Tourism Development Plan for Scotland Questionnaire

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1 Draft National Tourism Development Plan Public Consultation 2013 RESPONDENT INFORMATION FORM Tourism Development Plan for Scotland Questionnaire We would like your views on this Plan and, in particular, your comments on opportunities which you are aware of to help stimulate growth in the visitor economy. Please review the following questions. 1. Comments on the Plan: The British Hospitality Association (BHA) is pleased to have the opportunity of submitting its views on the draft Tourism Development Plan for Scotland (TDPS). Our detailed comments and observations on the plan are provided in the attached document. The draft plan is a comprehensive document and BHA believes that such a plan is a necessary complement to the Tourism 2020 strategy. BHA recognises that the plan will be reviewed in the light of responses to this consultation. In our submission the association has posed a number of questions in relation to aspects of the plan and has raised a number of points which it considers would benefit from discussion and clarification. This includes the extent of private sector input to the plan which will have a considerable bearing on the extent to which it influences business buy-in. BHA will be pleased to discuss or expand upon any of the points made in our submission and is willing to participate in any forum which may be set up to take the plan forward. 2. Comments on the Spatial Framework: BHA has nothing to add beyond the points raised in the attached document. 3. Comments on Development Opportunities: The hotel and related businesses which comprise the hospitality industry are: highly commercial and competitive capital intensive innovative and responsive to consumer demand and market trends. The industry has not been immune from the effects of the economic recession which have impacted on business performance (turnover, costs and profitability) for the last 4-5 years and this has had a degree of influence on levels of development and investment. In our attached submission we draw attention to the extent of development which has taken place, particularly within the hotel sector, over the last decade and during The sector is resilient and BHA expects development and investment in the industry to continue, albeit at a lesser pace than might otherwise be the case. This will occur throughout Scotland in cities, smaller towns and in rural areas and be undertaken by local, national and international investors and operators. The activity will comprise new (and innovative types of) hotels and restaurants, improvements to existing supply and acquisitions. This investment will reflect consumer expectations of quality and service and will be dependent on a return of consumer (leisure and business) confidence, market growth, ready access to affordable finance and RESPONDENT INFORMATION FORM 1

2 positive planning support. Notwithstanding this confident outlook, there are projects in Scotland which have been delayed or cancelled and many businesses have found it difficult to maintain historic levels of capital expenditure to improve their product. The hospitality sector is undergoing a period of adjustment represented in some instances by reduced property values, re-financing, disposal /acquisition of assets (not all of which represent distress), changing attitudes to the availability of finance from the banks and financial community and the emergence of investors, some new to the industry, who see attractive opportunities. BHA has refrained from commenting on individual development opportunities within our sector, not least for reasons of commercial confidentiality. The Association believes that there are local business organisations which are better equipped to comment with authority on development opportunities in other tourism sectors and at local authority level. VisitScotland Tourism Development Plan for Scotland Submission from the British Hospitality Association, Scotland Background The British Hospitality Association, Scotland (BHA) is pleased to have the opportunity to submit this response to VisitScotland on the draft Tourism Development Plan for Scotland (TDPS) which was issued for consultation in In making this response, BHA will focus on matters which are specific to, or have a bearing on, the hospitality sector. BHA considers that there are other organisations which are better equipped to respond on matters which have bearing at local authority level or which are relevant to other sectors of the wider tourism industry. BHA represents hospitality and tourism-related businesses throughout Scotland. In October 2011 the Association published a report entitled Hospitality: Driving Scotland s Local Economies. This report, prepared for BHA by Oxford Economics demonstrated the importance of the hospitality industry to Scotland and, for the first time, to each local authority in the country. Headline findings from the research show that, at national level, the industry: Directly employs 220,000 people and a further 120,000 indirectly (in total almost 9% 0f Scotland s jobs) Generates annual turnover amounting to almost 8bn Contributes 4bn to the economy of the country by way of Gross Value Added Has strong links to, and supports, other sectors of the economy transport; agriculture, food and drink; energy; construction and related trades, professional services including banking and finance Has the potential to create a further 43,000 jobs in Scotland if the right conditions (see below*) for growth are in place. RESPONDENT INFORMATION FORM 2

3 The report identified that over the previous decade there had been over 100 new hotels built in Scotland with total investment amounting to over 3bn. In 2012, fifteen new hotels were built in Scotland. Recent investment has taken place during a period of severe economic stress which has had its impact on leisure and business customer spending, hotel turnover and profitability. Recent analysis by one of the leading chartered surveyors active in the hospitality sector indicates that, while there continues to be a pipeline of new hotel room development in Scotland amounting to c3% of room-stock (estimated at c63,000 rooms), there are speculative projects and firm development proposals, amounting to a further 27% of current room-stock, which have been put on hold pending a more favourable investment and development climate. BHA identified a number of barriers to growth* in its 2011 report. While a number of these require action at UK / Westminster level, they are relevant to Scotland. These include: fiscal policies (the high rate of VAT applied to hospitality services, Air Passenger Duty), continued Scottish Government support for VisitScotland; easing of the UK visa and immigration regime; reduced bureaucracy and regulation on the industry and other factors including investment in high speed broadband and mobile signal. These, and other matters including: the availability of a skilled and capable workforce; a supportive planning environment and access to affordable finance have a bearing on the eventual success of a Tourism Development Plan for Scotland. In reaching investment decisions due account must also be taken of supply and demand, the potential for sustained market growth and the potential for long-term financially viable operations. BHA has argued for the hotel industry to be included within the Enterprise Investment Scheme (EIS) which provides tax breaks for those investing in qualifying projects; there may also be a case for the re-introduction of capital allowances on hotel buildings. General observations Given the caveats set out at paragraphs 1.36 and 1.38, should TDPS be called a framework rather than a plan? The document sets out in the annexes a significant list of opportunities which require development and investment if Scottish tourism is to grow as envisaged in the Strategy for Leadership and Growth Tourism Scotland 2020 (T2020); yet the plan does not set development objectives or national priorities for these and gives little indication of who will be responsible for implementation, monitoring progress, reviewing direction of travel; BHA endorses the use of the customer journey as the basis for the plan. However, we believe that there is a case also to embrace factors which influence the potential visitor during the planning stages of a trip and the need for investment in these; The plan reads rather like a document which has been prepared by, and for, the public sector, notwithstanding that there has been some private sector involvement thus far. There is little real recognition of the role of the private sector in delivering much (although not all) of the investment required (BHA acknowledges that this is acknowledged at various points in the plan, for example at paragraphs 2.9, 2.36 and 3.19). There is much in the plan which will be of value to the private sector investor / developer / operator. However, these individuals and organisations are opportunitydriven and are influenced by prevailing market conditions, project viability and returns on investment rather than the content of a national plan ; Where the plan may be of particular benefit is in bolstering private sector confidence that Scottish tourism has Government support, represents a worthwhile investment RESPONDENT INFORMATION FORM 3

4 opportunity and in identifying the need for and, hopefully commitment to, public sector investment (for example in infrastructure and public real works) which will underpin tourism and help stimulate private development ; Although there are informative annexes and information may be available from other sources, the plan does not (and may not be intended to) provide convincing analysis about the current supply of tourism products and services, the fit between these and market requirements and gaps both qualitative and quantitative - in supply; How does TDPS fit with and influence the current preparation of National Planning Framework 2 as this affects tourism? Observations on the Preface to the plan BHA welcomes the Scottish Government s confirmation of VS as the lead economic development agency driving growth in the visitor economy. Does this infer that VS will coordinate the activities of all relevant public agencies in: o Supporting the delivery of T2020? o Managing the progress of TDPS? The plan states that once complete, it will define the development strategy for Scotland s visitor economy as well as identifying a range of opportunities to be considered by Councils in their emergent development plans and that it will inform and develop a series of Action Plans for investment by each local authority. This seems ambitious. How will this be delivered in a coordinated manner especially in the light of reduced, and reducing, local authority budgets? BHA recognises that the plan is not intended to address wider factors which support investment. It is, however, critical that tourism development in Scotland is underpinned by parallel investment in training and skills development, access to finance, a supportive planning regime and up to date market intelligence and research information. Section 1 Introduction (References are to paragraph numbers used in the report) 1.7 This states that the aim of the plan is to provide the spatial strategy to help deliver T2020 as well as secure and prioritise further investment in infrastructure and facilities to support ongoing growth. How will public sector action to achieve this aim be coordinated? Will all relevant public bodies subscribe to the plan and allocate appropriate resources? This is particularly relevant given the comments made at paragraphs 1.36 and This reinforces the need for much improved data on local tourism supply, demand and performance Other than an early meeting attended by BHA and STA, what has been the contribution by industry to the draft plan? BHA is willing to participate in further discussion BHA endorses the focus of the plan on the customer journey - it is vital that future tourism development is consumer/market driven. The customer journey should be extended to ensure that any investment needs in respect of trip planning and pre-arrival requirements are taken into account. Diagram 2 - This is probably not intended to be comprehensive, but it appears that a number of critical stakeholders have been excluded for example: Marine Scotland, Scottish Canals, Crown Estates, heritage-related bodies and, possibly given their increasing importance as a source of discretionary funding to qualifying projects which can have a bearing on tourism, the Lottery bodies for arts, sport and heritage. The diagram possibly also underplays the RESPONDENT INFORMATION FORM 4

5 importance of local authorities (beyond their planning function) and the critical role of businesses in investment and development This would be assisted by clarification of the difference between Area Tourism Partnerships (ATP s) and Destination Organisations and their role in development / 1.34 Although described in the annexes, it might be helpful to include a diagram which illustrates the relationship between strategic and local development plans, NPF and Scottish Planning Policy. Through what process can TDPS influence statutory development plans and be a material consideration in determining planning applications? 1.36 Is the planning framework capable of securing future private investment as suggested or should it simply be sufficiently flexible to enable to support and provide timely responses to private sector development and investment proposals? 1.36 / 1.38 See observation at paragraph 1.7 Section 2 - Development Strategy 2.3 Importance also of ongoing investment in, and maintenance of, public realm in creating sense of place and destination quality thereby contributing to the visitor experience and stimulating / supporting private sector development and investment. 2.5 The requirement for investment in broadband and mobile capacity is critical, given the increasing dependence on this by consumers and businesses. This factor is highlighted in recent VS research as a source of dissatisfaction among visitors (VS Visitor Surveys 2011 & 2012) This reaffirms the strong impression that the plan, as drafted thus far, is heavily influenced by public sector views and priorities How can the plan be focussed on delivering the necessary outcomes given our previous comments and the caveats made at paragraphs 1.36 and 1.38? 2.13 To what extent do the opportunities, proposals and priorities reflect viable prospects recognised by private sector investors and banks as distinct from being perceived as simply worthy things to aspire to? Table 1 Spatial Framework 1i What about airports other than Glasgow and Edinburgh and the importance of, for example, HIAL airports to internal air services? Airlines should be acknowledged as participating partners. Is there scope for robust route development support? Related to this is the importance of internal rail services (quality of experience, direct routes, on-board information, luggage space). 1iii BHA agrees with the identified routes, but wonders whether attention should also be given to others such as A1, A68, A7? 1iv This appears to ignore important ferry ports such as Ullapool and others serving the Inner and Outer Hebrides. Ferry operators should be acknowledged as participating partners. Progress with integrated multi-modal ticketing needs to be matched with integrated timetabling as well as convenient and customer-friendly inter-modal connections (eg air-rail, rail-coach, coach-ferry) 2i iii What is the market rationale for investment in 4/5 star hotels and new (presumably additional) accommodation and resorts in the identified locations? 3iii Is the Marine Scotland tourism development strategy published? (unable readily to source this on Scottish Government website). Plan 1 see comments above under 1i and 1iv Achievement of a sustainable car & passenger ferry connection to mainland Europe would greatly improve access to Scotland and assist the development of Scottish tourism. BHA recognises the difficulty in achieving this given the experience over a decade or more of Superfast and Norfolk Line. RESPONDENT INFORMATION FORM 5

6 2.38 Although there are a significant number of hotel developments underway / proposed / in the planning pipeline, recent economic circumstances, hotel performance and bank attitudes have resulted in a number of these being (at least) delayed until conditions improve There is a need to recognise the critical influence of project viability, supportive planning policies and access to adequate and affordable finance in securing private sector investment in quality accommodation in rural areas and small towns Priorities a) and b) Refer to previous observations in respect of market rationale, supply:demand, gaps in supply, viability. Agree with priority d) concerning visitors with disabilities Refer to previous observations in relation to market rationale, viability etc in relation to promotion by public agencies and local authorities of development opportunities for new accommodation. Due account must be taken of potential for displacement of demand attributable to public sector intervention and the resultant impact on existing businesses Priority c) It should be noted that a number of industry bodies have expressed interest in learning more about the rationale for SDI s (and that of certain local authorities)involvement in hotel and resort inward investment at the current time Leading UK airlines and Scottish airports have recently published reports which illustrate the negative impacts of APD on air travel and tourism. BHA supports the campaign to have the rate of APD controlled / reduced BHA agrees with the requirement for investment in conference, event and exhibition facilities of scale (such as the Lennox Suite at the EICC) which meet gaps in current supply and satisfy consumer need. This type of development may require, at least, public sector pump-priming finance or the utilisation of imaginative funding schemes which will attract private investment.. Previous comments apply in relation to the market rationale for accommodation investment and onwards. BHA recognises that what visitors see and do (the reasons to visit a destination) is critical in distinguishing Scotland in a crowded international marketplace and in attracting visitors to the country. BHA would make the following general comments, recognising that others may be better qualified to comment on this aspect of the customer journey and investment plan: The importance of high quality public realm and the important contribution this makes to the customer experience. Concern over the sustainability and viability of (at least some) visitor attractions given o Recent economic circumstances and the effect of this on consumer spending; o The constraints on the ability of some attractions to re-invest in their product; o The displacement effect on demand (and their future sustainability) for existing attractions of some recent, and future planned, public sector investment in high profile attractions (in saying this, BHA recognises that high profile and high quality attractions are important in attracting visitors to Scotland. However, there needs to be regard for potentially negative, and possibly unforeseen, impacts on existing facilities). The effect of reductions in the budgets of public agencies on investment in the country s built and natural heritage and cultural infrastructure. This situation also has an effect on the availability of grant support to other bodies, often in the third sector, which invest in and manage much of our heritage The plan would benefit from explanation of what represents Scotland s niche markets It is important that priority areas a) i) are substantiated by market rationale and the prospect of viability. BHA believes this to be especially the case in relation to priority c) and RESPONDENT INFORMATION FORM 6

7 facilities which require investment from the private sector. In relation to priority h) - investment in public realm should not be restricted to the locations cited in the plan BHA supports the importance of Scotland s produce of all types (of which the hospitality sector is a massive consumer) which helps distinguish Scotland and its tourism businesses in the international marketplace. Section 3 Making it happen It is important the TDPS is seen as a realistic and achievable plan and not simply a list of worthy actions against which there is no commitment or allocated resource to deliver. The private sector will welcome: o Authoritative evidence of tourism performance, market trends and demand and (preferably quantified) gaps in supply. However, the private sector will also identify for itself opportunities for development and investment based on corporate strategy, competitive positioning and other factors, some of which will be commercially confidential, which cannot be addressed in a national plan such as this. o Evidence of market failure which justifies public sector intervention in private sector investment and development and the avoidance of interventions which simply displace demand for, and place in question the viability of, existing businesses. o A supportive planning environment at local development, strategic and national framework level. o Agreement for integrated action to finalise this plan, implement it and monitor progress. BHA is willing to play whatever part it can, resources permitting, in making this happen. BHA would urge caution over undue focus on, and public sector intervention in, recognised tourism hotspots if this occurs at the expense of other parts of the country which have tourism development potential. Finally, BHA would draw attention to the calls to action set out in its 2011 report Hospitality: Driving Scotland s Local Economies (which has been used as a source in the preparation of the plan). The identified actions will assist with the creation of the right environment in which the private sector can grow, develop, invest and employ people. BHA recognises that a number of its suggested actions are for UK bodies and are not the responsibility of the Scottish Government or its agencies. RESPONDENT INFORMATION FORM 7

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