Travelodge CEO Grant Hearn has today written to the Secretary of State for Business, Innovation & Skills, Vince Cable, to share a ten-point plan to how DBIS can accelerate the UK’s economy by unlocking the potential of one of the UK’s fastest growing industries (tourism).The letter follows on the back of a report commissioned by Travelodge which investigated how the UK tourism industry has performed during the longest recession since the Second World War.
Findings revealed UK tourism is a resilient industry that has outperformed the general economy over the last five years, led the way in terms of employment numbers and increased visitor numbers.
Despite being the fifth largest sector in the UK, tourism is one of the few industries that has continued to grow despite the economic crisis. Whilst GDP grew by 8% from 2007 to 2011, during the same period the tourism industry increased its revenues by 12.6% to more than £40 billion – representing 10% of GDP.
In the letter Mr Hearn makes a case that it is high time policy makers woke up and unlocked the true potential of one of the UK’s fastest growing industries.
The ten point plan calls for the Government to move tourism higher up its agenda, and for the sector to be given the status it deserves – by moving it from the Department of Culture Media & Sports to the Department for Business, Innovation and Skills. As tourism is crucial to economic growth the plan also includes a recommendation for a dedicated taskforce to be created, which is headed up by a tourism minister. This group will be tasked with delivering growth and creating a cross departmental cohesive strategy in cooperation with all tourism partners.
The report also highlights there are huge opportunities to grow tourism particularly when it comes to boosting overseas visitor numbers. Between 2007 and 2011, global tourism grew by 23.4% but during that same period, two million fewer overseas visitors came to the UK, a drop of more than 6%. This means the Government’s target for four million new overseas visitors by 2014 will be missed.
The letter also calls for more to be done to increase the UK’s competiveness, such as credible tax breaks and steps to reduce the bureaucracy behind the visa application process which keeps so many Chinese visitors away.
At present, Europe and the USA are leading the way in attracting visitors from emerging BRIC markets. For every one Chinese tourist who visits Britain, eight go to Paris and ten visit America. On average the typical Chinese visitor spends £1,600 whilst in the UK. China has a population of 1.3b but in 2011 just 149,000 citizens visited the UK, spending £240m. In contrast the USA attracted 1.1m Chinese visitors in the same year. As well as China, the Government needs to focus on the other BRIC countries (Brazil, Russia, and India) too; otherwise we will lose out on future generations of travellers.
Grant Hearn, Travelodge CEO said: “Our report confirms UK tourism has successfully weathered the recession to date and outperformed other key sectors which is great news. However as one of Britain’s biggest business sectors it deserves the chance to unlock its true potential. We have a real opportunity within our grasp which can play a significant part in helping our economy to recover; our lack of immediate action is costing jobs, growth and investment. It is in our national economic interest and this has to happen now. We need to be treated as a serious business sector.”
“Our ten-point plan is about awakening the potential of the sector and positioning tourism as a key element of a successful and sustainable economic recovery. I welcome an opportunity to discuss this proposal with Mr. Cable and his Department.”
Ufi Ibrahim, Chief Executive of the British Hospitality Association said: “Across the UK, thousands of hotels, tourist attractions, restaurants, businesses small and large, depend on the Government to back them. Our industry has the potential to create over 200,000 jobs in the UK by 2015. All the evidence shows that our tourism and hospitality industry is a success story in this recession. There are measures that Government could take which would create more employment and boost the economy – such as cutting tourism VAT to 5% and the ongoing initiative to improve the tourist visa process. It is essential that there is a more co-ordinated approach for tourism in government.”
Detailed below is Travelodge’s ten-point plan for developing a tourism industry capable of creating jobs and leading the economy out of recession to sustained growth:
1. Move tourism higher up the Government’s agenda, with the first step being to move the industry to where it belongs – the Department for Business, Skills and Innovation. DBIS has both the authority and responsibility to ensure that tourism can flourish.
2. DBIS to take responsibility for setting a national strategy and policy which includes introducing performance targets and better collaboration across the industry.
3. Reinstate a full time Minister for Tourism post.
4. Create a united tourism working party with the Scottish Government, Welsh Assembly Government, Northern Ireland Assembly and the Mayor of London.
5. Develop a dedicated plan and regional tourism fund to help the national tourist boards develop a “London and beyond” strategy that considers where investment in regional tourism can deliver the strongest results.
6. Assess the business case for regional tourism zones that enjoy allowances on capital expenditure and investment in new projects
7. Ring-fence funding for hospitality apprenticeships to drive growth and jobs in the sector.
8. Simplify the visa process for visitors from emerging markets, especially China. Some steps have been taken recently, which is good news, but a lack of further action will cost jobs, growth and investment.
9. Reduce the current VAT rate of 20% for the hospitality industry to 5% in line with our European neighbours. This will create 236,000 jobs by 2015, 475,000 jobs by 2020 and annually boost the economy by £150 million.
10. Target the investment industry especially companies who invest in pension funds and savings plans to invest in tourism business ventures as an alternative long term investment.