Terry Stevens says the Welsh Government should address a malaise affecting our tourism industry
Overnight in July 2004 Wales was placed in the unenviable position of being amongst a small minority of countries around the world without a national tourism organisation. At the time I wrote:
“When the UN World Tourism Organisation is stressing the importance of having strong national tourist boards, along with competent local delivery systems, Welsh politicians have ignored international best practice”.
In so doing they neutered an essential vehicle for tourism development. Five years on and the results are telling. They reflect an economic sector struggling to be competitive in a global marketplace.
Read in isolation the headline statistics about tourism in Wales appear to be impressive. As of March 2011 Visit Wales – the Welsh Government’s tourism department – announced that the industry was worth over £3 billion. It constituted 6.1 per cent of all economic activity, 13.3 per cent of GVA in mid Wales and 3.9 per cent in south east Wales, and supported 104,000 jobs (8.7 per cent of all full-time equivalent jobs in Wales).
However, at the same time the Welsh Government’s Official Statistics Wales website was painting a somewhat different picture. In the period 2005–09 expenditure by UK domestic visitors to Wales had declined from £1.73 billion in 2005 to £1.41 billion five years later, a decrease of £317 million or 18.3 per cent (3.7 per cent a year). This was at a time when tourism was growing in Europe at between 2.5-3 per cent. In 2009 the value accrued by UK domestic tourist trips and bed nights spent in Wales was significantly less than in 2000.
On the other hand, international tourism has shown marginal growth. In 2005 Wales attracted 333,000 international tourists who spent £312 million. Five years later the numbers had increased to 394,000, (that is 3.5 per year and 18 per cent overall), and spend by £20 million (6.5 per cent or 1.3 per cent a year) to £332 million.
The demise of the Wales Tourist Board may go some way to explain or excuse this disappointing downturn in our tourism economy. However, it is not primarily the fault of Visit Wales. There are more fundamental issues. Longer term analysis of figures for UK domestic tourism activity in Wales shows that tourism has been static and, arguably, under-performing for 20 years. The value of tourism has only grown by £513 million since 1990 – that’s approximately £26 million a year, the equivalent impact of hosting two FA Cup Finals or three major internationals in the Wales Millennium Stadium.
This 20-year period has seen significant growth in international tourism and up to 6 per cent growth a year in some regions of Europe. This level of growth has been recorded in countries with a mature tourism industry such as Switzerland and Austria, as well as in countries like Slovenia and Croatia that have had to reinvent themselves due to civil strife. Ten years ago even in Switzerland tourism was stagnating and changes had to be made. Today it tops all global performance benchmarks.
Similarly, in 1990 Barcelona set about successfully transforming its tourism economy, leveraging the 1992 Olympics. Eight years later it has now reinvented its tourism brand and organisation leading to the UN World Tourism Organisation stating that it is amongst the best destination management structure in the world.
So, if others can get it right it suggests that there is something more substantially and structurally wrong with the way tourism is organised in Wales. What restricts our ability to respond to the dynamics and growth in the marketplace in a competitive way? There are three main answers:
- The organisation of our tourism industry remains wedded to a way of working forged by a piece of legislation 40 years old.
- We continue to ignore the lessons learnt by successful, competitor destinations around the world.
- We do not benchmark against leading destinations.
At the heart of the problem is a failure to understand the principles of destination development and to create the appropriate type of strategically focused organisations that drive tourism at the destination level.
A destination is what visitors understand. It is a relatively small geographic area that is the place of consumption of most tourists’ activities and spending. The destination, therefore, has to be well managed and marketed. The UN World Tourism Organisation has recently stated that there is a direct correlation between tourism success and the existence of effective destination management organisations.
This requires a private sector led, and public sector supported approach. The World Economic Forum’s Tourism Competitive Index highlights the crucial role played by private sector led destination organisations in the world’s most successful and, hence, competitive destinations.
In association with the University of Calgary, in 2006 my company Stevens & Associates analysed 22 countries and 16 destinations which were outperforming other places in the world in tourism. The conclusions showed that from Istria in Croatia to Summit County in Utah, and from Gorenjska in Slovenia to Turku in Finland, they all had a similar organisational structures. They focused on specific destinations within their countries or regions, such as Swansea Bay, Snowdonia or Ceredigion in Wales. Further, they ensured that the industry at this level was business-led and worked to achieve the following:
- Creation of unambiguous destination brand positioning .
- Critical mass, so that around 20 per cent of the destination’s tourism firms delivered by around 80 per cent of the business.
- Strategy led by a Board responsive to the market drivers of tourism in the destination.
- Respect community interests.
- Emphasise innovation and creativity.
Three anecdotal comments from leaders in these successful destinations stand out as tenets we should seriously reflect upon:
- Ignore anyone who says I do it this way.
- Ignore anyone who speaks in a past tense, for example saying We tried that, or We used to do it this way.
- Don’t ask what the organisation can do for you; rather, ask what you can do for the destination.
Myles Rademan, inspirational former Director of PR and Leadership for tourism in Utah’s Summit County, acknowledges that these ‘principles’ can be difficult for many who have enjoyed a comfortable but ineffectual role in tourism in the past. However, he is adamant that strategically focused leadership is essential if often unpalatable. As he puts it, “If the moon listened to all the dogs that barked it wouldn’t rise each night”.
At present our tourism organisations are dominated by risk averse, non market focused public bodies with local authorities often ‘leading’ tourism strategies. As a result, the industry is characterised by a lack of innovation and creativity in its product development and marketing. The industry is over reliant upon subsidies and handouts which prevents innovation. Small voices continue to shout loudly and, worse, are all too often heard at the expense of those whose businesses can make a real difference.
We need to shift to a culture where icons and drivers of tourism lead and receptors or beneficiaries of successful tourism take a back seat. As uncomfortable as this may sound it is how others approach the way their industry is led and organised. Often, this means leadership by people outside the tourism industry.
Do we have the appetite and the hunger to do things differently? If we don’t more of the same will simply take us to the place that the British Association of Chambers of Commerce defined in its August 2009 report:
“Britain has the worst performing tourism economy of the expanded Europe of 27 countries other than Romania”.
We need a new way of working. In his new Cabinet following the May elections, First Minister Carwyn Jones moved responsibility for tourism from the Heritage to the Economic Development portfolio, handing responsibility to Edwina Hart. A key question now is whether the new Minister has the appetite to deliver a fresh, dynamic and competitive future for tourism in Wales.
If she chooses to do so Edwina Hart has an opportunity to make a real difference. Her first step should be to move responsibility for providing national leadership for Welsh tourism to a new arms-length private-sector led organisation, outside the civil service. This should be charged with ensuring that entrepreneurial values percolate to every level of tourism’s organisation and leadership in Wales.
This is clearly another area of our public/economic life that has and is likely to go south due to the political elite that has been created in Wales since devolution in 1999. The whole political process has been dominated by an agenda that has been public sector/inward looking and the economic results like in tourism are now bearing fruit or otherwise. Two recent articles in Telgraph regarding the influx of “middle class” Chinese people visiting into UK, and in particular sales in London shops, and visitors to Bath because of its Roman remains, show that there is a “market” for us to tap into. How many I wonder of the “new” tourists from both China and India actually come over the severn bridge, precious few I would guess and looking at world economy thats where a large part of growth in tourism is likely to be found. Apparent our Prime Minister asked the Chinese President how the UK could attract more Chinese people to visit our shores and the reply was “create more Bicester shopping centres”. Perhaps we should tell him that we’ve got SARN, however that is pretty pathetic compared to the one outside Oxford. The “track record” of Ms. Hart does not give any indication that radical changes will be made to the tourism industry so the likelihood of major improvements in performance is unlikely.
“We need to shift to a culture where icons and drivers of tourism lead” Couldn’t agree more. Take Talacharn (Laugharne). Ought to be a buzzing, vibrant centre of the global Dylan Thomas industry. Instead, except for one or two new local businesses who are building good products, it’s a boring backwater. Where’s the signage of the main road? (One pathetic little thing which you’d miss if you blink). Where’s the dominating statue of the great poet? (Look at what’s there). The vandalism of Brown’s Hotel – especially its iconic interior – is a national scandal. Didn’t anybody notice? Where are the signposts to Dylan and Caitlin’s grave? The Boathouse is a cheap laugh: municipalised to monochrome mediocrity. You can’t even stand on the outside balcony, from which Dylan viewed the ‘heron-crested shore’.
Another example is the tourist information point at Cardiff Airport. A boring, cluttered 1960s, badly managed literature booth. Haven’t these people heard of moving images?
Some of our unique selling points are our landscape (c. f. wind turbines!), heritage (vastly under-enlivened), language and other aspects of our distinctive culture (c. f. Ireland). The potential is vast. It’s just that – with very few exceptions – those in charge either don’t care or have no imagination. At least some of them are distinctly ‘un-Welsh’.
In response to Howell Morgan, all these failures were pre-devolution. The post 1999 disappointment is that the same dull bureaucracy and mind-sets still predominate.
On the basis of the figures quoted and the arguments offered, Professor Terry Stevens is absolutely right to suggest responsibility for providing national leadership for Welsh tourism should be moved to a new less arms-length private-sector led organisation, outside the civil service, and the sooner the better.
Perhaps, however, we can go even further and put tourism management and development in Wales out to tender to see whether there are organisations in Wales or beyond that would be willing to provide these services for a fee. As well as injecting a new less risk-averse culture this would also have the advantage of reducing the size of public sector employment in Wales and creating jobs in the private sector.
Certain criteria and objectives would of course be set against which the bids would be judged. For starters, the successful bidder would be expected to show how they might increase the number of visitors overall to Wales and the number of higher spending visitors in particular, including overseas travellers. There could be requirements too in terms of securing improvements to the Welsh offer – more higher end hotels and restaurants, better standards within budget priced accommodation and a better spread of tourist activity and facilities around the country. The new authority would also be expected to reduce of dependence on low revenue activities such as caravan parks within the overall Welsh tourist offer and to increase the contribution made by higher value tourist activity such as golf, and cruise ship visits. The occasional calls by cruise ships into ports in Wales still receive significant media publicity when they should be regarded as a normal part of the country’s tourist activity as they are in Scotland and Ireland.
Managers and employees of Visit Wales, the tourism department within the Welsh Government could, if it wished, put in a bid to run this new service but the aim would be to attract the widest range of other organisations, including professional services bodies such as accountants and consultancies to come in with new ideas. The winning organisation would be expected to show how they could perform the services while at the same time making savings on the existing budget or at any rate working within it.
Existing staff working within tourism could expect to find jobs within any new organisation and would have employment rights protected as has happened elsewhere where organisations have moved from the public to the private sector. Any contract with a new tourism management and development services provider would be subject to a time limit of say five years before being let again and strict performance targets would need to be set for each of the individual years in question with a break clause if these were being seriously missed.
It is not a model which will be greeted with much enthusiasm in Cardiff Bay where risk aversion is often the order of the day but one that is surely worth trying. If it works it might also offer a way forward for economic development in Wales, another area where performance since the ill-fated Bonfire of the Quangos removed the Welsh Development Agency has failed to live up to expectations.