1. Challenges and Opportunities for Tourism in the South West
8th November 2017

2. Tourism in the South West (visitor economy)
It is the top UK region for domestic tourism trips, nights and spend (The Great Britain Tourism Survey).
Based on 2014 data, the Southwest accounts for approximately 10% of day visit expenditure, 18% of domestic tourism expenditure, and 5% of inbound tourism expenditure (Tourism Alliance, 2017).
Tourism ratio: This statistic is the result of dividing the total demand
within an area (or visitor expenditure) by the total supply (or output of all industries) in each region.
Source: ONS, 2016

3. Two levels of complexity and uncertainty
Forecasting tourism demand
The number of factors influencing tourism demand is large and their interaction complex:
Hotel rates
Air fares
Real GDP of source country
Government grants for promotion
Relative price of destinations
Income in source country
Promotional expenditure
Per Capita GDP
Etc…
BREXIT Negotiations
Still struggling over
‘divorce bill’
Northern Ireland Border
Rights of EU migrants

4. GBP vs Euro
DEMAND
23rd June 2016
Source: XE Currency Converter

5. Inbound Tourism: So far, so good
Source: Office for National Statistics, International Passenger Survey Time Series Data Set
Inbound Tourism: So far, so good
Overseas residents made four million visits to the UK in July 2017; this has increased by 6% when compared with July 2016 .
Domestic tourism paints a more complicated picture: year-to-date figures from GBTS (to July 2017) indicate number of trips down 1.7%, but expenditure up 4.4% (data for England)

6. Mobility
Much will depend on whether physical barriers to travel (border controls, visa requirements) will worsen
Mental barriers: image of UK as a welcoming destination
Perceptions have real implications
A KPMG (2017) report suggested the top reason for EU citizens surveyed in their home countries why people might not want to come to the UK (to work) is because BREXIT makes them think the British don’t welcome foreigners (33%).

7. Mobility
The UNWTO estimates international travel to increase 58% by with almost half of that growth coming from BRIC countries (Tourism Alliance, 2017).
since biometric visas were introduced in 2008, the UK’s share of outbound tourism from China, Russia and India has decreased by 30%

8. Labour shortages?
SUPPLY
Estimates of the proportion of EU migrants employed in hospitality range from 12% to 24%. It is the sector with the largest proportion of EU workers.
A KPMG BHA analysis of Labour Force Survey data indicates 6.4% of hospitality employees in the South West are EU nationals although the report suggests this is probably an underestimation.
The hospitality sector currently needs around 62,000 new EU migrants per annum to maintain its current activities and to grow (KPMG BHA report)
The question is not just whether EU nationals will be allowed to stay, but whether they will want to stay.

9. SUPPLY
Deregulation
“The enhanced ability of the UK to control the regulations applicable to UK tourism businesses and consumers could be a valuable outcome of the UK leaving the EU and help improve the competitiveness of the domestic tourism industry” (Tourism Alliance, 2017).
Even now the UK does not make the most of a special dispensation re VAT on tourism products available within the EU legal framework.

10. Indirect implications
SUPPLY
Indirect implications
€2.6billion in CAP funding currently directly supports rural services, SMEs, tourism, and cultural and heritage activities, alongside €25billion that funds farmers and environmental schemes which make it attractive for visitors (CBI, 2016)
The 365m trips made to rural destinations each year generate £18.6bn for the rural economy which, in turn, provides over 340,000 fulltime jobs (Tourism Alliance, 2017)
Frequently it is not tourism regulation per se that
has the biggest impact
on tourism…

11. Challenges aplenty, but also opportunities aplenty:
The South West has a unique tourism product that should (and does) form the basis of its tourism offer:
Local identity/distinctiveness
Quality (more demanding tourists), including valuing employees
Innovate (demand is increasingly fragmented)