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April 5, 2008

BUSINESS TOURISM: Could it gain from VisitBritain job cuts?

The news that VisitBritain, the agency that promotes the UK to overseas consumers and businesses, is aiming to cut more than 50 jobs globally has been received with concern across the events and tourism industries. However, the resulting restructuring may direct more resources towards business tourism.

A recent statement from VisitBritain said a consultation period had begun, and that “while there will be some job losses – estimated at around 55 people globally – the organisation has called for voluntary redundancies and will be creating around 10 new jobs” as part of a “reshaping” programme.

Impact on 2012
Of the 55 planned job cuts, 30 will be lost in the UK and 25 overseas. In an attempt to stave off fears over a lack of resources, VisitBritain stated that most jobs would go from its Publishing Department, which had experienced an 82% reduction in its core print needs since 2004 due to the agency’s growing web-based strategy.

This, however, did little to allay the concerns of Tony Millns, chairman of the Tourism Alliance, who fears the cuts will impact on the Olympics. "This is a critical time for the industry with planning underway to maximise the tourism benefits to be derived from staging the 2012 Games,” he said. “If we are to achieve the £2 billion target that the Government has set for additional tourism revenue to be gained from hosting the Olympics, we need to be increasing VisitBritain's resources, not forcing them to make almost 20% of their staff redundant.”

Struggling to compete

Izania Downie, executive director of events industry association Eventia, was also clearly disappointed by the news. “VisitBritain's funding and resources are proportionally much lower than many other overseas destinations,” she said. “Britain is struggling in a hugely competitive marketplace, so the Government should be investing more not less into tourism.

“In 1980,” she continued, “Britain received 6.5% of all world tourism receipts, by 2005 that had slipped down to 3.8%. We are being overshadowed by the wealth of destinations all competing to attract world visitors. Over the past 10 years VisitBritain’s funding for the inernational marketing of Britian has fallen in real terms by 22%. Aruba – a small island in the Caribbean –– will spend more marketing itself in the US during 2007 than Britain will.”

Better for business?
Although saying that a reduction in VisitBritain’s overall resources was of concern, “as it remains the most effective organisation to boost Britain's inbound volumes”, Michael Hirst, chairman of the Business Tourism Partnership, actually welcomed plans to restructure the organisation.

“It seems that the Business Visits and Events Department is unlikely to be affected by the restructuring,” he said. “Indeed, my understanding is that the likely outcome might mean additional resource to take into account a growing focus on events to generate more visits.”

The British Association of Conference Destination’s chairman Tony Rogers confirmed that this, indeed, may be the case.

“I’m led to believe that, following the current review and re-structuring, the Department’s allocation might improve,” he said, although he added: “But I’ll only believe it when I actually see it!”

An £86 billion sector
According to Hirst, an increase in funding for business tourism is no more than it deserves. “In an ideal world we would like to see a disproportionate increase in VisitBritain’s funding for business tourism,” he said. “It is 26% of total tourism receipts, but VisitBritain only currently spends less than 5% of its budget on the sector. So even before these cuts the industry was calling for more resource. I suppose it will be argued that if the total budget is being reduced and business tourism is getting a little more then our proportion is rising. Business tourism is likely to be the main beneficiary of the Olympics and, therefore, any allocation of funds by VisitBritain to developing their Olympic Strategy must take into account the promotional needs of business tourism, too.”

Hirst also called on the Government to wake up to the revenue potential of business tourism. “It should realise the importance of an £86 billion sector and resource it better,” he said. “Recognise how much Scotland, Wales and Northern Ireland value the industry and do the same for England. Provide a dedicated Minister of State to promote the sector across Whitehall and reallocate the funds of DCMS much more favourably to the sector.”

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