Tourism keynote speech
Weymouth and Portland National Sailing Academy, Weymouth
I am very delighted to be here in Portland on what, if not exactly a summer’s day, is certainly a very British one.
When I took up my post as Secretary of State, I said I wanted to give a speech outlining the new government’s direction of travel in each of my key areas of responsibility, and I that wanted to do so in my first month. I insisted on including tourism on that list, because all too often it has been viewed as a poor relation in the government policy agenda.
Well, tomorrow I will have been a cabinet minister for exactly a month. Paternity leave nearly upset my plans but I am particularly pleased that I am here to give this speech today, and am most grateful to you for coming.
There is no more fitting place to be, because Weymouth and Portland perfectly illustrate the two most key priorities that the new government has for our great tourist industry:
Firstly, to make sure that hosting the 2012 Olympic and Paralympic Games leaves a lasting tourism legacy for the whole country and not just London;
And secondly, to give a once in a generation boost to domestic tourism by rediscovering and reinvigorating what UK destinations have to offer to our domestic market.
I will return to these two priorities in a moment. But first I want to talk about why exactly I consider tourism to be crucial to this government’s agenda.
Why tourism matters
So let me state plainly: tourism is critically important for this country.
It isn’t just our 5th biggest industry - with visitor spending of nearly £90 billion each year and an estimated direct and indirect value of £115 billion;
It isn’t simply an industry that generates more than £16 billion of earnings from around 30 million international tourists;
And it isn’t only a sector that employs around 1.5 million people in one of the few areas of employment that cannot be outsourced or offshored.
It is also a sector that is increasingly vital to the future of this country as we set out to rebalance our economy away from dependence on financial services and debt.
And one in which there is huge potential for growth. A recent report suggested that tourism could be the 4th fastest growing sector over the next ten years, indirectly and directly supporting a total of nearly 3 million jobs by 2020.
This matters, because we are currently facing some of the severest economic challenges of a lifetime. The last government bequeathed us £50 billion of unallocated spending cuts and the worst budget deficit in our peacetime history.
No one needs our economy and finances to be put back on its feet more than the tourism industry, whose 200,000 or more small and medium-sized businesses have to balance their books every year.
But I want to be open with you. The tourism budget, as all budgets in my department, will have to bear its share of the pain in the spending decisions that lie ahead. I don’t want to pretend this is going to be anything other than extremely difficult for us all.
But as we take these decisions, we must remind ourselves of the potential as well as the pain.
A tremendous national asset
I believe the tourism industry is one of our most undervalued national assets.
Which other country can offer our rich heritage and history - our cathedrals and castles, our stately homes and royal houses?
Where else can you see so much culture - our world-class galleries and museums, and the incredible concentration of artistic talent of the West End or the Edinburgh Festival?
And where else can you find the stunning countryside of the Lake District and Snowdonia, the ecological wonders of the Eden Project and the geological marvels of this heritage coast?
Not for nothing are we the 6th most visited country on the planet.
But underneath this remarkable potential are some real causes of concern.
Although overseas visitors spent more here last year than in 2008, the actual number of visitors fell by over 2 million, and VisitBritain is forecasting a further decline of 0.7% for this year.
In terms of international tourist receipts we have now dropped from 5th to 7th place in the face of ever fiercer competition from countries such as China and Dubai - countries that have established tourism as a clear priority.
The truth is that in competitive global markets you cannot afford to be caught flat-footed. Nor can you take success for granted. Which is why I want this government to be different in the approach it takes to tourism.
A new approach
I hope that, with the excellent work done by Tobias Ellwood in opposition over the last three years, our commitment to the industry is clear.
Indeed, back in March, George Osborne became the first Shadow Chancellor in living memory to dedicate a speech specifically to tourism when he spoke in Blackpool. He then went on to successfully block the last government’s disastrous plans for furnished holiday lets.
Now we need to deliver in government. So the first thing I have done is something that did not happen with the last government, namely to appoint a new Minister whose primary focus will be tourism.
In John Penrose you not only have someone who represents Weston-super-Mare - a constituency with vital tourism interests.
You also have someone with a strong business background, and in particular, someone with an impressive record in developing policy in business deregulation.
We all know that tourism is an industry that has been overburdened by red tape - with SMEs spending 6% of their time and 4% of their turnover complying with regulations.
John’s experience and commitment to allowing businesses to get on with what they do best will therefore be a major asset to the industry.
One of his primary responsibilities will be to coordinate contact with ministers from right across government in areas that vitally affect tourism - from taxation at the Treasury and infrastructure at the Department for Transport, to visas at the Home Office and regulation at BIS.
In particular he will be reviewing the web of quangos that affect tourism, and looking at whether support for the industry can be simplified.
And he will be working with Greg Clark, our localism minister, to see what can be done to improve the incentives local authorities have to invest in and support their local tourism industries.
Let me now turn to two practical projects with which this government wants to make a real difference.
The opportunity of 2012
Firstly, the opportunity we have as hosts of the Olympic and Paralympic Games.
Throughout the summer of 2012, the eyes of the world will be fixed firmly on our Games venues right around the country - including Weymouth and Portland Harbour.
Let me congratulate Weymouth and Portland National Sailing Academy on being the very first 2012 venue to have been completed, and on demonstrating time and time again that it is one of the jewels in the sporting crown of this country.
Given that Great Britain has been the most successful sailing nation for the last three Games in a row, I look forward to this becoming the arena for some of our greatest triumphs.
But I also know that hosting a global event in a small town will be a real challenge.
My department has a major role to play in helping you with your plans, which is why, right now, we have dedicated staff looking at the additional support you will need.
What you understand very clearly is that the Games must not just be about six weeks of fantastic sport in 2012.
In the words of Shakespeare, “Summer’s lease hath all too short a date” - and we cannot afford to let this priceless opportunity pass us by without ensuring a lasting economic benefit.
That means not only putting towns like Weymouth firmly on the international tourism map - which, having read about your ambitious plans, I feel confident will happen.
But also harnessing the full potential of 2012 to create a permanent tourism legacy - not just for London but for the UK as whole.
The whole of the country is paying for the Games; the whole of the country should reap the benefits. That means using them to create a sustained and sustainable increase in the number of tourists visiting our shores.
£1 billion worth of PR and marketing for Britain
Looking back at the tourism impact of previous Games, host countries have had some real success, but the overall picture remains mixed.
Barcelona’s hosting of the Games in 1992 helped propel the city from the 16th most popular short break destination in Europe to 3rd. As a percentage of the city’s total GDP, tourism rose from 2% to 12.5% in the ten years after the Games - although the impact on Spain as whole was more limited.
Sydney generated a boost in visitor numbers of 15% during the month of the Games and 11% over the year. Unfortunately despite a well-executed tourism strategy for Australia as a whole, 9/11 and SARS meant that the longer-term impact was limited.
Vancouver set out specifically to learn the lessons of Sydney as they prepared to host the Winter Games earlier this year, and we wish them every success with their ‘Keep Exploring’ campaign.
And as World Cup excitement reaches fever pitch this weekend (and the very best to Fabio and the team from the Department for Sport by the way), we should be looking to learn lessons from another great global sporting event.
Germany, by explicitly targeting people from countries like the UK who had never visited the country before, managed to climb nine places on the Nation Brand Index to reach 12th in the tourism rankings by the end of 2007.
My priority is to make sure that we get it right with 2012. It won’t be easy with the limited resources we have, but I want us to draw on all these lessons from other countries to produce the best tourism marketing plan that any Olympics host country has ever had.
That is why I am announcing today that I want to create a new fund with the goal of generating £1 billion worth of PR and marketing activity in our 20 priority markets in the years around 2012.
Of course, because we can only work with existing resources, this will only work if it is done in partnership with the tourism industry and, together with VisitBritain, John Penrose and I will be working hard to make sure that happens.
We will publish detailed plans as to how this fund will work by the end of September but, in the meantime, we would welcome your thoughts as to how best to make it work.
Boosting domestic tourism
If my first priority today is about getting visitors into the UK, the second is about getting British holiday makers to stay in the UK.
We all know what Britain has to offer as a world-class tourist destination. But its advantages are often overlooked by Brits themselves.
In 2008, the amount spent by UK residents on domestic overnight tourism accounted for just 36% of their total tourism spend.
Of course, the fact that we all can and do travel abroad is to be welcomed. But for every MOMA there is a Tate Modern, for every St Kitts there is a St Austell, and for every Surfer’s Paradise there is a Chesil Beach.
Over the past year or two, the downturn has forced people to look at spending more of their holiday time at home.
The result was that, last year, overnight trips were up by 7% on 2008, and spending was up 4%. Overnight trips to the seaside were up by as much as 4 million.
What is most encouraging is that, according to research by VisitEngland, more than half of people described their domestic holiday as better than expected, and 8 out of 10 rated their experience as very good or excellent.
And this has had a clear impact on future intentions, with almost half saying that, even beyond 2010, they expect to take more breaks at home than they did in the past.
This presents a clear opportunity for our industry. A chance to demonstrate that we can compete better - in the quality and value of our hospitality sector, in the innovativeness and creativity of our visitor attractions, and in our ability to harness technological advances such as digital platforms and social networking to drive enterprise and growth.
So today I want to issue a challenge to the industry. How can we increase the proportion of tourism expenditure that UK residents spend in this country to 50%?
George Osborne has asked me to tell him if we can achieve this, and if so how. So in turn, today I want to enlist your help in telling me and John Penrose what needs to be done to reinvigorate our domestic tourism industry.
This is not a new government target - because this is not something the government can achieve on its own. It has to be done in partnership - with both the government and the industry together upping our game.
That means a relentless determination to drive up quality, whether accommodation, hospitality or customer service. It means making sure we always offer competitive prices and value for money. Or simply make it easier to holiday at home by ensuring that, if I want to get a train up to Cumbria, hire a car, and find a place to stay in Ambleside for the weekend, I can do so easily in one place online.
That is why John will be conducting a study, travelling the length and breadth of the country to seek your views between now and the end of September, after which he will report back to me.
Let’s be clear about what achieving this 50% target would mean. It would mean a boost to the UK economy of as much as £7 billion, along with thousands of new job opportunities right across the country.**
We only have to look at what destinations such as Bath have done here in the South West, or at the ambitious plans that you have for Weymouth to seize the opportunity of the Games, to find evidence of what it possible.
My message today is that, if you are ready to do your bit, we are ready to do ours.
If you are prepared to strain every sinew to take tourism forward, we will give you a government that stands foursquare behind you. And together we will make sure that tourism plays its fullest possible part in putting our great country’s economy back on its feet.