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LGA - English tourism can soar under devolution, say councils

English tourism can soar under devolution deals with new figures revealing the tourist industry is set to grow by nearly three per cent every year over the next decade, research by the Local Government Association revealed today.

With tourism emerging as one of the fastest growing industries, the LGA said local areas can use the devolution agenda to turn their cities and counties into thriving tourist hotspots for the growing ‘staycation' market and overseas visitors.

To mark World Tourism Day, new research commissioned by the LGA shows that domestic tourism is predicted to grow 2.9 per cent every year over the next decade, which is more than the overall economy (2.5 per cent).

It follows latest industry figures which reveal there were 103 million overnight trips in England in 2015, an 11 per cent increase compared to 2014, and an 8 per cent increase in expenditure compared to 2014, with a total spend of £19.6 billion.

Regions which saw the biggest increases in overnight trips include the West Midlands (+22 per cent), Yorkshire (+20 per cent), the South West (+14 per cent) and London (+14 per cent).

Councils are already enjoying huge economic returns on investment in tourism through ambitious projects. They include:

  • Plymouth City Council – Plymouth has enjoyed visitor growth of over 28 per cent since 2008 and an increased spend of 23 per cent in turn has helped to increase overall jobs in the sector by 92 per cent to just over 8,000 – 7 per cent of the local economy. The strategy has included being re-branded as ‘Britain's Ocean City' in 2013 ahead of the 400thanniversary in 2020 of the Mayflower sailing which is to be celebrated on a globally significant scale
  • Staffordshire County Council - adopting a new strategic approach to sport, "Sportshire", is paying dividends for tourism. Hosting Ironman Staffordshire 70.3 and the UK Corporate Games, both in 2015, attracted 16,000 visitors into the area, creating an economic boost of £5.4 million. Staffordshire secured a three-year contract for the long-distance Ironman triathlon
  • Liverpool City Council – to boost the city's tourism industry, which is worth nearly £4 billion a year, the council is using its borrowing power to provide an upfront capital grant which is repaid by reduced revenue funding, or increased lease charges if it's a council-owned building. The grant is used for venue refurbishments, resulting in a boost in revenue and visitors, making them more sustainable. To date, The Philharmonic Hall, Royal Court Theatre and Unity Theatre have all benefited.

The LGA is urging the Government to keep up the momentum on agreeing devolution proposals to further boost tourism-led growth. The recently announced Tourism Action Plan is a step in the right direction, but much more could be done to put the levers of growth in the hands of local leaders.

By focusing on improving transport, infrastructure, skills and business support - all central to devolution deals and key to boosting tourism - combined authorities and other similar arrangements can make better, more efficient decisions to maximise tourist revenue.

Crucially, councils and local partners can link these policy levers to enhance the distinctiveness of destinations, including high quality attractions and skilled labour to drive England's tourist economy and unlock further growth.

With UK residents increasingly holidaying – and spending – at home rather than abroad, this is a trend that devolution deals can exploit. The UK's tourism deficit - the difference between money spent by UK residents holidaying abroad and money spent in the UK by overseas visitors - has fallen from a peak of over £20 billion in 2008, to under £14 billion in 2014.

Even with this trend, less than 40 per cent of England's total holiday spend goes on domestic tourism, which offers significant potential growth for devolved powers to target by offering high quality destination experiences that will keep people holidaying at home and persuade international visitors to London to extend their stay to the rest of the country.

Reports of a jump in tourist spending following a softening in the pound post-Brexit further underline the potential of tourism for local economies.

Councils will also be able to keep all locally raised business rates by 2020 which will further incentivise councils to attract and retain businesses in local growth sectors, including tourism.

Cllr Ian Stephens, Chair of the LGA's Culture, Tourism and Sport Board, said:

"Councils have long recognised, and supported, the value of tourism to local growth, jobs and prosperity, which the devolution agenda should be primed to exploit.

"The tourist economy is one of the UK's fastest growing economic sectors and councils have the opportunity to align their devolved responsibilities to improve their tourism offer to best showcase their unique identity and heritage, from food and drink and natural landscape to historic buildings and traditional festivals.

"Local areas have already capitalised on recent tourism opportunities and councils can use devolution deals to improve transport, infrastructure, skills and business support, which are crucial levers to maximise the tourist pound and economic growth.

"Decisions about these critical success factors for boosting tourism are best taken at the local level, which devolution deals stand to make possible through combined authorities and similar local governance arrangements.

"The move to full localisation of business rates in 2020 means that it will be even more important for councils to support and attract tourism-related businesses, where this is a local growth priority.

"There is significant growth potential from tourism and our analysis highlights an opportunity for increasing staycations in order to close the UK's large tourism deficit.

"By creating the wider conditions for the visitor economy to thrive, local communities also benefit from a successful local visitor economy with an increased choice of facilities such as places to eat out, local shops, events and exhibitions, as well as conservation of local heritage and the natural landscape. 

"The Government needs to keep up the momentum on agreeing devolution proposals to further boost tourism-led growth and transform local economies."

Case studies

Plymouth City Council

Plymouth re-branded as ‘Britain's Ocean City' in 2013 as part of its first ever Visitor Strategy launched in 2010. With the 400th anniversary of the Mayflower sailing in 2020 the city aims to grow visitors to the city by 20 per cent and spend by 25 per cent up to 2020 in line with a huge ambition to commemorate the anniversary on a globally significant scale. Since the baseline figures were established in 2008 visitor growth of over 28 per cent and increased spend of 23 per cent in turn has helped to increase overall jobs in the sector by 92 per cent to just over 8,000 – 7 per cent of the local economy. Looking forward to 2020, Plymouth has aligned itself behind the Mayflower plans and has in process unprecedented capital development of over £70 million as well as a major commitment of over £2.25 million revenue from the city council to supporting the project. Projects include a new hotel development, coach hub, re-designed railway station and cruise terminal as well as a £40 million extension by British Land to their Drake Circus development. It is estimated that more than 25 million Americans are descended from the Mayflower pilgrims and Plymouth is working closely with the national partnership to ensure that the UK benefits not just in 2020 but significantly beyond.

Staffordshire County Council

Developing from the City Deal process, Staffordshire County Council has adopted a new strategic approach to sport, "Sportshire", which is attracting visitors and boosting the local economy through major events and sporting infrastructure. The main aims were to increase the number of overnight stays and subsequent visitor spend, which are low in comparison to West Midlands counterparts, and attract more high spending visitors. In Year 1 (2015), this was achieved by hosting Ironman Staffordshire 70.3 and the UK Corporate Games. These events attracted 16,000 visitors into the area, creating an economic impact of £5.4 million. Staffordshire secured a three-year contract for the long-distance Ironman triathlon.

Liverpool City Council

Liverpool's tourism industry is worth nearly £4 billion a year. One of its biggest challenges is funding cultural organisations which play a vital role in tourism landscape. Invest to Save is an initiative in which the council uses its borrowing power to provide an upfront capital grant which is repaid by reduced revenue funding, or increased lease charges if it's a council-owned building. The grant is used for much-needed improvements to the physical condition of a venue, resulting in a financial and visitor number boost, making them more sustainable. To date, The Philharmonic Hall, Royal Court Theatre and Unity Theatre have all benefited. This work directly supports the City Region's plan to grow the visitor economy's value by £200 million by 2020.

Notes

  1. The LGA commissioned RCS to analyse the added value devolution could bring to visitor economy-led economic growth in England. Their findings are revealed in LGA publication Local Solutions: Boosting the Visitor Economy which can be viewed at: http://www.local.gov.uk/documents/10180/7632544/12.1-English+Devolution_10WEB.pdf/1b478f6f-3d20-4b2c-ae67-44003d54443a
  2. Tourism is the UK's third largest employer, supporting almost one in ten jobs and accounting for 9.5 per cent of total employment. The UK is the sixth largest international tourism destination ranked by visitor expenditure. On average, an overseas visitor spends £609 per visit and stays an average 7.7 nights. There are over 125 million domestic visits every year. On average, domestic visitors spend £199 per visit and stay 3.1 nights.
    UK Tourism Statistics 2016, Tourism Alliance.www.tourismalliance.com/downloads/TA_390_415.pdf
  3. More than 34 million overseas visitors visit the UK every year, spending more than £21 billion.
    2014 Travel Trends, Office for National Statistics, May 2015. www.ons.gov.uk/peoplepopulationandcommunity/leisureandtourism/articles/traveltrends/2015-05-20
  4. The UK's tourism deficit has fallen from a peak of over £20 billion in 2008, to under £14 billion in 2014 as more people holiday at home.
    2014 Snapshot, VisitBritain/VisitEngland. www.visitbritain.org/2014-snapshot
  5. 103 million overnight trips were recorded in England, an 11 per cent increase compared to 2014. There was an 8 per cent increase in expenditure compared to 2014, with a total spend of £19.6 billion.
    VisitBritain/VisitEngland press release, April 2016.
  6. A softening in the pound post-Brexit and a recent rise in spending by tourists further underlines the potential of tourism for local economies.
  7. The Tourism Action Plan outlines how the Government will be supporting the tourism industry and ensuring the benefits of tourism will be felt across the UK.
  8. World Tourism Day is on September 27, 2016.
  9. By May 2016, around a dozen devolution deals had been signed and 34 proposals from English cities, towns and counties submitted to the Government.

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