Oral evidence: Tourism, HC 143

Oral evidence, 27 October 2026.

Witnesses

Anthony Breach, Bernard Donoghue and Alistair Handyside.

Chair

Welcome to this meeting of the Digital, Culture, Media and Sport Committee. Today, we are holding our second evidence session on tourism. For our first panel, I welcome Anthony Breach, director of research and policy at the Centre for Cities, Bernard Donoghue OBE, director of the Association of Leading Visitor Attractions, and Alistair Handyside MBE, executive chair of the Professional Association of Self-Caterers UK. Gentlemen, thank you very much for joining us this morning. It is really good to have you all with us. Before we begin, I need to remind Members to declare any interests at the point they ask a question. I will kick off. To start with you, Bernard, we hear lots of discussion about the Government’s proposed overnight visitor levy. There are very strong feelings both for and against it, including on this panel. What problem do you think it is attempting to solve? Will it be the most effective way of addressing that?

Bernard Donoghue

I think it is attempting to solve three distinct problems. The first is the paucity of local government finances over several decades. Local authorities have seen a failure to fund not only their statutory services properly but also the voluntary services—those non-statutory functions such as tourism and culture. This presents an opportunity for new cash to local authorities and to regional mayors. The second is, I suppose, precedent, in that many countries overseas, and indeed many cities, have this model to get more money back into their own visitor economy. Some are more successful at this than others. For example, when it was proposed that Amsterdam would have a city tax scheme, all the money was to be hypothecated for the visitor economy, yet Visit Amsterdam, the tourist board, has never seen a penny. There is a difference between intention and delivery. I suppose the third is that all of us in the visitor economy from whom you are going to hear today are nothing if not realists. We realise, particularly in light of tomorrow’s Budget, that the overnight visitor levy is likely to be enacted, with a push to devolution across England in particular. Particularly from our perspective at ALVA, we are keen to see any new proposal made as functional, efficient and effective as possible, for not only the broader economy but the visitor economy as well.

Chair

Thank you. Alistair, do you agree that those are the problems that the Government are setting out to solve through the overnight visitor levy? Do you think it will achieve that?

Alistair Handyside

I broadly agree with Bernard, although I hope that questions on the method of delivery, how the money is spent and how it is collected will be asked during this session. That is where the real challenges lie.

Chair

Thank you. Anthony, do you have anything to add?

Anthony Breach

Thank you, Chair, for the question. I recognise a lot of the issues that other members of the panel have suggested. They are clearly part of the wider context for this reform. I think the core of the argument that the Government are making for this is that it is a step in their programme of devolution to improve both local and national economic growth. If you look internationally, we are an exceptionally centralised rich country for our size. We are by far the most centralised country in the G7, and only about 5% of our taxes are collected at local level compared to about 14% in France and 24% in Japan—both places that have a visitor levy. The implication is that that then means that local government has few incentives to grow its local economy. If it increases the size of its tax base, creates more jobs and increases wages, ultimately that all flows up to Whitehall and does not increase resource for local government in particular. That adds up to quite a big national problem, as well as being an individual local problem. Our expectation and hope is that the visitor levy is an important first step in moving towards a more typical local finance system similar to those we see in other countries. I think for the purposes of this debate and Committee, one important implication is that we need the visitor levy to be as pro-growth as possible and to provide strong incentives for mayors to support the visitor economy and increase the number of visitors in their cities.

Chair

That is really helpful. Bernard, I go back to you. When you set out the objectives and certain problems that you thought this levy was attempting to solve, there was not a positive economic case among them. It was all a degree of political inevitability about giving strategic local authorities this power. Apart from political support, do you see there being a positive economic case in the same way that Anthony set out, and that that could be a good reason for introducing this levy?

Bernard Donoghue

Yes, potentially. Tourism is the UK’s fifth biggest industry and third largest employer. It creates more jobs at all skill levels more quickly than any other sector in this country and is the third largest employer in every UK constituency. If you were planning to organise a growth strategy for the fifth biggest industry, you would not start where we are now. We do not have a Government tourism strategy. Despite one having been written for the last two and a half years, it has not been published. There have been three examples in the last 10 months of policies emanating from No. 10 and the Treasury affecting tourism, but they are all completely unlinked to each other and they have been created in isolation from the tourism strategy.

Chair

Which are?

Bernard Donoghue

First, the Treasury proposal to charge overseas visitors to enter our free national museums and collections. That has now been vetoed, wisely. The second is the overnight visitor levy. The third was the decision to cut VAT for visitor attractions over the course of the summer. Now, if you had a normal tourism strategy, they would all be elements of that, but we do not, so they were all determined in isolation from each other. That is no way to grow Britain’s fifth biggest industry. Coming back to your particular points, yes, if an overnight visitor levy is introduced with care, consultation and caution, the money emanating from it, if hypothecated and reinvested back into the visitor economy, could be transformational.

Chair

Alistair, we heard a number of reasons why your fellow witnesses think that a levy could be a good idea. PASC UK opposes the levy in principle. What evidence would you need to hear to change your opinion on that?

Alistair Handyside

I will again pick up a couple of things that Bernard said. We do not have a visitor economy growth strategy. We have a situation where domestic rural and coastal tourism are in significant decline, with an almost 30% reduction in overnight stays since 2022. Introducing a levy into those areas will have a disproportionately different impact than if you introduce it into cities and metro areas, where visitor economies are growing. This is why we are absolutely adamant that robust economic impact assessments must be made. If you ask the same questions of different areas, you will get different answers. For us, the No. 1 ask is that we do not skirt this and go through too quickly, as we did in Scotland and Wales. We must have a proper, robust economic impact assessment and political analysis of this before implementation.

Nigel Huddleston

I refer honourable Members to my declaration in the Register of Members’ Interests. I am also a former tourism Minister, I used to work in the sector and I go back quite a long way with pretty much all the panellists we have here today in terms of interactions. I should also declare that Alistair organised a trip with PASC for me down to the south-west in my shadow Secretary of State role earlier in the year. I am also an active member of multiple APPGs. I hope that that means I know what I am talking about here. Let me start off with my view and then come to you. I think this is a ridiculous idea. I have yet to see any evidence whatever that you can support an industry by taxing it more. That is my point of view, but if it is going to go ahead—Bernard, I think you are right that it will be in the Budget tomorrow—we all want to make sure it is done in the most helpful or least destructive way. To that extent, there has been a debate, a consultation and lots of views and opinions about how the levy should come in, whether it should be x pounds per person per night, or a percentage levy. First, what would you like to see? What would your preferred option be?

Bernard Donoghue

I suppose that there are two answers to that. In our submission, we put that it should be a percentage rate so that it would be a progressive taxation, if you like. However, the easiest to administer would be a flat rate of x pounds—so, something like £4 or £5—but that would be disproportionate, according to whether you stay at Claridge’s or a Travel Inn. Our preference would be a progressive rate.

Nigel Huddleston

Alistair, what is your view?

Alistair Handyside

Absolutely. I keep deferring to Bernard here. It is so regressive to have a system of per person per room per place per night. Our pricing varies hugely from summer to winter. We are trying to build winter. A percentage goes down as an amount over the cost, whereas a flat rate stays up and can become enormous. For example, in Wales, it went from a 3% or 4% tax to a 20% tax. The regressive nature of a per rate is less favourable for us.

Nigel Huddleston

The other element is that we are talking about and focused a lot on tourism here, but the reality is that this will be imposed on all commercial accommodation types—absolutely everything. It will therefore impact not just tourism but business travel, visiting friends and relatives, carers staying overnight to look after relatives, and absolutely everything. Do any of you have a comment on this? Do you think it is right? Will it help the economy?

Bernard Donoghue

I do not think that you can distinguish between different constituencies or demographic types. To come back to your first point, again if you were organising the growth strategy of Britain’s fifth-biggest industry, you would acknowledge the fact that UK tourism plc at the moment is internationally uncompetitive. We are one of the most-taxed destinations in the world. This just adds to that tax base. It makes us uncompetitive. Also we have seen that, when successive Governments have added tax burdens, customers have responded. For example, we no longer have tax-free shopping. That is an act of economic self-harm. The quicker that this Government reintroduces that, the better. We have VAT at 20%. It is often argued that we should have an overnight visitor levy because so many other European countries in particular do as well, but they do not have 20% on their tourism economy. The vast majority have either 10% on their tourism economy, including accommodation, or less than that.

Nigel Huddleston

Or, indeed, it is a deliberate strategy to reduce over-tourism, which is exactly the point. I know some colleagues will come in on affordability and the details of the mechanics later on, so we will park some of that for the moment. Alistair, looking not so much at who will pay and the arrangements over the imposition of the admin—my colleagues will come to that—how will it really be covered? Is it possible in this day and age where we often have packaging, all-inclusive or B&B, to say which bit is the accommodation versus which is not? Will this not just cause confusion and difficulty for those administering it?

Alistair Handyside

With any of these tax systems, I have great sympathy when they impact one sector more than others. If you have food and beverages, how do you separate those? I understand all those challenges. The way I would look at it is that, at the end of the day, the consumer is less worried about how something is componentised—I made up that word. They are looking for what the price is. With the CMA rulings, we have to show a final price, so it will become somewhat invisible. We have analysed our data very closely for the last three years, and prices have not gone up by inflation. In 2028, if you in Government say to us that we must add 5% to our business costs, because that is what it will be, and we want to cover inflation, we will be trying to put up our prices by almost 10%. I would defy any of you in this room to find a business that can put up its prices by 10% in a year. This will end up being paid and absorbed by the businesses. This is a business tax, make no mistake. Before profit, before anybody takes any money out of it, it is a business tax. Business taxes will hit investment, jobs and local economies.

Nigel Huddleston

Of course, there are many arguments as well, such as in the submissions, for exemptions for very small pitches where you have tents, and those kinds of things. That creates real complexity in the implementation of a tax system there, but I know that that will all be considered. Bernard, you mentioned as well that we are already one of the highest taxed countries in the world for tourism, which I think is beyond question. I have a question for all of you, and I will make sure Anthony has an opportunity to answer here. Bernard, you articulated that there is no clear strategy. There are different Government Departments, responsible for different things. The taxation element has the business Department involved. There is DCMS involvement, the Cabinet Office coming in and No. 10’s views and opinions all the time. Do you think this speaks, across Governments—let us be fair—to not understanding and not prioritising tourism as the important industry that you have said it is?

Bernard Donoghue

Yes, absolutely. I will add to that. It has just been clarified for us that the overnight visitor levy would also be subject to VAT. Ultimately, you would have a tax on a tax on a tax on a payment. That makes no sense whatever. To go a little further, I first appeared before this Select Committee 29 years ago, when DCMS and indeed the Select Committee were first created. In those 29 years that this Committee and its predecessor Committees have been standing, we have had 26 tourism Ministers. It is not just a case of not having joined-up government; there is also a really strong case here for no corporate memory about the importance of tourism across all Government Departments.

Anthony Breach

I recognise a lot of the frustrations in the comments made by other members of the panel. You see this kind of churn not just in tourism but other policy areas as well. One thing to reflect on in the context of devolution is that this is being devolved to mayors, who will be responsible for their place, and will take a place-first approach to the implementation of this levy. I think that should help resolve some of the problems presented by members of this panel. The mayors are all very conscious of the impact of policies that they make on jobs, investment and the economy in their local area. If this becomes the single most important revenue stream to them, that will focus minds even more.

Alistair Handyside

I just think this is the wrong tax at the wrong time. I appreciate that you can see support for it in metro areas, where the scale would be dynamic, but Manchesterism does not work very well in east Devon. It really does not translate in the scale we would raise. My final worry is that I worked with Nigel as tourism Minister before, during and after covid when we were trying to move business out of London. That has been Government policy for 20 years that I have known about. We are about to give London the biggest marketing budget over all the small counties around the country. Who wins—Visit London or Visit East Devon? That is just to give you an example.

Jo Stevens

I just want to follow up with one question. What you have all said came across very clearly in terms of there being a big difference whether you are a city or outside cities. Let us take for the moment that this is going to happen and it works in cities. Bernard, you said it needs functionality, efficiency and effectiveness. Is there a stand-out city anywhere, not necessarily just in the UK but elsewhere, that you think does this really well? Where would you point to?

Bernard Donoghue

I would point to San Francisco. There, the money is well administered. San Francisco also has a statutory registration scheme for accommodation, which is crucial. That is a first step for the implementation of something like this. If we do not know who is providing paid accommodation, we do not know who to tax. They have a statutory registration scheme, and they also go one step further: they hypothecate the moneys. It is 100% ringfenced to be reinvested back into San Francisco’s culture, heritage, nature and transport. I know that the Treasury hates hypothecation and I understand all the reasons for that, but this is one of those opportunities to reinvest back into the reason that most people are in accommodation in the first place.

Mr Alaba

Good morning to you all. I declare an interest. Prior to coming to this place, I worked in hospitality. I ran, owned and consulted in businesses across the country, and in London as well specifically in terms of my operations. I now represent a coastal community, which I will come to in a second. First, what effect would the overnight levy have on the affordability of domestic holidays, the UK’s competitiveness and visitor demand?

Anthony Breach

Thank you for that question. Our starting point on this is that it makes sense for mayors individually to choose what is right for their area. As Jo mentioned just now, it might work for a large urban area and a mayor may come to that conclusion, but it may on the other hand not work for a coastal community. The mayor will take that decision, and it is entirely appropriate that we have different responses across the country because we have these very different tourism markets. I would expect any local economic assessment to identify both the pros and cons of introducing this levy within that context. When you look into the evidence on the elasticity of visitor trips between business trips and tourist trips, you see that tourism trips are considerably more elastic than business ones. People are more price-sensitive. It also seems to be the case that elasticities for domestic travel are higher than for international travel. Once people have chosen a destination abroad that they want to go to, they are pretty likely to continue to want to go there, even if there is a small increase in price. Domestic visitors again seem to be more price-sensitive. Therefore, I would expect that, especially coastal communities where cost- competitiveness is a key part of their offer, the visitor levy might not make sense in a way that it might in a larger urban area.

Bernard Donoghue

I entirely agree with Anthony. Anything that puts the price up, particularly in the cost of living crisis, is something that UK citizens will think sensitively about. We are now in year 5 of the cost of living crisis. Only earlier this month, we saw the lowest consumer confidence index since the end of covid. People are making really tactical decisions about how they spend their leisure pounds and leisure hours. Nowadays, particularly for visitor attractions, the competition is not between one visitor attraction and another, but the average family in the UK has a disposable leisure budget of £100 per month. That is a family of four going to a cinema once—or out to dinner, on a day trip, or having a subscription to Netflix, Amazon Prime or Disney+. Competition for the leisure pound and leisure hour has become more competitive, with people making really tactical decisions. If anything looks like it will make the price of a staycation or domestic holiday more expensive, and the ease to book abroad more engaging and enticing, people will do that. If your question is, “Do you think this will have a detrimental effect on domestic tourism?”, from a price point of view it undoubtedly will.

Alistair Handyside

Thank you for your comments earlier about the differences in markets. I will not repeat that it will have a greater impact on rural and coastal areas, primarily domestic visitors and not business stays, which are much more sensitive. I will go a bit into the technology on pricing elasticity of demand, or PED. This happens in every business, regardless of whether we are talking about hospitality. You work out how much you can put up your prices by how much it will push down demand. In a tiny business like ours, that is an argument between my wife and me. She wants prices up; I want them down, otherwise we will not fill up. Airbnb has algorithms and AI, and every bit of it is based on that argument. Up puts prices up and demand down. UK Hospitality Haven in Lichfield has done the work to show that for every 1% increase in price in our sort of area, rural and coastal, you get a 1.25% decrease in demand. So a 5% increase in price, which I genuinely do not think we can pass on, would result in a 7.5% reduction in bookings. That is why I say we cannot pass this on. We will have to absorb it.

Mr Alaba

Anthony, you talked about the fact that things are very centralised in the UK economy, so how do you incentivise local government to invest, which then obviously improves the experience for visitors? What do we do? Alistair, you talked about feasibility. I link into that SIC codes and that kind of stuff, so that a case can be made to the Treasury. You also mentioned the need for a proper impact assessment. In a roundabout way, how do local economies and councils support an industry that is important to them, where we know there are challenges of investment and finances at local government level—touching on Bernard’s point right at the top? What do they do? How do they try to make the case?

Anthony Breach

I think this has to be the first step in a longer journey towards fiscal devolution. We are going to hear what is in the fiscal devolution road map tomorrow with the Budget. I hope that will set out not just the visitor levy and the proposals already announced, but a longer period beyond the spending review of increased fiscal autonomy for local government. That will have to entail a closer connection between the economic base of a place and its local government across far more than just tourism. That will be across things like the industrial space, domestic property, income tax sharing and so on. That will all be really important if we want to provide a broad set of incentives for places to help grow their local economies. We know other countries around the world have these sorts of levies and taxes. We know in particular that the big cities can absorb this kind of levy, and it can both provide the funding to help finance larger schemes such as the new Beatles museum being developed in Liverpool, and change incentives in the larger scheme to help the mayor and local government support more hotels being built, street cleaning and improvements to the visitor and residential experience in places visitors are likely to visit.

Mr Alaba

Alistair, can I come to you quickly with a slight tweak on that question? I understand your journey. I ran businesses. It is important with regard to taxes how that can affect profitability, and you want to survive and thrive. If the local authority, for example, could ensure it, what is needed to earn your trust in how a visitor levy could be spent wisely so it will support and sustain your industry? Is there a case to be made for that?

Alistair Handyside

Regrettably, I am not sure that there is because, like many in this room, I do not believe that we would get hypothecation or ringfencing. Without a guarantee that the money would be spent collectively and wisely, I do not really want to go forward with that. It will cost my business somewhere in the region of £20,000 a year. I think I could invest that £20,000 on extending the visitor experience better than the local council could—with respect to the local council, which is very supportive of tourism.

Mr Alaba

Thank you, I think I have veered into one of my colleague’s questions so I will end it there.

Jeff Smith

Anthony reminded us by implication that this is a permissive measure. It is a voluntary thing for areas to come into. If we want to give cities like Manchester—my city, where a visitor levy has worked well—the opportunity to raise a levy, is it not the right approach to have this kind of permissive measure? If rural and coastal areas do not want to take it up, that is fine. If the big cities do, that is up to them. Is that not the right approach?

Anthony Breach

I completely agree with that, personally. We are already seeing some mayors saying, “Thanks, but no thanks; this is not right for my area.”

Alistair Handyside

I think it comes down to there having to be, as part of the process, robust economic impact assessments and the local council consulting with citizens in their area, rather than what has been suggested that there is a fast track to this. You need proper economic impact assessments and local consultations because you need local solutions to local challenges.

Jeff Smith

Following from that, local authorities will have different spending priorities. In addition to my day job, I chair the People’s History Museum in Manchester. We are very excited about the prospect of hypothecated funding for the culture and arts scene in Greater Manchester. We think we would be one of the beneficiaries of that—if it is functional, effective and efficiently operated.

Tom Rutland

Good morning. I want to focus a little now on the potential impact on tourism business, which we touched on already with one of my colleague’s questions. Primarily for Bernard and Alistair, how should the Government assess the impact of the levy alongside the other tax, regulatory and employment cost pressures currently facing tourism businesses?

Bernard Donoghue

The first thing is to be transparent about how the current UK Government tourism strategy is being created. We have heard no news about it for several months. When I was at VisitBritain, I managed to write a UK tourism strategy in three months. This Government have had two and a half years and, apart from isolated policy proposals, we have yet to see anything comprehensive or useful. The second thing is that the taxation burden needs to be at the heart of that, being very critically honest about our international competitiveness against countries such as Spain, Italy, France, Germany and the USA, and what the tax burden actually is and if it could be relieved at all before adding a further tax that consumers are likely to be affected by in terms of their preferences; businesses will certainly be affected by it because they may not be able to transfer it on. Having a critically honest appreciation of our international competitiveness, particularly in terms of taxation, is the first step to understanding whether this is a useful further tax step.

Alistair Handyside

I think we have to look at it in the round. Most of the MPs here are very familiar with our cumulative impacts and DNA. That is what has been thrown at us since covid. This is not looked at in the round but in silos individually. It has to be looked at as part of a cumulative impact. We do not have a visitor economy growth strategy, as Bernard has said several times. We were hoping for a domestic target. We have an international target, but not a domestic one. Domestic tourism, particularly rural and coastal, is in freefall. So, Nigel, would you want to be the tourism Minister writing a visitor economy growth strategy with no tax changes, no regulatory changes, no budget and bringing in a visitor levy on top? That is not a gig I would want to write. As Bernard has alluded to, we should not be starting from where we are today. We should have a strategy and then, if it was part of a strategy, we might be looking at it very differently.

Tom Rutland

Going from the strategy to the ground-level impact on much smaller businesses, some of which you represent, what would collecting and reporting the levy involve in practice, particularly for micro-businesses and operators that are managing only one or two properties?

Alistair Handyside

There is no detail yet, but we have the examples of Scotland and Wales, which I suggest the Committee should look at very closely, perhaps if only as a case study in learning how not to do it. We think it is likely to be quarterly. Making Tax Digital is quarterly. That would be another burden when we are told by the Government that they want to cut the regulatory burden by 25%. They would have to report quarterly. You could be reporting quite small sums of money as a small business. Someone has to organise the time to collect it and remit it, and someone has to receive it and check that it is correct. You have to look at the administration costs of an extra tax. It is a whole new tax; it is not done by any currently existing system. It will have to be built, managed and checked, all of those things. We are being asked by Treasury to report on how many hours that might take and we are in the process of doing that, but it is another burden on very small businesses that already have to deal with all of that. I think we have to start treating small businesses with a bit more respect. They do not ask for a great deal but a great deal is demanded of them. It will be another administrative burden on top of the costs to which I have already alluded.

Tom Rutland

On collection and reporting, is there an international example that works well or better than others?

Alistair Handyside

No. We have looked to try to find good examples. None of them is perfect. It is a very complex tax to do. Colleagues sitting behind me will be giving evidence different from mine because it will affect their sector differently. If I was representing them I would say that; if they were representing me they would say what I have said. It is a very complex tax. It sounds dead easy: just charge the price of a cup of a coffee on a stay and we will all have lots of free money. It is much more complicated than that. You must do robust economic impact assessments, not take shortcuts or race this through legislation. It needs serious contemplation.

Tom Rutland

Would anybody like to come in on this question, maybe Bernard first? Who should be legally responsible for collecting and remitting the levy where a booking is made through an online platform: the accommodation provider or the platform?

Bernard Donoghue

That is a very good question. I do not think there is a lot of clarity because that happens in different ways in different countries and different municipalities. That is the kind of clarification we would love from Treasury. Rather than an overnight visitor levy being presented—this may be a crude summary—as a kind of smash-and-grab raid on the visitor economy to give local authorities free cash, a more considered approach about legal entitlement, legal insurance and who has technical responsibility is absolutely required quickly. If the legislation is going to come through, as we suspect it might, in the next couple of days, a good bulk of accommodation has already been sold for next year, so that will not be taken into account in new legislation. Anything we are talking about has to be at least two or three years in advance of that—this is not stonewalling—in order to have exactly the kind of measures and functionality in place to deliver this for the benefit of everybody.

Alistair Handyside

And everybody has to build the systems to do this. If you have a complicated system by which every mayor is choosing a different rate, different exemptions and different classifications, anybody who operates on a national basis, or across two regions, has to build that into their booking systems. The administration on platforms can be absolutely enormous the more complex the system is. I am not stonewalling, but you have to give people time to build this in.

Anthony Breach

I do not have anything to add.

Tom Rutland

Do you envisage that most people would pay on arrival, which seems to be the case internationally in a lot of respects?

Alistair Handyside

Pay on arrival is something we would not welcome. We do not want to get into disputes with our guests about whether they need to pay a tax. You need to put it into the whole booking process, because the CMA says it has to be that way. Therefore, if you are booking in our sectors, or in hotels where you pay, or put your credit card in at the point of booking, it would have to be included in that price at that point, but the remittance date would have to be post the date of the booking completing because, if the booking does not complete, there is no stay tax.

Chair

Presumably, there are other countries where this is applied regionally or state by state, and you can book through digital online platforms. How do they manage it?

Alistair Handyside

It is very difficult. The APPG for tourism and hospitality brought over the German hotel association manager. I think he has to manage 38 or 42 different systems in different cities. Some states in Germany have said, “No more tourist taxes until you sort it out.” It can get to be so disparate with all the issues that follow that. Guest confusion is one of the biggest ones you need to worry about with everybody setting a different tax. Everybody setting a different tax will cause displacement issues. If Cornwall were to set 6%, you can bet your bottom dollar Devon might set 2%. You are setting people against each other as well to drive it because everybody knows displacement will drive bookings. That is what will happen.

Mr Alaba

Bernard, you were talking about the fact that there have been 26 Ministers and there is no co-ordinated approach. I totally get it. Up until a few years ago I was in that world as well, so I understand that frustration, but this is not particularly a party political issue; this is just how we have looked at the industry over a generation. That would be my perspective. You mentioned earlier corporate memory, which is a really good point. I agree with you. I do not want to be overly sensitive about this. I totally understand corporate memory. That is obviously linked to taxation approaches. What would you do differently?

Bernard Donoghue

Thank you for giving me the role of tourism Minister. I appreciate it enormously. It is not a flippant point that in the past 29 years we have had 26 tourism Ministers. The average tenure of a tourism Minister in DCMS is less than 14 months. A notable exception was Nigel Huddleston—this is a completely non-political point of view—who was the right Minister at the right time in the wrong crisis. Thank goodness he was there for two and a half years. But, in addition to no corporate memory being sustained by changing Ministers on a very regular basis, DCMS, as I think the Chair has mentioned on a number of occasions, has quite a turnover of senior civil servants, so there is no corporate memory even within the Administration, let alone political appointees and Ministers. A further point would be something that Chris Smith introduced almost 28 years ago when he was Secretary of State for Culture, Media and Sport, which is a cross-departmental ministerial committee where every Government Ministry, including devolved Administrations, are present and looking at tourism, so UK tourism plc. That has happened from time to time. It was resurrected under the previous Conservative Government to great effect, particularly in terms of crisis management, but because we have such a silo mentality within different Government Departments, when you have something like tourism that is as important for transport as the Home Office, Culture, Media and Sport, Treasury and Communities and Local Government, etc, you need a consistent thought-through approach which is comprehensive and ambitious. At the moment we do not have that, as evidenced by the fact we are still waiting two years on for a tourism strategy from the Government.

Alistair Handyside

I would like to go back to what was in our original submission when you called for evidence. That was a whole different look at the way tourism is valued by Government—the way it is recorded in the Green Book with businesses like mine. With displacement, you would spend the money in Essex rather than coming down to Devon, would you not, whereas you go abroad? Tax money that is spent at my place is tax revenue that the Chancellor gets. We have to start looking differently at the way we value tourism. We have to have that growth strategy and stuff has got to be within that. We should be talking here about how to grow the domestic visitor economy and not have isolated conversations about components like this. I would urge very much that we start looking at it as the fifth largest economy and the impact that changes like this can have on it. We are certainly not growth-driven.

Dr Huq

We have touched on little bits and pieces of the San Francisco experience that flashed up earlier. Assuming it is happening tomorrow, I want to move on to how the levy revenue should be allocated and governed. If a levy is introduced, how should the proceeds be used to deliver demonstrable benefits to tourists, businesses and local communities? How do you square those factors?

Anthony Breach

Our position is that we should not have hypothecation of the visitor levy, and there are a few reasons for that. One is that, when we look abroad at how hypothecation systems work, we do not see many examples of hard hypothecation where there is a very specific commitment that the revenues must be spent on x, y or z programmes. Instead, we see more vague commitments, as Bernard mentioned, to support the visitor economy. Bernard has also said that those do not often translate into actual lending support on the ground for the visitor economy. If we are thinking about the logic of the arguments here for the visitor levy and fiscal devolution to drive growth, it is not just money coming in, which is then spent on things that improve the visitor economy; it changes the behaviour of mayors and local government to enable more activity to happen than would otherwise be the case. There need to be quite strong commitments that the mayors themselves need to make to do things they would not have done otherwise—other things that cost money but also things that do not cost money—and to be held accountable by local businesses, local residents and by national Government that they are doing those particular things. If we have a system of hypothecation, we risk giving mayors a bit of a smokescreen where they can say, “Don’t worry: the money has been hypothecated. I’m going to spend it on things that are great for the visitor economy. Don’t worry about it.” If it is unhypothecated, that puts the focus on mayors to justify why they are raising the levy in the first place.

Dr Huq

They would have to come up with a plan.

Anthony Breach

Yes, that is what we would argue.

Dr Huq

What do you think?

Bernard Donoghue

I would take a different view. This is an opportunity for hypothecation to work and to be tested to see that it works. Currently, culture, heritage, tourism and nature are not statutory duties and so they are the first to be shed when local authorities are looking at cutting their budgets. In addition to my day job, I chair a number of things. One of them is the London and south-east region for the National Trust. Within our region alone, we probably get two or three calls a week from a local authority saying, “Hypothetically,”—it turns out it is not so hypothetical—“if we were to discharge ourselves of our heritage assets, our museums, collections and our green spaces, would you, National Trust, be prepared to take them on?” Of course, the answer is, “No, not without cash.” Therefore, what hypothecation does by ringfencing that money 100% to be reinvested back into those non-statutory duties, which have fallen by the wayside over the course of the past 20 years or so, is reinvest back into the reasons why most people are coming to visit different places—so culture, heritage, tourism and nature. It can lend itself to other things like tourism infrastructure and transport. When Andy Burnham was mayor of Greater Manchester, we had good conversations about hypothecating the money in Greater Manchester for use in strategic investments, not just tactical investments, such as an equivalent of the V&A storehouse of the north, so museums and galleries could combine and have a collection centre in the north of England. Similarly, in the west country I chair Bristol Old Vic Theatre. We no longer receive any money from Bristol City Council, despite being one of the most important commissioning and producing houses in the whole of the UK. That is because culture is not a statutory duty. What this provides us with is hypothecating in order to reinvest in the very fabric and offer that entices people to travel in the first place.

Dr Huq

Alistair, how do you view this?

Alistair Handyside

I would come at it from making sure that the people who have to charge the levy, administer it and send it back have a fair say in some kind of forum in the area. Cardiff is an example. It has set up a forum which is a mixture of the accommodation providers—we are on that panel—other visitor economy partners in the city and the council. You sit down together and try to work out the best possible plan forward, but, unless that is a mandated component of any levy in the legislation, it will not happen and that spend will not be done in partnership, because the queue outside the door for that money will go round the block. The people who support this levy are those who think they can get some of the money, and those who do not support it are those who are effectively giving it away.

Dr Huq

How tightly defined are we saying these categories should be? If you have no hypothecation at all, would it stretch to bins, policing and transport?

Anthony Breach

The strategic authorities, which are quite different from local authorities and the statutory duties are not provided by the SAs, are focused on economic matters. It is things like transport, skills and planning. In principle, we would say it is acceptable if some of the revenues are then used to support an expansion of the planning team which then facilitates the construction of more hotels or a wider visitor attraction in the area. That could be justifiable, but obviously the mayor would need to justify this to both residents and the visitors who are paying the levy. If there is a vague hypothecation requirement, the risk is that it becomes harder for local businesses and local people to enforce, as opposed to one where the mayor has to make the full case from top to bottom about how the money is raised and how it is spent.

Dr Huq

Referring to the San Francisco experience, you said it goes entirely back into culture. Where does that stop? Currently, how do you decide?

Bernard Donoghue

In our submission we have laid out all the areas where we think the money could be spent well. One of the opportunities this gives us, were this to happen and were it to be hypothecated, is to think afresh about local government settlements. We would not want this money to fill the poverty gaps in local authorities. It is still the case that the Local Government Association says that one in four local authorities in England is on the cusp of bankruptcy. This is not a solution to that. The solution to it is getting local government settlement right between central Government and local authorities. This is not a smash-and-grab raid to fix another Department’s problems.

Dr Huq

What safeguards could you build in to stop it being taken over by adult social care, which is the biggest item of expenditure by any local authority?

Bernard Donoghue

You could specify how it should be spent on the face of the Bill.

Alistair Handyside

To avoid what has been said, it will need to be pretty specific; otherwise, two things could happen. One is that it will just get absorbed into general council budget, but the second one that we need to be fearful of is that there are lots of councils that are really strapped and value tourism, and find some small way to support them. There are not many these days, but some do. If this comes in, I suspect that, instead of them continuing to find that budget to support tourism, it will get lost in the general mix and they will use the tourism tax to replace it. So that will not be extra money; it will still be used in the wrong way.

Dr Huq

It would prop up other gaps.

Anthony Breach

I would argue that the fact it is going to strategic authorities rather than local authorities will mitigate most of that risk. The SAs do not have the same statutory responsibilities or funding pressures that local authorities do. It may be the case that a strategic authority will wish to share some of the proceeds with its constituent local authorities. One can imagine, say, a large city sharing some of the proceeds of the revenue raised to help fund street cleaning, which is a service provided by the local authority beneath the strategic authority, but, given the proposals set out by the Government, I do not think there is any significant risk of proceeds from the levy being used to fund social care, certainly not in the combined authorities where the large urban areas are.

Dr Huq

I am a London MP. In London, there are 32 boroughs; there is the City of London. I represent two of them: the London Borough of Ealing and the London Borough of Hammersmith and Fulham. They would love a bit of this rather than it just being swallowed up by the mayor. What do you think? Should our London boroughs get a share of this?

Anthony Breach

I would argue that, if you want the outer London boroughs to benefit from the levy, it does have to go primarily to the mayor rather than the constituent boroughs.

Dr Huq

I have one inner and one outer.

Anthony Breach

There is perhaps a case for some degree of sharing, as mentioned, between the strategic authorities and local authorities to cover some of those local services that touch on the visitor economy, but if we did it at just local authority level we would see Westminster, Camden and the City of London snaffle up the vast majority of the receipts and most of the rest of London would see very little. The fact it has been collected either entirely or primarily by the GLA means that the mayoralty can fund interventions that perhaps support tourism across the wider city region but, in particular, interventions to support the labour market and transport network that enable people across London and all Londoners working in the visitor economy, even if they work in the city centre but reside in places such as Ealing, Hammersmith and Fulham.

Dr Huq

Does the mayor know best, or should the boroughs be given it?

Alistair Handyside

For me, some of these things still fall down very much. There are possibilities of it working in a metro context, but not a rural and coastal context. If you say that Exeter had decided to raise a visitor levy I would be in that area to pay it, but I am 20 miles from Exeter and I would see very little of it. I would be paying it but not getting any benefit. If I was a councillor outside Exeter, would I be getting any of the budget to spend on my local amenities, or whatever you choose to spend it on? I doubt it very much. People are notoriously strong on hanging on to their budgets, are they not? I think you would struggle.

Bernard Donoghue

One of the best estimates for London is that this could raise £150 million a year, so all local authorities within London would want a slice of that action. One of the things Sadiq Khan has said and that I think is incredibly useful and optimistic is that this is a once-in-a-generation opportunity to look at using this money on a strategic basis rather than tactical interventions by local authorities. You could do something really significant, including a world-class conference centre in London, with that sort of money which no local authority itself could bear the burden of.

Gill German

I am a coastal MP. I was brought up in that area. Previous to this role I was in leadership in local government and I sat around tables having to look at those non-statutory services in a way that was very painful. I know that local government does grapple with this to try to find some kind of balance. There is a broad spend on things that matter to people beyond actual nuts-and-bolt services, so I know it is a huge issue. As to ringfencing these funds for the area, coming at it from a place-based perspective, there seems to be a strong argument for that. My biggest tourist town is Rhyl. If the real basics are improved—waste collection, available public toilets, street cleaning and making the place nice—it adds value to why people want to come. I believe that will have a positive impact on the businesses that operate there. Alistair, aside from the complexities with the visitor levy as a whole—I can see the complexities in administering it—if there is good local consultation and a robust impact assessment, could there be a broad benefit for businesses that operate in that area if that general area is improved as a result of the introduction of the visitor levy?

Alistair Handyside

I am going to come back to you. I do not want to pre-empt the outcome of a robust economic impact assessment and local consultation.

Gill German

At a local level though if that were done.

Alistair Handyside

In Wales, Cardiff—a city—voted to have one, and the three north-west counties said no because they had to go through a process and had to ask people, so I am going to reset on that. I do not think it is impossible to come up with a tourist levy or visitor tax that could be better. It is not what we are looking at, at the moment. There are so many unanswered questions on this one, but leave it to the point so it is impossible to ask that question. If I genuinely thought that the money would be spent absolutely to improve a place in a way my visitors would recognise, or believe they are spending—whether or not I am absorbing it, they will think they are spending it—the optic is that the price of the holiday has gone up because of the tax, whether or not I put up the price. They need to see a tangible benefit. While I can see the scale that Bernard talks to, in my area there is no single thing like that that you could do. You would have to have a myriad of things that the local government, to call it that, was doing that we could sell as to why this tax is in place. We cannot just impose it; they will reject it and go and stay somewhere else.

Alison Hume

I am chair of the APPG for coastal communities. As an MP who represents a coastal community—Scarborough and Whitby—which depends on tourism, I would make the observation that we have the first rural metro mayor in York and north Yorkshire, which is an issue because we have a city, York, with five-star hotels, and, on the coast, we have a very different tourism economy. It is highly competitive and highly price-sensitive with a lot of family-run businesses. It is almost an example of what has been raised today about how in one authority we could have a very different range of tourism and competitive dynamics within that. We also assume that all mayors will take the tourist levy. In fact they won’t. There will be similar businesses such as caravan parks just down the road in, say, Lincolnshire that will not be having the tourism levy. There is already quite a lot in the mix. When I speak to my local businesses—I have spoken to about 30—they were all worried about this particular issue. Looking at local flexibility and the ability to lay the tourist levy, the Government are saying that you are either in or out and it is a percentage, but would different local rates, exemptions and administrative arrangements across England create confusion and complexity for visitors and businesses operating in more than one area? Nigel, you have touched on this. Could I turn to Alistair?

Alistair Handyside

In my heart, I do not want to charge children to come and stay at my business. I do not want to charge disabled people to come and stay at my business. I do not want to charge veterans and scouts and all these kinds of people. I get that, but that is putting a burden of exemptions that would then have to be at some point checked out perhaps by the visitor accommodation provider themselves. I do not want my members to have to be a judge about whether somebody is actually disabled, 14 years old, a veteran or a boy scout. You cannot put that kind of burden on hospitality providers. Exemptions sound great in principle, and my heart goes out to those, but if they are going to be administered they need to be done as they are in Scotland where you pay the tax and you reclaim it. Therefore, you are putting the whole burden and cost back into the system. This is another reason it is an imperfect tax. That is a real danger. Regarding the other point that you alluded to, when you have a mayoral area that has both a metro and a rural context, I really doubt that the rural businesses that we represent would see as much benefit as the ones that are getting the work done in the metro part of that area. This is why it is splitting, even in this meeting, between horses for courses, for want of a better term.

Bernard Donoghue

I agree with Alistair. The ability for strategic authorities to opt in and opt out already makes for an uneven playing field, and that is not a good place to start from.

Anthony Breach

We would argue that having a single national framework and then mayors being able to decide whether to levy the rate and what rate to levy it at makes sense. You can adjust the degree of the tax burden and the reward relative to the needs of the local economy. We would say that it does not make much sense for that national framework to allow mayors to vary the rate by local authority. That will not only introduce more complexity, but it will also introduce a situation where mayors are incentivised to really squeeze the pips of the local authorities where there is a high demand for tourism in that area, risking wider impacts to the national economy. To come back a little bit to something Gill said about whether there is a place-based local aspect to this, we think that that is right and that there is a behavioural impact that we think is at the core of the logic for the Government’s fiscal devolution agenda. An absolutely essential corollary to that is that, whatever revenues are raised by the levy for different mayoral areas, they should not be equalised between different mayoral areas. If a place is effectively penalised with fewer grants for levying a visitor levy, that will completely blunt the incentive to try to grow the visitor economy in that particular area. That is truly just a burden on business without any of the growth incentive side of it. We have to allow that, if the revenue is raised, if a place decides to go for it, if it decides to set a rate at whatever rate it deems acceptable, that has to be considered its money that it is raising to be used for its own purposes, not an input into a national Government grant formula.

Gill German

Okay. Can I come back to Anthony briefly on that? Tourism does not really fit the mayoral boundaries. Going back to the price-sensitive, lower end of domestic tourism, which is so valued, such as the holiday parks, you have a holiday park in North Yorkshire and then just over the border there will be one that does not have the tourist levy. That seems to be unfair.

Anthony Breach

We do not quite have enough time to get into the topic of local government boundaries and the impact on local government finance. The big-picture issue is that we will have to draw boundaries somewhere. Some mayors will set the levy; some mayors will not. There will always be a live political question facing mayors on both sides of those boundaries as to what the levy should be and whether it should be levied at all.

Gill German

Okay. What safeguards should apply before a scheme begins? Should legislation require a minimum implementation period, regular reviews, or indeed a sunset clause?

Bernard Donoghue

Yes, yes and yes. This is so complex and potentially such an opportunity that it needs adequate thought, analysis and consultation. That is not a stonewalling piece. This is so fraught with difficulties and, as you have just identified, displacement and inconsistency that this needs to be given a lot of thought and time to achieve all the political and economic goals that the Government are setting out.

Alistair Handyside

It will primarily impact the businesses that serve the great British holiday: the self-catering, the holiday parks and the bed and breakfasts. It is the lower-average-cost accommodation that will be hit the hardest by this, and the people perhaps in lower-income streams who will be thinking they are paying this even if they are not. In the Wales consultation on this, the reaction of lower-income groups to these kinds of taxes is described as visceral. So be careful what you wish for.

Gill German

The fact is that we have a cost of living crisis and many of the small, family-run accommodation providers are already worrying about their financial sustainability.

Anthony Breach

It is perhaps harder to justify a sunset clause. I do not know of any other tax in the UK or indeed similar systems elsewhere that have that kind of phasing out. One element where we would expect this to be pro-growth is that a percentage-based levy is a buoyant tax where revenues rise over time as the economy grows and expands. If that is set to expire at some point in the future, that will dent the ability of mayors to both borrow against that revenue and to levy that tax with the idea of spending it on projects that are actually good for the economy. Any such levy should come with not just an assessment of the impact on businesses and how they plan to spend the money but, also, what the commitments are from the mayors about their behaviour that they will change in the governance of their local economy that will be good for the visitor economy.

Chair

Thank you so much. Gentlemen, those are all the questions that we have for you. Was there anything that you were burning to share with us that we did not get round to today? Alistair?

Alistair Handyside

I am going to harp on about thorough economic impact assessments and full consultations. They are an absolute must.

Chair

Thank you. Bernard?

Bernard Donoghue

I merely thank you for looking at tourism again. This is the fourth time that this Select Committee or its predecessor Select Committees have put pressure on the Government to take tourism more seriously. I will end by saying that tourism is not just where you grow jobs—we are very good at it—but it is also where you grow people and communities, and that needs to be factored in as well.

Chair

Brilliant. Thank you very much. Anthony?

Anthony Breach

For me, it is emphasising that this is a levy that will be right in some areas and not right in other areas, and it is appropriate that the mayors should have the power to ultimately decide whether the levy is the right levy for them in their area.

Chair

I thank all of you for coming and for all your time this morning. It has been really helpful, and we have really enjoyed speaking to you. Examination of witnesses

Witnesses

Laura Citron, Joss Croft and Merryn Kidd.

Chair

For our second panel I welcome Laura Citron OBE, chief executive of London & Partners, Joss Croft, chair of the Tourism Alliance, and Merryn Kidd, chair of the Somerset & Exmoor Local Visitor Economy Partnership. That is a mouthful, is it not? Thank you all very much for being with us this morning. I will pass over straightaway to Jo.

Jo Stevens

Thanks, Chair. How effectively is the current destination management system in England converting national tourism ambitions into local growth? Laura, do you want to start?

Laura Citron

Thank you very much. The new national system, which has clear, structured layers of destination management, is the right one, but in our view it is underfunded and therefore not able to be effective because it does not have sufficient long-term funding. The structure itself was created after a very thorough review, and we support the structure.

Merryn Kidd

It varies tremendously across the nation depending on size, region and other factors. For us in particular in Somerset & Exmoor, the local visitor economy partnership programme has been fantastic. It has given us an opportunity to have a seat at the table with many bigger areas, and it has forced us to work with partners that we would not have done before. The de Bois review noticed that there were so many disparate organisations working towards the same end, and that was very evident in more rural areas. We have brought together many different organisations now sitting at the table together. We are a partnership of four. That has forced us to come together to create a strategy for the same end.

Joss Croft

The de Bois review was well timed. It produced its recommendations in September 2021. The Government response was in the following year. It is not a problem of structures; it is a problem of funding. The de Bois review recommended these different layers that we would have from a national through to a regional through to a local. That is very sensible. That was very well received by the industry. The funding has not been there to see it through to its end as well, so you have a lot of destinations. The Tourism Management Institute released a report last week. Ninety destinations across UK and Ireland had completed it. Some of the statistics within it are absolutely horrifying: 16% of destinations do not have a full-time employed person looking after that destination, and 22% of them said that they were unlikely to survive the next five years. A lot of people often think that tourism is all to do with the marketing. The point of the LVEPs is, of course, to do with marketing, but more importantly it is to do with the management of tourism. If I give you an example, 80% of all inbound tourists who come to the UK will use an intermediary; 45% of those will use a tour operator. They need product. They need international-ready product. They need product that has commissions, that has allocations in it, and that is ready 18 months in advance. Without the people in the destination to provide that training, that business support and the training for people to understand what international tourists are looking for, you do not get sold internationally. If 45% of the business is coming through tour operators and they do not feature your programmes, you simply are not on the shelves to get sold. Without that minimal investment—and it is small investment—for the LVEPs to be able to have that business support function, it does not matter what marketing they are undertaking because, frankly, you are not going to get sold. The approach of the de Bois review was absolutely right: we do not need another restructure. We need to make sure that these LVEPs are invested in at a base level to allow them to provide the services and support that the international trade needs to sell them.

Jo Stevens

Thank you all for your answers. I represent a seat in Wales—Cardiff East. I looked at this list of local visitor economy partnerships, destination development partnerships, destination management organisations, local authorities, VisitEngland and VisitBritain, and I thought, “How does anybody understand what each of those do, and how do they interact together?” I was quite interested particularly, Laura, in what you said about how you think the structure works really well. From your perspective—and I will ask all of you—do you think that those respective roles are clear and understood, and are they effective at the moment?

Laura Citron

I will answer from a London perspective, but I recognise that the situation may be quite different in other parts of the country. The way that we are organised in London is that we have a growth agency as London & Partners, which is the growth agency for the Greater London economy across all sectors, of which tourism is one. We act as the local visitor economy partnership and as the convention bureau, and we operate Visit London, but we do that as part of a much broader portfolio of activity, including inward investment, innovation, small business support, London global brand and so on. We are able to look at the experience economy and tourism as one growth sector alongside frontier innovation and professional services and other sectors of the economy. We have a very good working relationship with the team at VisitBritain and VisitEngland. They promote the national story and we promote the London one. We are working across three areas at a London level. One is the strategy for the experience economy in London and how we convene the industry together to shape a strategy and provide insights and data that businesses use to shape their own plans. The second is that demand generation/promotion piece that Joss talked about: marketing campaigns and, importantly, selling business events internationally, which is an important part of demand in London. The third area is around developing that product that Joss has talked about—supply-side interventions. What do we want the future experience of London to be? How can we bring in the best experiences in the world and put them in this city so that it continues to be a world-class visitor destination? Our relationship with the national agency is largely around the demand generation side. It is around collaboration on campaigns. London is a tourism gateway for the UK. We could be doing a lot more to use the visitors who come to London and encourage them to visit other parts of the UK, but we are not currently doing that systematically.

Jo Stevens

I am very glad you said that. I might chip in with a question that I was going to ask later, Laura. Next year, we have the Tour de France, which will go through Scotland, England and Wales. The year after, we have the Euros in Scotland, England and Wales. How effective are the current organisations such as VisitWales, VisitScotland, VisitBritain and VisitEngland in spreading out on a big national programme, a big event thing like that, and getting people not just to come to London but to go right across the UK? We find it very frustrating in Wales.

Laura Citron

To come back to the first question, the structures, the good will and the partnerships and relationships are there, but there isn’t long-term, multi-year funding on a sustainable basis. There have from time to time been pots of money that have been competitive to do gateway work on joining up different destinations. We have recently run a really effective campaign jointly with Scotland where we have been encouraging visitors to London to take the train and visit Scotland as well. The results on that are really effective. It shows that it works. We have to compete for these very small pots of money and it is not multi-year, so you cannot build towards it strategically. We know that some of these events are coming years in advance, but we do not know what the funding will be in the years that they are coming, so we cannot work together as a system to plan.

Jo Stevens

By the time the funding is confirmed, you have run out of a load of time that you could have spent planning. Right, okay. Merryn, going back to my original question about the respective roles, do you think they are clear enough?

Merryn Kidd

As one of the newer LVEPs, part of our piece of work over the last year and a bit has been to communicate this to our stakeholders in the area. We are very clear about what an LVEP is, but if you say that word to someone who runs a small B&B they will not know what that is. We are one of the examples. There is no full-time member of staff who is being paid to run the LVEP in Somerset & Exmoor. It is all being done out of people’s day jobs. I am a CEO of a visitor attraction. We are all giving our time to do this thing that has been imposed from on high. It has been an excellent thing for us, and we are doing the best we can with our stakeholders to communicate why it is a good thing and why we can represent them so much better now, but it is a long piece of work, and even tiny amounts of funding would enable us to employ someone to do even just the admin. The roles are clear. We have a network of people with whom we work, and they are very happy with it. Accreditation has created this clear responsibility for us but without any funding to deliver it. I am on the fence about saying, “We are clear about the responsibilities, but we can’t deliver them.” To talk to Laura’s point and your point about bringing people around the country, this for us is an opportunity to attract more international visitors or domestic visitors out of the cities. One thing that we were lucky enough to do, funded by VisitEngland, was to attend travel trade shows in Amsterdam. When I wanted to go with a business partner, this was not funded at all. The stand was funded by VisitEngland, which was great, but we had to pay for our own flights. I had to persuade a hotelier to come with me.

Chair

We will come to that shortly. Can you stick to the questions and try to keep answers a little bit pithier, ladies and gentlemen, please? Thank you.

Joss Croft

In terms of the clear roles, VisitBritain’s role is to drive that demand, VisitEngland has a co-ordinating role on the product development side, and then the LVEPs are there to do the product development, the training, the business support and the engagement with businesses so that they are trade-ready. It is not just the marketing piece. It is clear to those of us who work in the industry. We heard in the previous session about Government understanding of tourism and understanding the long chain and the long tail that there is within it as well. Customers do not recognise LVEP boundaries. They come for the experiences. They come for the thematics and the destinations that they want. I do not think it matters if the international visitor understands. Of course they do not. That is not the role of the LVEPs. The role of the LVEPs is to get their businesses ready to accept these visitors and to develop products—we have heard about the international competitiveness—while making sure that the products and experiences are available and world class for our international visitors. It is clear to those of us who work in the industry. For the visitors, I am not sure it is quite so important.

Jo Stevens

Okay, I will leave it there.

Jeff Smith

Thanks for being here. You have all said that you think the structures are right. You all have, effectively, strategic roles. We heard from Jamie, who is the chief executive at Chester Zoo, last week. He described all these various roles of VisitBritain, VisitEngland, the LVEPs and the DMOs as confusing. I have heard similarly from other stakeholders. For individual operators and attractions, are those respective responsibilities clear enough to the people in the industry?

Joss Croft

If you were to look at an individual business and where they see the value, where does the value sit in terms of that engagement? It might be the business support that they are offered through their LVEP, the training, getting them travel-trade ready and getting them international ready. It might be working with VisitBritain and the international offices that VisitBritain has. VisitBritain’s international offices are an absolute jewel in the crown, if you are interested in the Dutch market, working with the people on territory who understand the trade, the media and the operating environment. People will understand better where they see that value most.

Merryn Kidd

As someone who is both an attraction and representing the LVEP, the value for the attraction certainly in our area is to be able to make their voices heard louder. There is no point for me as the CEO of the Bishop’s Palace trying to advertise internationally for visitors to come to my organisation. It is the value of joining up and saying, “Hey, Somerset & Exmoor is an amazing place to be.” My role as chair of the LVEP is to communicate this to the organisations within the area and to let them know why we are there and what we can do for them, and that is time-consuming. Most of the businesses are small micro-businesses.

Laura Citron

We operate as a social enterprise, a public-private partnership funded partly by grant and partly by businesses. For me, that is really important because if we are not doing things that businesses value they will not pay to participate. We have over 300 businesses in London that are annual paying members of London & Partners, and they really hold us accountable for what we are doing, because if they do not feel that we are adding value they are not going to renew. Additionally, some of them choose to come with us on trade missions to go and sell, particularly around business events, conventions and trade shows. Others also pay from time to time to participate in marketing campaigns. For me, that is a really important test of whether we are doing the right things, because businesses simply would not pay otherwise.

Nigel Huddleston

Building on what we have talked about there, the confusing structure is something that we have all dealt with for a while. You have previously said the purpose of the LVEP was appropriate, but it is not properly funded. We have these layers. As Jeff said, we have heard in previous hearings people saying, “I don’t get what VisitBritain or VisitEngland do.” They do not see the benefit. VisitEngland is primarily domestic promotion and VisitBritain international, and then there is a plethora—I think 100—of DMOs around the country. I have faced it in my area. I have Visit Worcestershire on the border, Visit Gloucestershire, Visit Warwickshire and Experience Oxfordshire all competing to try to get people to the Cotswolds. The purpose of the LVEP was to get that co-operation, get them working together and package in a more appropriate way. However, it all goes back to funding. The LVEPs got £4 million. We spent billions supporting the industry during the pandemic. Inbound tourism alone brings in something like £30 billion of export revenue a year, and in return the Government gave £4 million back. By the way, that was my Government. It has not got much better. The frustration that you are all expressing of how much the industry gives versus how much it gets in support is one that is really key. The question that I have for you therefore is this. What is realistic in terms of a long-term funding model? What do you need from the Government and how much do you need from the Government? Is it going to have to be, Laura, your model of saying a little bit of Government or taxpayer money, but at the end of the day it has to be primarily commercial? What is realistic here? Sorry, there is lots in there, but you know what we are getting at.

Merryn Kidd

I will start with the small. In Somerset & Exmoor, we have drawn up a menu of what we would fund if funding appeared, and it is a tiny amount. We have choices of 50 grand here and there. If it pops up, we will be ready to act. That only adds up to £200,000 a year, and that would keep us going. About £1.3 billion was put back into the economy in Somerset & Exmoor, which is a huge amount. With just a 5% raise, that would be an extra £64 million. All we need is a couple of £100,000 to keep us going. I can only speak for our area and what I would suggest. We have nothing from Somerset Council—not a penny.

Nigel Huddleston

Joss, is this a familiar story? If you went to the DMOs and LVEPs across the country, do you think they have their very clear ask of how they would use money effectively ready to go?

Joss Croft

Absolutely. They are so engaged with their industries. They know exactly what there is to do. I will give a shoutout to VisitEngland. It recently launched a connected destinations fund, which is to get LVEPs working together across boundaries. I talked earlier about consumers and international visitors not necessarily recognising our authority boundaries. That is very good. In terms of the funding, though, Nigel, I have been around for a long while. When I first joined VisitBritain in 2000 at the turn of the millennium, the funding settlement from central Government was about £35 million a year. Here we are 26 years later, and it is £18 million. If you were to take that £35 million in 2000, it would probably equate to somewhere near £200 million at the moment. Currently, it gets £18 million. It is not a problem of structures. It is not a problem of ambitions or delivery. VisitBritain delivers about 20 or 25 to 1, or in the recently cut business events growth programme 35 to one. The deliveries of the ROIs are there, but it is not getting the funding to be able to deliver that. That is on a national scale, but that could just as easily apply on a local scale as well.

Nigel Huddleston

Can you comment on how that compares internationally in terms of who we are competing with globally?

Joss Croft

Tourism Australia spends more in China than VisitBritain gets as a grant in aid.

Nigel Huddleston

Laura, you have done particular programmes to prove that, when you make those activities and when you do that promotion, there is a really strong ROI. You have provided some evidence. Can you talk about that?

Laura Citron

I am happy to. We have very clear ROI on the benefit of marketing campaigns in particular. On a domestic marketing campaign, we see about a 15 to 1 return and over 20 on international, but that is only the marketing part. It is important to think also about that medium to long-term growth of the sector, and that requires investing in the product side as well, otherwise you do not have anything to market later.

Nigel Huddleston

You said 15 to 1 ROI. You do not get that every day, do you? If you look at the successful DMOs, and indeed, unfortunately, those that have failed—even Visit Cornwall went under about a year ago—how can you incentivise, encourage and cajole commercial partners to come in? We all know that both central Government and local government funding is really tight, and it has to be, does it not—this mix? DMOs have different models. Some are almost entirely public and some are almost entirely commercial. What needs to be done? What is the magic formula there to get the private sector to come in here also?

Laura Citron

In our case, I do not want to give the impression that the private sector is a panacea. London & Partners overall has a budget of about £42 million, of which about 84% is grant. The private sector is a significant part, but let us be clear that it is still majority grant funded. That is across everything we do. Of that, we would spend as core about £3 million on the experience economy a year. This year, we have an additional £5 million for a marketing campaign. That is nearly all mayoral grant funding. It is not national funding. This is the mayor choosing to invest in what we do for the sector.

Nigel Huddleston

Merryn, in that context, Bernard said that there is potentially £150 million raised for London. Does that scare you as somebody who is outside London? Remember, 50% of all inbound tourism spend is spent within the M25.

Merryn Kidd

They are going to come to London first. We are not under any illusions that people will fly from China directly to Somerset. That is all well and good. The job we have is then to draw them out of London as well so that they extend their stay and we all benefit from that. The sums are astronomical. We have had a lot of conversations about funding being distributed via mayoral authorities. Somerset & Exmoor, nowhere near, not a sniff of it. We feel there is a growing disparity between the regions that have these and those that do not, and we are losing out.

Nigel Huddleston

Do you have any comments, Joss?

Joss Croft

You asked what incentive there is for the private sector to be investing in this. My tour operators—I have 140 of them—currently spend about £30 million per year marketing the UK as a destination because it is in their interest to sell the destination. Yes, of course they want Government to fund those demand-driving activities that they will benefit from, but they need to be able to engage with the local product. They need that internationalised trade-ready product. It is in their interest to do it. They want to sell outside London, partly because of the costs of London and partly because of the authentic experiences that you can get across the whole of the United Kingdom as well. They need those new products to keep visitors returning all the time and to keep their overseas partners interested as well. They already do invest. They just need a little bit of help. The LVEPs need to be funded to be able to provide that help to them.

Nigel Huddleston

Excellent. Great. Thank you very much, Chair. I look forward to seeing you all at World Travel Market next week.

Dr Huq

I want to come back to this idea of where the locally raised revenue from the levy will end up. A lot of the evidence that we had also touched on the idea that there is no single point where visitor numbers, needs, costs and potential growth are measured. You have your LVEPs, but they are a little bit disjointed. What factors do you think should determine how this tourism growth income gets distributed between areas? The figures that we are looking at show that only 15% of visitors to London make it outside. That is a worry. If everyone is going to be jealously guarding their pot of money, how do you sort that?

Joss Croft

Yes, you are right; I think it is only 38% of international visitation into the United Kingdom goes outside London. I will talk about tour operators again. They deliver about 44% of their business outside London, so they are a key mechanism to getting people outside London. If you are looking at this and you are serious about getting business outside London, you need three things: you need the ability for people to be able to get there; you need the right product to get there; and you need the right marketing to make people aware of that access and indeed what the products and experiences are. Events have a key role to play here. We all saw the Taylor Swift effect and the Oasis effect in driving business, and driving business again outside London. There is probably some role for central Government to look at why we constantly hold the FA Cup in London—there are plenty of other places to have it—and why we have the Euros and the ATP Finals in London. There are huge opportunities, and some funding ought to go into that. What that mechanism is, I think, is probably a bit more difficult to say. I do not think there is a clear route where you should say, “You should avoid London again.” Again, I do not think that is the case. First-time visitors will come to London. We are an island. The growth markets only have access routes into London. The opportunity is to grow London and then encourage those visitors, particularly second-time and third-time visitors, to travel outside London as well. Rather than having a formula per se, it is more around having the strategy and then the metrics within that which will drive that.

Dr Huq

Something like rail packages. You sometimes see at mainline stations they say that you can take a train from here to Oxford or Cambridge.

Joss Croft

In most countries in the world, you turn up to the central station and you take a trip down to Orléans, for example, or you might take it down to the Loire Valley, wherever you want to go, but you are probably not going to have to pay £250 on the day to do it. You need the ability to distribute rail fares and access to rail fares before people get here as well and make people aware of that system. There are products such as the BritRail Pass. Most visitors in most international destinations do not expect to be paying £250 for a day trip on the day itself. There are other elements as well. We do not make it easy for people with the multiplicity of ticketing that we have, and there is a lack of translation facilities on the ticketing machines or the kiosks and the ability to be able to speak those languages as well. Getting people out and making sure that people are able to purchase before they arrive to avoid some of those challenges is absolutely important.

Dr Huq

Merryn, congratulations on having the most picturesque commute in the country. I probably have the ugliest one.

Merryn Kidd

You must come to Wells sometimes. There were two points there. You asked about distribution of funding, which I would like to go back to.

Dr Huq

It is a disadvantage for those unfashionable places.

Merryn Kidd

It is a real worry for us where we are, if the levy is imposed, and distributed and raised via mayoral authorities, what will happen to areas like ours. We do not want to miss out on that. We are already missing out on funding because of that. It seems to me that we have created this local visitor economy partnership system without any funding, and we are talking about maybe creating a new stream of funding without anywhere to distribute it. There is a natural tie-up there. Going back to the distribution of people out of big cities, not just London, Somerset & Exmoor has about 14% of international visitors—that is all it is—so there is a growth opportunity there. They spend about 24% of the spend. We are very keen to attract more of them. We were lucky enough to show the China National Tourist Office around Wells the other week. The group that came was absolutely blown away and said, “If only we could tell everyone about it.” It is not that the product is not there; it is that we are not showing it to the markets because we do not have the funding.

Dr Huq

You have to work harder as a non-mayoral destination. Is there a two-tier thing going on?

Merryn Kidd

Absolutely, yes, from what we see. We have wonderful neighbours in Visit West in Bristol. It is well funded and able to deliver great activities and marketing in its region. It is kind enough often to pass visitors to us to extend their stay or in family trips and things. We are very much concerned about that disparity.

Laura Citron

As London, we absolutely want to encourage visitors who come to London to visit other parts of the UK also, not only because it is obviously good for the UK economy but because we know that visitors who also go somewhere else have a better experience. It is good for everyone. We need partners in LVEPs that are well funded that can work with us, and VisitBritain to be funding us over the long term to work together in partnership; and for VisitBritain to be putting out that narrative about the UK as a multi-destination place—telling people the story of the different places that they can visit as part of a single holiday. We are absolutely ready and willing and keen to partner with the rest of the UK.

Dr Huq

As an outer London MP, there are places within London that they could go to as well. Camden is well established, but in somewhere like Southall there are any number of Indian restaurants and experiences that you could have. Those should be pushed by London & Partners a bit more. There are certain destinations that have a high visitor management cost but relatively few overnight stays—we are going to one next week—such as Blackpool, the Cotswolds and places like that. They may not have the infrastructure for overnight stays, so they are not going to get this levy, but they still need funding. How would you sort that problem?

Merryn Kidd

I use the city of Wells, the smallest city in England, as an example. We get calls sometimes from group travel leaders who want to stay in the city, and there are not enough rooms for them, so we then have to push them towards Bath and Bristol, which, though only 20 miles away, is a whole other world. We get the majority of our money from day visitors, and we will lose out again if we do not have the infrastructure to be able to house them, which is why we want the visitor economy to be seen as part of economic growth, the infrastructure, and to get our councils involved with that as well.

Dr Huq

Could you make a formula where the levy does end up reaching into those forgotten corners a bit?

Merryn Kidd

I do not think I can solve the problem there. There is a real risk of missing out in places like the Cotswolds and smaller destinations without adequate hotel space.

Laura Citron

Within London, the benefit of having a levy that is connected at a London level is that we have similar issues within the city. If you look at the London borough of Brent, which hosts Wembley Stadium, it has huge numbers of visitors, which comes with significant cost, but actually relatively few of them stay overnight in the borough. If you were to do a levy that was ringfenced at a borough level, it would be left with a lot of costs but would not necessarily get proportionate support for that. There are imbalances between where people spend their time and where they sleep.

Joss Croft

Don’t just think about the levy. We heard earlier today about the 20% VAT, whereas it might be 9% in France. Of course, you are also paying VAT on all your food and beverage. These taxes are happening. That could be devolved down to the local destination. It is not at the moment, but there might be some opportunities moving forward to look at that.

Dr Huq

Do you think that the London boroughs should get a share of this? Yes or no, if you like.

Joss Croft

We have talked about the benefits of spreading that economic benefit out of London, but out of zone 1 or zone 2 as well is absolutely important. We need these destinations to be thriving and buoyant destinations to be able to attract the visitors as well. There must be some mechanism whereby those that are not funded by a levy are still having those base levels of support. If you look at somewhere like Brent, it does not necessarily have the hotel stock, but, actually, it is quite a good place to stay in order to get people into central London while you are not paying central London fees. Maybe there are other opportunities for seeing what levels of support those boroughs can receive as well.

Merryn Kidd

Looking at it from a holistic view, for Somerset & Exmoor, there are places without hotels and bed nights. If we look at Exmoor where 60% of jobs are dependent on the visitor economy, we need them to have some of that benefit even though they might not have loads of hotels right there. It must be spread around a certain area. If the LVEPs were involved with this, we would be able to look at it as a whole and distribute according to the needs of the areas.

Laura Citron

A big part of our experience economy programme is working with local councils on their growth ambitions for this sector and how we can support them. We are speaking with local authorities in London week in, week out about how they want to grow their destinations locally. We have really exciting growth opportunities in lots of outer boroughs in London to create genuinely exciting world-class destinations. Our role is not to dictate what those growth ambitions should be, but to back them by supporting them to get investors to come into the borough to build hotels and bring in new attractions and events to the borough. For us, that is an important part of that overall strategy for London, because we know that visitors want authentic local experiences. Yes, of course, they want to come into the city centre and see things like this, but they also want to go to Southall and experience different cultures and different cuisines. That is such an important part of why people come to the city.

Gill German

My substantive question has been covered about as far as reaching outside London, and I am really grateful for your answers, so I am going to go straight into my follow-up question. How do we enable more of that regional tourism to take place along the lines of making it internationally bookable so that it is quite easy to see? I can go and book somewhere to stay and things to do in London. How do we spread that out across England and the rest of the UK, and make that commercially viable to do? As a follow-up to the follow-up, can we make better use of social media and AI here? For a lot of people I know, that is their first port of call when they are planning visits. I wonder if that could be part of your answer as well. Thank you, Chair.

Laura Citron

Absolutely. We have seen in the last 12 to 18 months a really dramatic shift in the discovery and booking behaviour of consumers. To be honest, the whole industry globally is running to catch up with that. We are really keen to work in partnership with other areas on that bookability of product. We have in the past been funded by VisitBritain to do some work with Manchester, where we have been able to partner with airlines to have flights that come into one destination and then out of the other so that people can do those multi-stop trips. We have also even done it with Paris where we did a partnership with Eurostar so that visitors from the US could come into one city and out of another. That bookability, you are absolutely right, is key. I would echo everything Joss said about the cost and complexity of rail travel being a major barrier to dispersal.

Merryn Kidd

In our region, it is about education for the businesses. It is about tying them up into travel-trade-ready product, which we do not have and we are not strong at. It is a new thing for a lot of people. They do not even know what I am talking about when I approach them and start saying it. Back to where I was earlier about going to speak to travel trade buyers in Amsterdam, there were only a few businesses that we could represent at that point. When they followed up with asking about packages for people with disabilities, etc, it is a real effort for us to try to find something that will meet their needs. We have been very grateful to the LVEP programme and VisitBritain for helping us get there, but there is a lot of work to do, and if we are not funded we cannot do it.

Joss Croft

One of the big challenges is that a lot of people assume that international visitors behave like British people do. They don’t. We are pretty happy as Brits travelling internationally to book Eurostar and then a Paris hotel, fine. If you wanted a two-week holiday in China, you would be using an operator, and that is how most of the world sees a trip to the UK. It is complicated. We are not seen as very friendly people. We drive on the wrong side of the road. We have our own currency. We are not seen as very welcoming. It is a big deal. It is a big investment as well. We are a very premium destination for people as well. International people use OTAs, online travel agents, or they will use more traditional tour operators. It is about making sure that businesses know how to work with these people. If 95% of all Chinese people use an intermediary to travel to the United Kingdom and you are not engaged with those intermediaries, you are not getting sold in China. Any ambition you might have around China as a market will never be realised. It goes back to that point around having the LVEPs, the capacity, the capability and the desire to work with the travel trade that will then get them sold internationally. You talked very briefly about AI. We are seeing that that is massively changing the way that people discover destinations and people plan for destinations. It is not the way that people are booking destinations. Nobody is handing over £1,500 to ChatGPT in order to take their holiday to the UK. That is just not how it works at the moment. Maybe at some point in the future that will be the case. We have to make sure that, in so far as we can, we have a national tourist board such as VisitWales or VisitBritain that is making people aware of these destinations, but then we need to give people the opportunity to book it, and that is where the trade comes in as well.

Tom Rutland

Good morning. I would like to ask a little bit about infrastructure investment and what potential growth that could provide to tourism. Merryn, you might in particular have things to say about this, so perhaps I will start with you. What infrastructure investment would make the greatest difference to the growth of local visitor economies?

Merryn Kidd

In our area, transport. The city that I live in, Wells, does not have a railway station. There is a population of 11,000, and yet I welcome 500,000 people across the drawbridge of the Bishop’s Palace every year. They have to get to us somehow. We are trying to meet net zero targets. We are making people drive. The bus system is not good enough. They are being cut. Our local MP, Tessa Munt, does great work in trying to get bus routes put back in. The trains are expensive. The nearest train station is Castle Cary. That is where everyone goes, too, for the Glastonbury Festival, which is a few minutes away. We really struggle. I know my colleagues in Exmoor would say, “It’s not the last-mile challenge; it’s the last 25-mile challenge to get people there.” We want to be able to pass people around our own county, and it is very difficult.

Joss Croft

Rail investment, absolutely. We heard in the earlier session about overnight visitor levies. They work best when the visitors can see what they are being taxed on and where that investment goes. That might be transportation and rail as well. In terms of investment, there is a real challenge for private sector businesses at the moment, particularly with accommodation as well as attractions. Their operating costs have gone up massively over the past two years. We saw the increases in national minimum wage and the national insurance contributions, and now they are about to suffer an overnight visitor levy as well. That is taking money away from the system and their ability to be able to invest in it. We heard earlier about the international price competitiveness of the United Kingdom. The World Economic Forum about two and a half or three weeks ago released its report that found that the UK was 106th out of 110 countries for price competitiveness. All the time that prices are increasing, we find that people are reducing their length of stay here. They are not staying quite as long because they have a fixed budget, and more and more of that is being taxed out at the various levels that we have. If we are not price competitive, we had better be damn sure that we are offering the right product and good enough world-class product. These high business costs are deterring businesses from investing: investing in their staff, investing in refurbs and investing in growing their businesses. Investment is absolutely intrinsically linked to that demand and to the international competitiveness, because what people look for first when they choose an international destination is whether it offers value for money. That is No. 1. No. 2 is whether they get the welcome here.

Tom Rutland

Laura, on infrastructure investment, what is the perspective from London?

Laura Citron

Critical. We have seen the transformational impact of the Elizabeth line on our tourism industry. That has enabled hundreds of millions of pounds of investment in the Royal Docks and in the extension of Excel, the convention centre, which then has brought significant increased spend. The other key area for us would be affordable housing because we need people to be able to work and live in London to support the sector and to work in the sector and develop careers in it. Looking beyond more traditional infrastructure towards the infrastructure that enables the visitor economy, we see significant international investor interest in coming into London to build significant new visitor infrastructure, particularly stadiums, arenas and large-scale new immersive experiences as well as hotels. One of the benefits of being an LVEP that sits within a growth agency is that we are the inward investment agency for London. We have teams that deal with large-scale capital investors across all asset classes, and so we are able to work directly with those investors and help them to land those really large-scale investments in visitor infrastructure. For London, it is the transport and the housing and all the multi-sector infrastructure plus that really specific visitor infrastructure.

Tom Rutland

If you can divide it like this, was the most useful part of the Elizabeth line the greater connectivity to those destinations in east London, or was it the additional or better method of transport from Heathrow that made a greater impact?

Laura Citron

I could not give you any numbers on it, but both have been game changers. A couple of weeks ago, I was at IMEX, which is one of the biggest trade shows globally for the meetings and conventions industry, and spoke to people who organise very large-scale events and choose between global cities. I heard time and time again that that ability to get their delegates into Heathrow and then whether into the city centre or to Excel has been a game changer for London’s attractiveness.

Tom Rutland

That is helpful. My next question was going to ask about the extent to which transport and digital connectivity constrain tourism growth in urban and rural destinations. We have touched on transport a bit already, so if there is anything you want to add there please do. On digital connectivity, is there anything in particular, Merryn?

Merryn Kidd

Yes, I feel I should answer this one because we really struggle in our area. I have been all around the world. I would be absolutely fine using my phone. We do not have 5G in half of Somerset. We don’t have even that basic level. In a large-scale tourist attraction, people want to come in. They want to be able to use their phones. They want to be able to livestream as they are walking around. They cannot do it—certainly not in the city of Wells at the moment. That is a real problem. It will become more of a problem because people are booking much closer to the dates of experience. They wait and see what the weather is like before they book for an attraction. If they cannot do that quickly and easily because of the connectivity, we are really in trouble.

Joss Croft

I do not have much to add other than for the visitor in terms of their digital needs, but also businesses and their digital connectivity. We have talked about the preponderance of the use of intermediaries, be that OTAs or tour operators. They all use systems. If you do not have digital broadband and the ability to connect to those systems, you will be at a huge disadvantage.

Laura Citron

I have nothing to add to what I have said.

Tom Rutland

Finally—this is for all of you—where should Government intervene when commercially weaker destinations cannot attract private investment on their own?

Joss Croft

Government intervention takes many forms. We had the Discover England Fund that was around product development, packaging up experiences within England and then being able to distribute them internationally. That came to an end because of the pandemic, regrettably. This new fund, the Connected Destinations Fund, to be able to get people to work across boundaries and LVEPs and to work together for considered and appropriate customer experiences across those boundaries, is an excellent idea. The funding is not massive. The funding is probably £1 million a year, which sounds like a lot of money and of course is a lot of money, but within the grand scheme of things in terms of the £30-odd billion that inbound tourists will bring it is not much money. There are opportunities for supporting and intervening when it can build towards that successful consumer proposition. Here we are. We have the LVEPs across the United Kingdom. Only 22% of them are saying that they will survive for the next five years. The industry needs those LVEPs to be sustainable, and that is where public intervention can make a serious difference.

Merryn Kidd

I think the Connected Destinations Fund is specifically for partnerships between LVEPs and mayoral strategic authorities, or has a strong leaning towards that. Once again, there is a gap for some of the destinations that need it the most. I will leave it there. You have talked about the funding that we do not have. The proposed levy should not be a substitute for longer-term Government funding into tourism. I know it could be an answer, but there should be something separate to that certainly for smaller destinations.

Laura Citron

Within London, we are already currently developing a strategy that will identify where we have the potential to grow new destinations, and that will inform where we need to be investing as a city. Different destinations would have different needs. For some of them, it might be that the barrier is last-mile transport infrastructure. For others, it might be that the public rail is not good enough. For others, it might be that they are missing an anchor attraction or some surrounding F&B. For others, it might be that the destination is fantastic but nobody knows about it and they really need a marketing push. We need to be tailored and work through with local areas what the different interventions are that will support them from the starting point that they are at and that will reach the growth ambitions that they have for their local area.

Jeff Smith

Joss, the Tourism Alliance said that, whenever we have the national visitor economy strategy, the Government should set out clearly which bodies are responsible for what and where the accountability is. Who ultimately should be accountable for delivering the Government’s ambitions for tourism?

Joss Croft

Tourism is everyone’s business, for a start. One of the challenges that we have is that not all the levers required for a successful visitor economy sit within the Department for Culture, Media and Sport. We have heard about aviation from the Department for Transport. We have the Treasury around the taxation system, the Home Office around the visas and the ETAs, and DEFRA around some of the rural communities. We need a growth strategy that has delivery mechanisms within it, named delivery bodies across Government and accountability there. We would like to see some type of strategic tourism panel that sits across a lot of decision making across Government. We heard earlier today about the intraministerial groups, which is absent at the moment. We need to see that accountability that sits across Government within that growth strategy whenever it arrives. Without some of those delivery mechanisms, the targets and the proper funding, a strategy is purely a wish list. We really need to see within that funding commitments over a serious amount of time and multi-year resources. We need the timetable. We need the accountable delivery bodies. That needs to sit across Government as well.

Jeff Smith

Laura and Merryn, would you agree? Do you have anything to add?

Merryn Kidd

Taking Laura’s example of Visit London sitting within the broader economic infrastructure, we need tourism to be treated as part of that infrastructure rather than just some marketing subject.

Jeff Smith

That seems to be a clear priority for the forthcoming strategy. What other key priorities would you like to see?

Joss Croft

In terms of the Tourism Alliance, we would like to see various elements within it. As I say, it needs to be that cross-government approach to it. We need to try to improve, where we can, any of the understanding across officials and Ministers in terms of the importance of the visitor economy to placemaking, employment and jobs. There is a whole raft of activities within the submission that we have made, but a lot of it is around multi-year funding, measurable targets and named delivery bodies that will really help our sector achieve its ambitions. We have lofty ambitions, and we need to make sure that those ambitions and the opportunity are matched by the investment from Government as well. We have a £50 million target. That is achievable. We need to make sure that that economic benefit is spread across the whole of the United Kingdom. We need the structures and the support through the LVEPs that will enable that target to be met as well.

Merryn Kidd

I second that.

Laura Citron

Tourism was not identified as a priority sector in the modern industrial strategy. At a London level, it is one of our five priority sectors in the London growth plan. In London, we have chosen to define it as the experience economy rather than tourism, the distinction being that the experience economy includes the spend of the 9 million Londoners who, for us, are a very important audience. It also recognises that the value of the experience economy is not just in the economic benefit of the transaction itself but in the placemaking, and that the experience economy is what makes London a destination that global talent wants to be in and that global investors want to be in so that the sector has a value beyond its direct GDP. That is why we have defined it as the experience economy. In London, it is in our industrial strategy. It is one of the five priority sectors. That has made a significant difference, I think, to the commitment of the strategic authority to continue to invest in it and to our ability to convene industry and stakeholders around it. As we have heard, this sector will always be a team sport. Nobody will ever hold all the levers. Besides all the ones that you have mentioned at national level, even within London, we might be the LVEP but we are so reliant on local councils, Transport for London, the police and, of course, industry, which is the one that delivers the product every day. We have to think about this as a team sport.

Chair

Last but not least, Alison.

Alison Hume

Thank you, Chair. Coming off the back of the national visitor economy strategy, tourism and growth are so closely aligned, and it seems to me that with coastal destinations—I should say I am the chair of the APPG for coastal communities—some of our towns on the coast are the most attractive to visitors but the hardest to get to. Would you agree that the transport corridor issue, which has been touched on, is so important when Government are drawing up the strategy? Perhaps I could come to you first, Joss.

Joss Croft

Yes, absolutely. We need to react to the modern-day realities. A lot of the infrastructure developments that you see around rail in terms of engineering works take place during the school holidays at exactly the time that visitors are likely to be travelling. I saw Network Rail saying that the busiest day on the English railway system is Friday, and that is because of commuters. You may see a decrease of commuters on the Friday, but it is also those leisure visitors travelling. The busiest day on the Scottish transport system is a Saturday these days. Why on earth are we having engineering works on the days when visitors want to move mostly? In some areas, it is going to be last mile, and in some areas it is going to be last 25 miles. How can technology help assist with that either in terms of managing the existing infrastructure or, looking to the future, how can it help some of those transportation issues? It absolutely has to be key. All tourism relies on three things: means, money and motivation. Do people want to go there? Do they have the money to do it? Can they access the destination? That access to a destination is absolutely key. Most international visitors when travelling on a city break do not want to travel more than two hours from their point of entry into the country for a short break. Realising that regional ambition and that regional economy is about making sure that we are able to encourage more direct routes into some of the regional airports, because that would facilitate access to some of these coastal and rural destinations.

Merryn Kidd

For Somerset & Exmoor, we have some very well-known coastal destinations such as Weston-super-Mare, Burnham and Minehead. They are mostly popular with domestic visitors. A lot of people from the midlands choose to visit that area. They can just about make it on the train a certain distance, and then it all falls to pieces. One of the most beautiful bus routes is from Porlock through to Lynton and Lynmouth. My colleague from Visit Exmoor is sitting behind me. I believe they have to fight for it in tourist season every year to run at decent times. It is an absolutely stunning bus journey, and yet it keeps getting the threat of being cut. How are we to get people to Minehead or Lynton and Lynmouth if we do not have those bus services?

Laura Citron

You do not need to hear from me on coastal tourism.

Joss Croft

Could I add on that? We talked a lot about the overnight visitor levy. I mentioned it tends to work best when the visitors can see what they have actually invested in. There are examples across Europe. When you arrive at Interlaken and you go to your hotel, you will be given a little booklet. Of course, it could just as easily be a digital booklet nowadays. That allows you free travel with your bicycle on the local bus services. That free travel with your bicycle on local bus services is also available to local residents, and it is supported by the overnight visitor levy. You can see how that might help in driving some of that regional spread in a more sustainable fashion to get people out and about and to some of these destinations that are perhaps slightly more challenging to reach.

Chair

That is really helpful. Thank you very much. Thank you for your time today. You have all been brilliant. We are really grateful for all your very thorough answers to our questions. Before I let you go, was there anything that you were burning to tell us that no one thought to ask you? Joss?

Joss Croft

I referenced it before. The sector needs a five-year funded growth plan. It needs to be published. There needs to be accountability across Government. There needs to be investment in destination development and investment in marketing.

Chair

I am writing it all down.

Merryn Kidd

Tourism is a key opportunity for growth. If we are looking for growth in this country, we know there are huge opportunities.

Chair

A recognition of the huge firepower of tourism to drive the growth that the Government are looking for.

Merryn Kidd

Yes.

Chair

Very good. Laura, finally.

Laura Citron

I would come back to the very first question, which is that we have made really significant progress on getting the right governance structures in place. Now we need to fund them to be effective.

Chair

Brilliant. Thank you very much, all of you.