merit in some if not all English destinations looking now at what benefits, if any, might be gained from progressing some or all elements of the review’s recommendations on cooperative, self-help, self-funded basis. I suggest this, even while accepting that market failure issues are at the heart of the DMO impasse and that some core public funding for essential administrative functions, to help overcome the market resistance are mission critical. However, if public pump priming funding might not be forthcoming for any or all destinations, the first logical questions have to be, what is worth, or what can be salvaged from the review now? I don’t see waiting to find out what funding may or may not be available in 2024-25 as being a viable option for many destinations, save potentially perhaps for the odd lucky pilot, if indeed a pilot scheme is intended and it gets the funds to go ahead.
It remains clear to all in destination management circles that public, private, public/private sector partnership, Community Interest Company and other hybrid destination management structures remain vulnerable. Without some external investment into the deadly dull but essential daily administration, not all are going to survive to provide indispensable structure and form to the daily workings of a diverse selection of English destinations. I can’t help thinking it will cost far more in both lost opportunity costs and the sheer expense of putting things right after the event, than it would cost just to tweak and correct imbalances now, when at least you still have a reasonably well-established network of DMOs to work with.
Great British Railways’ Whole Industry Strategy Call for evidence
Great British Railways launched a call for evidence on 9 December running for 8 weeks until 4 February, sadly to my mind of which at least 3 or more are largely written off to the needs of the festive season. The “whole industry strategic plan” that will evolve from this initial evidence gathering process is to be considered by Ministers in late 2022 and be implemented sometime thereafter. The Strategy will be the first of its kind and scale in at least 30 years, setting the direction for rail transportation in Britain for at least the next 30 years, with waypoints (my description) 5 and 10 years out.
I have not yet had time to absorb the full detail or to think through the full implications and critically the opportunities. However, you don’t need to be a genius to know that the railways are currently important to many and vital to some leisure and business tourism and will in all likelihood, given mounting pressures on other forms of transport, set to become an even more important consideration, in a diverse, widely spread and often remote, geographically and economically isolated industry, that is totally reliant on the fundamental truth that its consumers travel to the product and not the other way round. No travel = no tourism.
It is probably also worth remembering the well-establish view that the tourism industry currently come at best a very distant second to mid-week commuter travel. That is of course largely due to the current strategic railway priorities. Recent events have thrown established travel patterns and immovable certainties in to doubt and caused some at the centre to question firmly established policies. This represents a golden opportunity to argue for a new and very different approaches for the purposes of recreation, leisure and associated wellbeing.
In the circumstance it would be remiss of the tourism industry, as a whole and for individual destinations, either reliant upon existing rail service now or in dire need of new and/or improved services to survive changing travel and transport patterns in future, not to take this opportunity to say so in the next eight weeks.
Based on a very quick scan the opportunities to make general “big handful” points around the need and opportunities that rail brings to say relatively remote coastal or rural destination towns and areas, or say to the increasing reliance the visitor economies of many towns and certainly Cities of any size have on rail connectivity, probably lie within question 3, long-term economic growth and question 4, levelling up and connectivity. Specific detailed tourism related issues for individual destinations probably fall into the same two question responses. You can of course judge whether question 1, 2 and 5 around: meeting (rail) customer needs, financial sustainability (for the rail network) or delivering environmental sustainability offer a better opportunity to make your point of view known. For my part, I often ignore the online option and submitting a narrative or part narrative response to some consultation questions and then giving answers to all the key questions I think they need to consider but didn’t necessarily ask.
I don’t think I have any choice but to do an Association response, so any general thought and more detailed contributions to aid me in this would be appreciated by the end of January. Meanwhile, wherever possible, I would ask others to consider putting in their own tourism flavoured responses, however short and to the point. Tourism is an outlier within the DfT’s agenda and not, as far as I am aware, currently that high on the new Great British Railways’ list of go to industries. If I am right about this, then past experience suggests that the unexpected weight of numbers commenting in a similar vein can makes as much, if not more of an impression than the reasoned voices of a few trade bodies representing the views of many.
My gut instinct is that this call for evidence and any consultation falling out of it in 2022 are, for once, of truly strategic importance to both the domestic and inbound international tourism and deserves to be addressed as such. I hope you would agree and react accordingly: Whole Industry Strategic Plan | Great British Railways Transition Team (gbrtt.co.uk)
More on the water quality issue at leisure and amenity sites.
I am copying you into a piece I have done for the UK Beach Managers Forum (UKBMF) on the twists and turns of recent water quality issues in England and Wales. These issues do impact on bathing water quality at some but not all designated bathing water site, all bar a couple of lake and a single new river site, being coastal.
Of the c 21.5k combined sewage overflows in Wales and England a significant proportion don’t discharge to the sea but to rivers, lakes and waterway, of which a good few are important leisure sites and amenities in their own right. For those of you with a bathing water in your patch who might at times have wondered whether they are actually worth all the faff and heartache attached. Be reassured by the recent announcement of a major EA and Ofwat investigation into major failings by most if not all Water Companies, that the faff has been worthwhile but not necessarily for the reasons you might have previously have believed.
It may be a little premature of me but I think it fair to suggest that the only thing really driving improved water standards at many, if not all our coastal bathing waters, was the regulatory need to meet impossible to ignore fortnightly, May to September EA water sampling. Many millions of pounds plus of investment has gone into improving the infrastructure to meet, at the very least, the minimum standards required at bathing waters and now it would seem consequently rather less, if any, elsewhere? Some of the pain of being a designated site can be offset by the knowledge that in all likelihood if you hadn’t been you might be stuck with the appalling low standards of the pre-EU Bathing Water directive days.
I am a tiny bit cross at the moment as you may tell, mainly because I, for one, feel duped. Colleagues have repeatedly said they had done all that they could and any remaining issues were largely down to others and I, like many of you, have taken at face value and publicly defended that position. The evidence circulating already points to the Water Companies cries of “it ain’t us, no longer” at best as being not strictly true. More at: https://ukbeachmanagementforum.wordpress.com/2021/12/02/more-on-cso-discharges-in-england-and-wales/
Ones to watch
Four relatively recent events in the news:
1. Bourne Leisure. Following Blackstone’s January 2021 majority acquisition, it has been announced that Rothchild’s have been appointed to explore the potential to dispose of Butlins, leaving Blackstone’s and Bourne Leisure’s management to, “focus their attention on”, Haven and the adults only Warner Leisure Hotels. Bourne Leisure, Britain’s biggest leisure business employing 14k staff at peak periods, saw sales halved to £507m last year (2020), which, despite an offset from staycation bookings, resulted in a pre-tax loss to the group of £152m.
In a normal year I would have marked this possible sale as one just to be aware of, given the group’s consequence to domestic tourism as a whole and the continued importance of Butlins, its smallest component, to the popular domestic offer. This of course isn’t a normal year and I am pondering whether the potential move may in time tell us a bit more about the recent fortunes of domestic tourism and give some clues to the direction some of the key players think it may be heading? It may of course simply be a major investment fund doing what they do and restructuring its acquisition in order to drive a decent and in this case early return?
Butlins is reported to have an estimated value of between £200m and £250 m. As such it is unlikely to be an impulse buy for anyone. It is to be hoped that if the sale does go ahead, it will be to a major player who has the will, vision and means, like Bourne Leisure, to continue to nurture and grow the business, rather than sweat the assets and brand as we have seen done on other occasion, elsewhere. I would argue that Butlins as a brand has an importance to the domestic market that is far bigger than its remaining portfolio of just three major sites, might at first sight suggest? Moreover, combined those three sites remain of significant importance to popular domestic tourism by value and volume and of course are invaluable, if not irreplaceable, assets in their host communities of Skegness, Bognor and Minehead.
2. Second and holiday home and tourism taxes in Wales (and beyond?). The Welsh Government have recently announced a funded, pilot scheme commencing in January 2022 and a further parallel national consultation on the issues surrounding second homes and short-term holiday lets. The pilot undertaken by Gwynedd Council will seek to establish what can be done under existing or amended planning regulation. Next steps confirmed to tackle impact of second home ownership on Wales’ communities | GOV.WALES . Meanwhile, the consultation conducted by consultants, rather than by a full public consultation, into the merits and demerits of statutory registration in Wales continues. Its findings, dependent on release date, may be illuminating not just in Wales but also for England’s during the promised DCMS consultation on the same issue.
In addition, as part of the three-year deal agreed last week by Welsh Labour and Plaid Cymru, a potential “capping of second home ownership” and the introduction of “local tourism taxes” feature in the list of 47 policy areas to be addressed by The Welsh Government. The list is wide ranging and includes some really big hitting and difficult issues that dwarf those of the tourism industry. It is not yet clear what, how and indeed if everything listed will be taken forward. Nonetheless, the fact that an issue is listed for consideration has to be regarded as significant in Wales and potentially beyond. As of course are the ongoing development in Scotland in these areas, where they are somewhat further advanced than in either Wales or in England. https://www.bbc.co.uk/news/uk-wales-politics-59416344 .
3. Second and holiday home issues and abuses in England. In Westminster a Lord’s questions in early November sought answers on the Government’s promised plans to tackle the misuse and fraudulent abuse of short-term holiday home rules and business rates and rate reliefs. It also sought confirmation of when the findings of the 2018 public consultation on these issues might be published. The Minister of State, Lord Greenhalgh’s short responses to a series of questions, individually and combined, are enlightening.
The responses suggest that Government are entirely supportive of genuine short-term holiday lets but now wish to limit known abuse by confirming businesses have actual met the minimum days offered and let criteria, before allowing owners to register as a business. How that is to be done, in practice, and other critical detail, like whether this will apply retrospectively to businesses already registered, perhaps be done annually going forward or apply to new applicants and/or once only, will doubtless be revealed when the extraordinarily overdue 2018 consultation findings are published and the plan emerges. It is hard not to conclude that if the minimum letting days rules where not so easily ignored or abused or so difficult to enforce, we wouldn’t have been having these discussions in the first place. The devil will be in the detail, hence perhaps the inordinate delay?
Lord Greenhalgh on a slightly different tack also restated Government’s support for the sharing economy. He acknowledged concern about “uneven regulatory requirement in it” and cited the commitment in the Tourism Recovery Plan to consult on the introduction of a tourism accommodation registration scheme in England. Let us hope it appears soon and its findings are published and progressed rather quicker than those of the 2018 consultation. https://www.theyworkforyou.com/lords/?id=2021-11-04a.1343.5
4. Local solutions and national lobbying angles. Last week East Suffolk Council (of Aldeburgh and Southwold fame) were the latest in growing list to publicly vent their frustration, at either the harm being done to community cohesion by second, holiday home and short term lets, the immoral and illegal abuse of the businesses registration and rate relief systems by owners, or elements of both. In East Suffolk’s case they have essentially resolved to use the very limited powers they have to make life as difficult as possible for those registered as businesses that are not actually businesses as they can. They are threatening to do things like withdrawing free public bin collection and free use of recycling centres, removing free resident parking permits and enforcing applicable business safety standards. E.I. treat them as any other business and not as residential properties that have quietly slipped into a claimed business usage.
How that pans out in practice, at what administrative or revenue cost to the Council to enforce and critically what the intended or unintended consequences for genuine, legitimately registered accommodation business will be, isn’t particularly clear (to me) yet. My initial reaction is that it’s a brave but potentially costly and ineffective solution that few other Councils could easily emulate (I suspect due to the nature and scale of the places involved identifying those gaming the system might be more easily achieved than in say Cornwall or a major urban destination?). Hopefully, if nothing else, it might reinforce the message to the Westminster Government that local political (in East Suffolk’s case Conservative led) and public patience is wearing paper thin in many popular tourist areas and destinations, a situation that can’t be allowed to go on unchecked for much longer.
From a lobbying perspective we and the current administration, in particular, should be asking ourselves, “where do the majority of second and holiday owner, including many operating in the shared economy, actual cast their votes in national elections?”. My instinctive is that it will be at their main residence, not at their second or subsequent properties. In many cases that will not be in the constituencies impacted by the current rash of holiday homes, housing and ownership issues. That may mean that any incumbent Government is unwittingly risking the wrath in a general election of the genuine local residents, if they now fail to effectively address this problem and soon.
It’s a different matter of course in local and other elections, in England at least, because it is technically legal to register and vote in local election in more than one residence you own, provided it is not in one Council area. That said there apparently needs to be a degree of permanence in your residency. If you’re claiming to let the property for a cumulatively long period that could be in serious doubt? I am not fully up to speed on the finer points of registration and local voting regulation. If anyone fully understands chapter and verse for one or more home nations, do please let me know what the essentials are. Let’s just hope that national, or even local election voting fraud isn’t one of the next potential scandals to unexpectedly fall out of the second and holiday homes debate!
I am jesting, I hope, about election fraud but I do seriously think the voting implications for National elections are at the very least food for some serious thought? Particularly, in the coming months as we try to reason with Government about mutual supporting solutions that maintains a healthy tourism economy, without killing off the communities that are supposed to benefit from tourism or without damaging the physical and social infrastructure that tourists ultimately come to enjoy in the first place. https://www.bbc.co.uk/news/uk-england-suffolk-59428954
British Destinations