Month: September 2023
Annual conference DMO review delivery update
I am planning to post the full slide deck from our recent joint annual conference with the Tourism Alliance and Tourism Society shortly. Hopefully those who were able to attend will agree that it was an excellent event, that is certainly the feedback we received on the day. For those unable to attend l hope you will get some benefit from the full presentation pack when it is made available.
In the meantime, I do have access to the slides from the session, Delivering the DMO review in England which I chaired. It was a hybrid panel session involving two PowerPoint presentation and one verb summary, covering between them the national/VE, Destination Development Partnership (DDP) pilot and the Local Visitor Economy Partnership (LVEP) prospective. The session concluded with a searching and very enlightening Q&A panel discussion.
The presentations from Andrew Stokes (Visit England) and Ian Thomas (Newcastle and Gateshead Initiative) are accessible below. Regrettable the insightful observations on LVEPs from Deirdre Wells (Visit Kent and Visit Hertfordshire [both LVEPs]) were not captured in full, nor was majority of the panel discussion that followed. There are, however, my own recollections and a few scribbled note left to go on. Apologies to the three presenter as these are my recollection and while the words might not be theirs I hope the sentiment is a reasonable reflection of what was said.
For me the most telling comments regarding LVEPs were that the role is unfunded. However, even if that remains the case, as seem likely even if DDPs are eventually funded, the formal recognition and the authority(?) that the status brings is immensely valuable and should not be underestimated.
From the DDP presentation I was struck by nature and scale of the targets that the DDP pilot had been set, albeit that there are apparently still unanswered questions about the baseline years/level, with or without inflation etc. I was especially taken by the comments that Treasury’s continued insistence that none of the funding can be used for marketing or marketing type activities (conference subvention for example?). The very thing that many potential partners normally seek to engage with and are more comfortable and willing to partnership fund.
I noted nationally that very good progress continues to be made, but that not unreasonably the more obvious, easier fixes have generally been ticked off, progressively leaving the less natural partnerships and more difficult geographies still left yet to be done. I was especially taken by the inverse triangle diagram (slide 4 below) used to very simply and clearly illustrates how the new system is intended to work, with whom, at what level. In particular, it illustrates the critical role of the existing DMOs that sit between new strategic LVEPs and the consumer. I can’t help thinking that in the understandable rush to create LVEPs, in some places and in some circumstances, it was and still is all too easy to assume that LVEPs might somehow replace some or all existing DMOs or simply to overlook the DMO’s continuing critical role as the local interface with both local businesses and the visitors. Visitors who generally don’t visit convenient of constructed County, sub region or regional administrative areas but visit real place or “destinations” within them; many of which warrant appropriate levels of local management and coordination in their own right.
A strong plea was made from the floor for some form of more formal recognition of those DMOs working with (not for) the new LVEPs. That point was broadly support by DMO representatives in the audience and dually noted by the VE team in attendance. It was also interesting to note that it was said that in the case of the NE DDP a not dissimilar but almost opposite issue had occurred. In their case despite best efforts the focus had been on the funded DDP and it was the role of the LVEP in the level above them in the inverted triangle model, that was being either misunderstood, down played or ignored.
Just as LVEPs need functioning DMOs to deliver the strategic objectives sub regionally, DDP need functioning LVEPs to deliver the DDP’s regional objectives. The only thing that is truly uncertain is whether further DDPs will be given the green light as a consequence of a successful pilot and to a less degree whether or not the two pilots can and will continue in a meaningful form, should funding cease at the end of the pilot period? Only time and the views of a new administration will tell.
Sadly we did not have sufficient time to get in to too much detail about the potentially vexed issue of so called “white area”. Areas of tourism significance that may not be covered by an LVEP and/or a destination of some significance that might get left out of the system for whatever reason. The possibility is firmly on the VE radar and unless and until it becomes a, probability, then I am minded to suggest we simply continue to monitor it, at least while the LVEP rollout still has some way left to go. If any destination has a concern in this area and hasn’t yet aired it with VE directly or, at the very least, discussed the possibility of an issue with British Destinations, then please consider doing so now.
Any destination manager in England already working within a newly approved LVEP, working towards being involved in an emerging LVEP or, in some cases, even those unlikely to be engaged in the process by quirk of location, structure, scale or whatever, would be well advised to read the two presentations in some detail. Between them they clarify the actual intent and progress made around the creation of LVEPs and give a good feel for the realities of the DDP pilot. Thus, pointing us towards the many benefits and occasional challenges involved for all other LVEPs and DMOs in England should the NE pilot and a new West Midlands pilot funded from Commonwealth Games underspend, prove successful and, critically, then attract approval and funding need from a future Government to roll the concept out to all regions in England.
The two presentations between them form a relatively light and digestible briefing on the DMO reviews aims and objectives, progress to date and give a good overview of the DDP pilot which should be of genuine interest to all tourism professionals even if you are not directly involved in the vagaries of DMO management, in this case within England.
Conference programme published and further confirmation of VAT campaign position.
1. I am delighted to say that the final (save for the inevitable potential last-minute minor tweaks) has been confirmed for the joint Tourism Alliance, Tourism Society and British Destinations Annual Tourism Conference on Tuesday 19 September. It isn’t by any means too late to book to attend this high-quality, high-profile event. See more and/or book via: https://britishdestinations.net/annual-conference-19-march-2018/
2. Ten days ago, at the request of members I gave an update on the progress of ongoing tourism related VAT campaigns. Within that I gave my own analysis of why I didn’t think that there would be much movement on the current high profile call for reinstatement of VAT refund scheme for overseas visitors. Nor by default, what that indirectly tells us about the very limited prospect for the long sought after and much bigger prize of a permanent reduction on VAT on tourism services in general.
Broadly I suggested HM Government (HMG) as currently constituted, guided by HM Treasury’s (HMT) historic policies and fiscal rules was unlikely to move any time soon on reinstating the oversea VAT refund scheme and that even if the party in Government where to change at the forthcoming General Election, in all likelihood HMG as then constituted would still be guided by largely the same HMT officials, following much the same core principles and well-established fiscal policies.
Had I waited until last Thursday the 7 September, much of that could have been more quickly explained and critically unequivocally evidenced by the detail of a Westminster Hall debate on “Tax free shopping for international visitors”. Although far less formal and far less binding than debates in either House of Parliament Westminster Hall debates are indicative of general directions and critically any possible room for manoeuvre that there may potentially be.
The less binding nature of the discussions allow both parliamentarians and Minister/Shadow Ministers to be more consolatory towards any particular cause they may have sympathy with. When they don’t take that opportunity, rightly or wrongly that can be regarded as a very bad omen. Neither Victoria Atkin The Financial Secretary to the Treasury speaking with considerable authority for Government, or Tanmanjeet Singh Dhesi speaking for the opposition as a Shadow Minister (for Railways? but clearly speaking to a Shadow Treasury brief) gave much indication of hope of early resolution, whichever party might soon be in Government.
If the issue is dear to your destinations heart and I appreciate it isn’t a make or break issue for many of those majoring on domestic tourism outside major Cities and some international honeypot location , it is worth reading the full debate. The essentials, worth reading by all, are Mr Dhesi comments commencing at 3.40 which include the sentence” Never the less although we are not calling for VAT free shopping to be reinstated we believe that retail and hospitality business, particularly on our high street need the support of Government”. He then goes on to briefly outline what the Shadow Chancellor proposes a Labour Government would intend to do to support businesses in these sectors, none of which involves reducing VAT.
Victoria Atkin at 3.47 onwards sets out HMG’s and HMT’s position on what she rightly points out is the more complex issue of the VAT retail export scheme (VAT RES). Over the next 20 odd minutes, including some brief interventions from others, she gives the case for the government’s removal of the original concession and the reasons why the Government and Treasury disagree with the case made for reinstatement and the evidence submitted in its support of it by the tourism and retail industries.
Whilst disappointing, this at least gives a clear indication of what barriers now need to be overcome and how the case might be evidenced, to what standard. Her comments conclude just before 4.11 with the following which neatly summaries the current position: “We are committed to ensuring that the UK remains an attractive place to visit and committed to supporting our retail sector. None the less, the Chancellor is clear that being responsible with the public finances is a key priority. In that regard, VAT RES would subsidise a large amount of tourist spending that already occurs, arguably, without a tax relief in place. But we very much want to listen to industry and support long-term sustainable growth, so we will continue, as I say, to receive evidence and keep the policy under review. I am extremely grateful to my hon. Friend for setting this debate in motion”.
The full Hansard record of the debate can be found (timings mentioned appear as heading in the main text) at: https://hansard.parliament.uk/Commons/2023-09-07/debates/4058248E-76F5-45A8-812A-AC52A6318A37/Tax-FreeShoppingForInternationalVisitors
3. Before closing, can I again urge colleagues who have not yet signed up to attending next weeks conference to consider doing so. Beyond the quality of the content and speaker involved, the very broad church represented by the joint membership of the three organisations involved makes this an exceptionally valuable networking opportunity: https://britishdestinations.net/annual-conference-19-march-201
Making your small paying-guest-accommodation safe from fire.
Earlier this year the Secretary of State at the Home Office and Ministers in Wales met their obligation under the “Regulatory Reform (Fire Safety) Order 2005 (as amended)” to issue fire safety guidance specially for small properties by 1 October 2023. The target date was essentially for Minister, not for compliance to the guidance which is effectively already in force but I would suggest perhaps not as widely publicised or understood by either the consumer or the critically the provider as might or should be?
The guidance for the industry in Wales, issued in the closing days of July is, given it address the same base legislation, very similar (a tad more detailed/formal?), to that issued in March of this year for the industry in England.
The guidance, “is intended for use in small premises that have simple layouts, limited fire risks and a small number of bedrooms designated as guest sleeping accommodation for short-term lets, such as small bed and breakfast, guest houses and self-catering accommodation”. Small is defined as, and the guidance limited to: “single premises of ground floor, or ground and first floor, providing sleeping accommodation for a maximum of 10 persons, with no more than four bedrooms on the first floor, such as houses, cottages, and chalets” and to, “individual flats (whether within a purpose-built block of flats or a house that has been converted into flats), [and in the description for England only] other than unusually large flats (e.g. as often found in mansion blocks in London)”.
Any accommodation falling outside that description is covered by the existing and now complimentary guidance for larger or more complex layouts. That guidance, applicable in both England and Wales can be found here.
For me the key paragraphs in the both versions of the new guidance is:
- “The law applies to all short-term lets that are not let as a principal residence – even if you rent out a room in your home only once”.
and in Home Office version for England (but in practice applicable in principle to Wales too)
- “However you advertise your property for paying guests, you have a responsibility to make sure your guests are safe from fire”.
These are I believe messages that destination managers with the support of local and national trade bodies, key local agencies like the Fire and Rescue Services and Councils planning officers etc. need to promulgate more widely and the relatively recent publication of the new guidance is a useful tool and a vehicle to help them do it.
However, I don’t for one moment underestimate the difficulty of reaching a significant proportion of the burgeoning number of new smaller operators who don’t now necessarily engage to any degree, if at all, with local destination management and trade bodies. That lack of engagement and consequential lack of visibility (or is it the other way round?) is a separate serious issue and one that hopefully it is one that both the Westminster and Welsh Government’s will adequately address at some point soon through the introduction of some form of effective accommodation registrations schemes. Meanwhile, the likes of Airbnb are fortunately at least publicising and giving links to the new guidance, albeit these platforms are still taking no meaningful action and or accepting no responsibility for checking that “hosts” comply before promoting them.
As a minimum, if you have not already done so, I would recommend reading the new guidance to refresh yourselves and circulate it to all appropriate staff members and local partner bodies to help ensure a basic local common level of understanding of the current requirement and legal responsibilities for smaller accommodation providers. If local circumstance allows for it, I would also look to circulate the appropriate version of the guidance, or at least make it easily available to, local accommodation trade bodies and to any and all individual accommodation businesses that you have direct or indirect B2B communications with.
Whether making the public, who in my view at least, already believe and expect that this all to have been addressed years ago, more aware of what is now expected of accommodating provider, is questionable. Perhaps something for more thought and possible coordinated action at a later date?
Although the 1 October target date was for Minister to have issued the guidance, not implementation by operators (already in force), it may prove a useful hook to hang the distribution off? To meet the 1 October target date set out in legislation for England and Wales, Minister in have now/recently issued new guidance on “making small paying-guest accommodation safe from fire”. “The law applies to all short-term lets that are not let as principal residence, even if you rent out a room in your home only once”. The new guidance can be found at………..
Tourism Vat Campaigns Update
Colleagues have asked me if there have been any definitive movement on the VAT on tourism campaign’s and in particular, calls for the urgent reintroduction of VAT free shopping for overseas visitors. Calls that have been made by both Tourism trade bodies and major tourism business and echoed during much of the early summer by an impressive list of major high street retailers.
The answer I am afraid is no not yet and while we may all see the clear logic in the case for HMG to give up the VAT generated by a reduced number of overseas visitors now, in order to reap the arguably much larger benefit tax, economic and employment benefits to be had by attracting a far greater number of visitors in the future, it is neither an easy sell to HMG in general or the Treasury in particular, who between them have the unenviable job of balance the books today and tomorrow, as well as keeping an eye on the prospects for future months, years and decades. Treasury’s view I suspect can be summarised by the old adage, “a bird in the hand is worth two in the bush”?
VAT is one of the simplest taxes to administer and collect and one of the more difficult for either customers or the businesses selling the product or service to legally avoid or illegally evade, unlike some of the other taxes streams that the case we are making offers as a bigger combined alternative source of tax revenue. Potentially the greatest immediate issue, especially in financially constrained times is that the VAT refund system in most cases, by dint of processes sees HMT refunding VAT (hopefully genuinely) paid by customers to retailers, many weeks or months before those retailer pays it on to HMT. Initially this could be a sticking point as it would generate a multimillion-pound hole in receipts, although in time it would simply become part of the receipts in advance/arrears balance that the rest of the tax system generally operates within.
It is perhaps also worth noting the political background. The refund scheme was scrapped when the current PM was Chancellor. He will have a very clear understanding of the original rational and a far greater degree of personal political capital invested in that decision than if it had been made under someone else’s tenure. A decision to reinstated the refund scheme was made during Kwasi Kwarteng short but ill-fated term in office as Chancellor. That decision was never implemented because it, along with a number of other unfulfilled tax related changes it was reversed before implementation by the current Chancellor immediately after he took office. Consequently, Jeremy Hunt may also reasonably be seen as having personal political capital invested in the decision process, rather than being a bystander to it. Given that three conservative Chancellors have been involved in relative short order in removing reinstating and again removing the concession, the current Government as a whole could also be seen to have rather more political capital invested in an otherwise minor tax issue than might be the case in any other circumstance.
I may be wrong but however sound the arguments may or may not be in support of reinstatement of tax-free shopping for overseas visitors the political baggage currently attached may outweigh any but the very strongest of cases made? If I am right then only time and a major change of key personnel within the current administration, or a complete change of Government, and therefore a fresh unimpeded look at the pros and cons, would offer any real prospect for reinstatement and then perhaps only in the medium to longer term.
Much the same can be said for the longstanding campaign for a reduction in the rate of VAT on tourism services in general. If we can’t get traction for the special case for overseas visitors whose tourism activities are generally much prized by HMT, then there isn’t much hope for the introduction of much wider at the point-of-sale reduction on VAT for both international inbound and the sadly far less prized domestic tourist or day visitor.
There may be far less political capital invested in the general VAT arguments, however the current PM as the then Chancellor did temporarily reduce VAT during the immediate Covid 19 recovery period and, as HMT is fond of pointing out, very few businesses passed that reduction on to customers in order to stimulate greater trade and higher overall tax returns as the underlying case for VAT reduction on tourism services promises. This of course flies in the face of the fact that these were unprecedented times and most business needed the higher percentage return on whatever business they could generate, simply to survive to trade another day.
Using the Covid 19 VAT reduction experience to evidence the befits or disbenefits of reducing VAT on tourism services is at best unsound. Even if there were to be a change of leadership in the current administration post General Election or an entirely new Government, we should not under estimate what some see as Treasury orthodoxy and other might categorises as Treasury pragmatism. Some proposals, however sensible they may seem simply carry along too many attached or unintended consequences with them to make them practically or economically viable. Having sat on the fringes of the ongoing VAT on tourism services argument for the last 30 years my hunch is this is that a general reduction on VAT on tourism is one of those, “too difficult” area, that any government will not willingly touch, particularly against the advice and established wisdom of Treasury Green Book rules and direction. Whereas VAT free shopping for overseas visitors does at least have some successful longstanding history behind it and therefore hopefully some reasonable chance of success beyond the next General Election.
On a similar vein, I should have made it clear several weeks ago that efforts by the Tourism Alliance to argue against the substantial increases in visa fees and associated charges for overseas visitors and those living and working in the UK were roundly rejected by the Chancellor. His letter in response to the Alliances joint letter to him on the matter can be seen here:
Again, this something a different Chancellor or a different Government might in due course choose to address. So, while there is still potential for a rethink, it isn’t going to happen immediately or impact as soon as we might wish or need it to.
If you haven’t already done so, please consider booking for our joint tourism conference with the Tourism Alliance and Tourism Society on Tuesday 19 September. A first-rate group of speakers will be addressing a range of issue of immediate interest and concern to a wide range of tourism professionals. The nature audience also makes this an excellent event to network with likeminded colleagues from outside your own immediate professional networks. More at detail and booking links at: https://britishdestinations.net/annual-conference-19-march-2018/
British Destinations