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.