Additional Submission by the Scottish Enterprise 16 April 2008

Transcription

1 Additional Submission by the Scottish Enterprise 16 April 2008 Thank you for the opportunity for Scottish Enterprise (SE) to give evidence to the Economy, Energy and Tourism Committee on 16 April in relation to its current inquiry into tourism. There were a number of pieces of additional information which we agreed to provide. In addition, there is some additional information that we feel would be useful to the Committee in its tourism inquiry. Reflecting the discussion at the evidence session on the 16 th, this additional information focuses on the topics of: SE s contribution to the development of the tourism industry in Scotland. Skills needs in the industry and SE s role in helping the industry to address these. SE s role in supporting the development of Destination Management Organisations. Industry research needs Under the appropriate heading we will include the additional information requested by the Committee on: The numbers of participants in Scottish Enterprise s tourism support programmes. The skills needs of the industry. Scottish Enterprise financial and people resources allocated to skills development in tourism. Scottish Enterprise tourism support Tourism is one of SE s 6 Priority Industries and our involvement in the industry is geared to supporting the industry to reach the 50% growth target set out in the industry strategy the Tourism Framework for Change. The nature of the support we provide reflects our remit as Scotland s enterprise, innovation and investment agency and focuses on the following. Advice to tourism businesses on key aspects of tourism business development such as service quality, staff recruitment and retention, e-business etc. Given the very large number of tourism businesses in our area, much of our advisory support involves working with groups of businesses through seminars, workshops and conferences. This has the added value of providing tourism businesses with opportunities to learn from each other and network. Promoting higher levels of innovation in tourism. This is primarily aimed at helping tourism businesses to make more of key Scottish tourism assets such as golf, Scottish food produce, whisky, the forests, sailing and cultural assets such as Glasgow s Mackintosh heritage in the products and services they offer their visitors. Often this involves tourism businesses working together to offer new visitor experiences e.g. activity and accommodation providers, golf courses and hotels etc. Encouragement for investment in tourism. This encompasses both work with SDI to encourage inward investment in tourism and direct funding support for key infrastructure projects e.g. the new SECC arena, the expansion of the EICC in Edinburgh, the current Usher Hall refurbishment, City and Town centre improvements in Glasgow, Edinburgh and St Andrews etc.

2 We believe it is important that we deliver this support in an integrated way and that this can best be achieved by working with industry and public sector partners through local destination partnerships. More information on our role in this area is provided below. Some examples of the support SE provided to the tourism industry in 07/08 are. A Tourism Management Programme of conferences, workshops and seminars with a total of 1003 participants. An SE area wide programme of Tourism Innovation Workshops attended by 211 participants from businesses and partner organisations. A joint programme with the Scottish Tourism Forum of workshops and follow-on business advice on e-business in tourism attended by 125 participants. A joint service quality programme with HIE 100k Welcomes with 2300 participants across Scotland. Over 600 participants in local training programmes run through the former Local Enterprise Companies on topics such as recruitment and retention and workforce development individuals in training in national training programmes including Modern Apprenticeships. 139 tourism businesses receiving more intensive individual support as a result of their growth potential or importance to the economy. Funding support to industry projects on golf, whisky, country sports, angling, forest tourism, ancestral tourism, sailing, wildlife tourism and the built heritage. Development with HIE of a Tourism foodkit, a web-based resource to encourage tourism businesses to source and use fresh Scottish produce. Funding with HIE and VisitScotland for the industry-led Tourism Innovation Group and Pride & Passion projects. Funding and other support for the destination partnerships in Edinburgh, Glasgow, Loch Lomond & the Trossachs, Deeside, Perthshire and St Andrews. The production and distribution of market intelligence resources to around businesses as part of the Tourism Intelligence Scotland joint initiative with HIE and VisitScotland. In summary, in 07/08 SE s support programmes attracted an estimated total of over 6000 participants, albeit there will be a degree of double-counting for people who participated in two or more of our events or other support programmes. Skills Skills needs The main skills needs of the industry are set out in the industry strategy, the Tourism Framework for Change. These are identified as: Management and leadership skills Workforce skills (service quality and chef skills) Recruitment and retention. These priorities were identified by way of a Skills Summit which involved representatives of tourism businesses, industry bodies and government agencies including SE, HIE and VisitScotland. The action to follow through on these priorities is being drawn together by People 1 st, the Sector Skills council for Hospitality, Leisure, Travel and Tourism in the form of a Training Action Plan. SE s contribution

3 to the delivery of the Action Plan focuses on the Tourism Management Programme, the Innovation workshops, the e-business workshops and the 100k Welcomes service quality programme mentioned above. A further key source of information on Scottish tourism employer skills needs comes from the survey of employers in the Hospitality, Leisure, Travel and Tourism sector undertaken by Future Skills Scotland (FSS) in This provides information on key characteristics of employment in the sector from the point of view of employers. These are: In terms of priority, attracting appropriately skilled staff was only ranked 5 th in the list of main challenges identified by tourism employers behind other factors such as business regulations and increasing competition. The sector has the youngest workforce of any; 38% of employees are aged 16-24, more than double the average figure of 16% for all sectors. There is a high incidence of elementary jobs (41%) and personal service staff (22%) within the sector. At an average full-time wage of 269, wage levels are lowest of all industry sectors at 38% below the average for all sectors of the Scottish economy. Staff turnover rates are the highest of any sector at 45%, more than double the average rate of 20%, (This is likely in part at least to be due to the seasonal nature of work in parts of the industry) The main skills gaps are in the area of what is often termed soft skills i.e. customer handling, communications, problem solving and team working. While the incidence of training in hospitality and tourism is around the average, the proportion of businesses that train beyond statutory requirements (Food Hygiene, Liquor Licensing, Health and Safety) is below the average; (14% as compared with 35%) There is a range of industry and public sector organisations providing support to the tourism industry in Scotland in the area of skills and recruitment: Industry support organisations: People 1 st - the UK-wide Sector Skills Council for the Hospitality, Leisure and Travel and Tourism industries. Springboard Scotland - promotes careers in tourism and hospitality. Hospitality Industry Trust Scotland funds scholarship and provides bursaries to support students. Institute of Hospitality UK wide body providing support for continuing professional development in the sector. Public sector support for skills in tourism: Education sector: schools, FE Colleges and Universities SE and HIE Skills Development Scotland (From 1 April 2008 bringing together Careers Scotland, LearnDirect and the national training programmes formerly run by SE; (SkillSeekers, Modern Apprenticeships) Skills development key issues Based on SE s experience of working with tourism industry on skills development we would highlight the following as key issues:

4 The labour market. The labour market is changing as a result of demographic changes, migrant workers and competition from other sectors. Also labour market conditions vary across Scotland affected by varying levels of unemployment, transport services, housing and levels of demand from other sectors. Tourism businesses need to take account of both these overall market trends and local labour market conditions in their recruitment activity. SE is undertaking a study of the labour market for tourism over the coming months as a basis for providing further support to tourism businesses in this area. Recruitment and retention. The general view is that the industry has a mixed reputation as an employer. It can offer interesting, sociable and varied work and quick career progression. However, it is often associated with long hours and low pay. Employers who offer good terms and conditions, and training and career opportunities are able to build a reputation of being good employers and find it much easier to attract and retain staff than those who do not. SE and HIE have provided substantial support to industry in the area of recruitment and retention in recent years to improve business recruitment and retention practices. Training demand and supply. Much of the debate on training in the industry focuses on the supply side e.g. lack of information, confusion over range of training provision and qualifications, funding support etc. However, there also needs to be demand i.e. employers, who have the primary responsibility for training their staff, have to want to do so (preferably beyond the statutory requirements.) Smaller tourism businesses, in particular, have difficulty in freeing up staff time for training. They often don t have internal resources to support staff training but at the same time are reluctant to pay for external training support. A local approach. Skills issues are now increasingly being addressed as part of the work of local destination partnerships. As an example the St Andrews World Class group is, with funding and other support from SE, establishing a Skills Academy as a mechanism through which industry and support organisations will work together to identify and address recruitment and training needs. The Academy will in effect act as a broker to help identify the right training solutions from whatever source, public or private, as best meets the needs of the industry. Allocation of SE resources to skills development in tourism SE s total spend on tourism projects in financial year 2007/08 was just over 11m. ( 11,060k). It is difficult to separately identify skills projects as many of our business development and product development projects have a skills component. However, we estimate that the budget associated with tourism projects where skills development is the main focus is 956k. This represents around 9% of total SE tourism spend. However, in interpreting this information the following factors need to be taken into account: Tourism skills activity is relatively low spend compared to major capital investment projects which make up the bulk of the 11m tourism spend. The priority that we attach to skills development is better reflected in the allocation of people resources to tourism skills development. Again it is difficult to identify this when individual members of staff are working across a range of skills and non-skills tourism projects but we estimate that around 25% of SE tourism people resources in 07/08 were applied to tourism skills activity.

5 The above analysis refers only to tourism specific projects. In addition SE spent 3,577,938 on tourism and hospitality Skillseekers and Modern Apprenticeships in 2007/08. Levels of tourism skills activity are heavily dependent on industry demand i.e. simply increasing spend on skills projects will not necessarily lead to a commensurate increase in take up of skills development activity in the industry. Destination development and DMOs As mentioned earlier, SE believes that the most effective way to organise the development of tourism is through local destination partnerships. These ensure that private sector and public sector investment is coordinated behind a common plan and most value is derived from that collective investment. SE and HIE use the term destination development to describe the approach to the development of tourism at a local destination level. This reflects an emphasis on growing tourism in line with the 50% growth target. The approach is much wider than just marketing and places more emphasis on the quality of the visitor experience on the ground as the primary driver of a destination s reputation and success. Destination Management Organisations are the organisations or partnerships that lead and manage the destination development process. In order to bring some consistency of approach across Scotland in this area, SE and HIE, with input from VisitScotland also, recently produced a Destination Best Practice Guide. This was launched at an industry conference on destination development organised by SE in December There is no standard model for DMOs. These should suit the needs of individual locations. However, there tend to be two main models emerging in Scotland: Partnership groups which bring together the industry and the public sector with each playing agreed roles in the delivery of a common plan. In this situation the DMO would have no resources or staff of its own and would rely on delivery via businesses, industry bodies, government agencies, local authorities etc (e.g. Edinburgh Tourism Action Group, Glasgow Tourism Partnership) Separate bodies e.g. companies limited by guarantee, that undertake destination development and management activities directly at their own hand on behalf of the stakeholders. They would employ their own staff and have their own budget. Sources of funding would include business membership subscriptions and funding from enterprise agencies and local authorities. (e.g. Aviemore, Deeside, SAWC) SE s support for destination development and DMOs includes: Initial encouragement and practical support for businesses and public sector partners to come together to work on the development of a destination e.g. early stages of St Andrews World Class, Edinburgh Tourism Action Group and Deeside Tourism Group. Leadership and funding for projects to support the development of the DMO itself e.g. market research, vision and strategy development, business planning and funding of DMO staffing meeting etc costs: St Andrews, Deeside, ETAG.

6 Funding, alongside partners, for a wide range of projects that are part of the delivery of the Destination Plans e.g. Events programmes e.g. Edinburgh, Glasgow, Loch Lomond Business development support e.g. Loch Lomond & Trossachs National Park Hospitality and Green Tourism programmes. Skills and recruitment e.g. St Andrews Skills Academy, Edinburgh Skills Passport, Glasgow Service Initiative. Product development e.g. Mackintosh group in Glasgow, Golf in St Andrews, Big Tree Country Perthshire, Edinburgh festivals development. Infrastructure projects e.g. new SECC Arena in Glasgow, EICC expansion in Edinburgh, environmental improvements in the Merchant City Glasgow, Edinburgh City Centre and St Andrews, and cycle and walking route development in Perthshire. Research needs A priority from SE s point of view is to ensure that tourism businesses have access to good market intelligence to inform the investments that they make in product development, service standards and new facilities. Many small businesses do not have ready access to this kind of intelligence and also may be unclear about the implications for their businesses. In order to help address this, SE is leading the development of two key projects: Tourism Intelligence Scotland A key issue identified in the industry strategy, Tourism Framework for Change is the lack of effective gathering and utilisation of market intelligence as a driver innovation and product development. In response, SE has led the establishment of Tourism Intelligence Scotland (TIS) as a joint project with HIE, VisitScotland and the industry itself. The core purpose of TIS is to collate and disseminate market intelligence to industry in a form that is easy to use and that will help to stimulate investment by businesses in facilities, visitor experiences and services that meet the needs of the visitor. TIS has been operating since September 2006 as a joint SE, HIE, VisitScotland project team and to date the following has been achieved: Development of a joint SE, HIE, VisitScotland research database. The establishment of an industry leadership group to help take TIS forward and to promote a sharing of market intelligence across the industry in Scotland. Publication of two research resources for industry on Walking Tourism and Scottish Tourism in the Future disseminated to 8,500 and 11,000 businesses respectively. (Feedback from industry to these has been substantial and very positive) Creation of a website ( ); Over 3,000 businesses have now registered with the TIS website to receive further research publications. International research to investigate best practice and current thinking in this area from around the world The development of a 3 year business plan to enhance the resources available to TIS and drive the project forward Customer feedback SE is leading a project in partnership with HIE and VisitScotland to encourage tourism businesses to more effectively gather and utilise customer feedback. This

7 will help individual businesses and groups of businesses in an area to understand their customers and their requirements to inform the development of their products and services. An industry working group has been set up to inform and support development of the project over the coming months. Outcomes are likely to include a set of resources to provide practical advice to businesses in this area and to highlight the businesses benefits that can be achieved. In addition there is likely also to be a series of industry workshops to support businesses to introduce systems to gather and use customer feedback and provide examples of good practice in this area. I hope this additional information is of assistance to the Committee in its Tourism Inquiry. Jack Perry Chief Executive Scottish Enterprise 16 th April 2008