Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)



  Chairman: Good morning. Thank you very much indeed for coming to see us today. This is an inquiry which we have undertaken with some urgency in view of the problems that the tourist industry is facing. We will get going right away with Mr Fearn opening the batting.

Mr Fearn

  1. Good morning. Yesterday we had a debate on the rural economy in the House of Commons and in that debate I asked the Minister when would the eight million which you are supposed to get be forthcoming and he did not know, he did not give an answer. Have you got an answer?

  (Mr Donoghue) Good morning, Chairman. Good morning, Committee Members. We put in a bid costed at £22.5 million through the DCMS to the Treasury. We project that is at least the amount required in order to undertake a serious and effective recovery campaign for Britain's inbound tourism industry this year. So far, as you know both from the media and also from the Prime Minister's Question Time yesterday afternoon, we have received £2.2 million from the Department for Culture, Media and Sport, which has been matched by £2.1 million from our own existing resources. We have made it clear to the Department for Culture, Media and Sport, who have been very eager and very willing to support our bid, that the money that we require is actually needed now. We put in a second request for £8 million of the £22.1 million that we requested to be agreed to, or released, as soon as possible in order to start the second tranche of activities, such as tactical advertising, as quickly as possible. What the £2.2 million from the Department for Culture, Media and Sport has enabled us to do is to rebut some of the inaccurate media coverage overseas of Britain's image as a tourism destination. Hopefully we will get an announcement in the next couple of days.

  2. But so far the Treasury have not said that you can have the £22.5 million, you have only got a promise of £8 million on top of the £2.2 million?
  (Mr Donoghue) There have been two things that we are pinning our hopes on. One is a couple of meetings with the Prime Minister over the course of the last couple of weeks in which he and other Ministers have said that the money that we require in order to undertake an effective and serious recovery campaign for Britain's inbound tourism industry will be forthcoming. The second is the commitment that was given yesterday afternoon in Prime Minister's Question Time which was that an announcement of further investment in Britain's tourism industry will be made in the next couple of days. We have not received any further information.

  3. It is very much in the air at the moment. What are you going to do with the £8 million? You have only mentioned advertising, tactical advertising.
  (Mr Hamblin) Tactical advertising. Perhaps I should explain that a little more clearly. When we had our world tourism leaders over last week they were able to see that for 99.9 per cent of overseas visitors who came last year, they could come again this year and do precisely the same things that they did last year. We took them into the Lake District, we took them into Dartmoor. The very strong feeling from them was that we could now become more aggressive. They have seen the number of cases of foot and mouth being reported on a daily basis reducing over the past couple of weeks. It was their strong recommendation, and indeed the recommendation of my officers overseas, that we could now begin some marketing activity. The sort of things that we would contemplate would be price driven. So there will be advertisements with a clear call to action and they will be related to price, they will be related to value. The object of that would be to kick start the tourism industry inbound once again. There are a number of countries we have identified where we believe the problem is most severe: United States, Canada, Australia as far as long haul markets are concerned; and from Europe, France, Germany, Switzerland, Belgium, the Netherlands and Ireland. Although for the Netherlands and Ireland at the present moment we would not suggest any advertising activity be undertaken, perhaps some direct mail, because the press hostility towards Britain as a tourism destination in Ireland and in the Netherlands is still quite intense.

  4. Finally, would you agree that the Government was so slow off the mark—you did a great job, the ETC did a great job as well—that you were on your own in the beginning and the Government had not realised that tourism is associated with the crisis that we have? Is that not right? I saw it that way.
  (Mr Donoghue) This is no false flattery, Chairman, but I think this Committee has been one of the few voices in the wilderness for many years which has appreciated the economic importance of tourism. I think it is fair to say that it is only because of this crisis, unfortunately, that the appreciation of tourism's economic importance has only become fully appreciated both in certain areas of Government but more broadly in the media and in the public.


  5. Thanks very much for saying that. This Committee has, throughout its existence, been pointing out that tourism is the biggest private sector industry in this country, that it probably attracts more foreign currency than any other industry in the country and it certainly provides more employment than any other industry in the country. It has been very, very sadly undervalued indeed and I think it is important just to place that on the record. I would like to think that it is a message that could get across to the media in view of the fact that while the foot and mouth outbreak is, of course, extraordinarily serious, at the same time the hysteria with which it has been depicted has done terrible damage to our tourism industry.
  (Mr Donoghue) Absolutely.

Ms Ward

  6. Do you accept that whilst foot and mouth has been a crucial factor in the problems that the tourism industry has faced, it has also been a collection of other issues in terms of transport problems, the current rate of the pound, all of those things, and to some extent the weather, that has made it more difficult for the tourism industry in this country?
  (Mr Hamblin) If we consider last year when we had many of the problems you have outlined, a very strong pound, the beginnings of the weather problems, we still managed to hold our own. We had the same number of overseas visitors in the year 2000 as we received in 1999, and indeed the amount of money they spent increased very slightly by two per cent. It is true to say that the down turn in the world economies has not helped but we factored that into our estimates of tourism income for this year and we believed that, again, there would be a small growth in income. Therefore, we believe wholeheartedly that the projections which we are now making about a reduction of anywhere between £1.5 billion and £2.5 billion in spend by incoming tourists is almost entirely down to foot and mouth disease and the perception of Britain because of foot and mouth disease in overseas marketplaces.

  7. In the past has your concentration on promotion of Britain been in the urban areas rather than the rural areas?
  (Mr Hamblin) No, it has been a mixture. It has depended very much upon the segment of the market that we have been addressing. For example, in the past we have undertaken a lot of activity in the Netherlands promoting walking holidays and cycling holidays. Clearly for this year, at least for now, that is not something we are able to do. For certain markets from Southern Europe, for example, city tourism is very, very important. It is this balanced portfolio of activity which I think has provided strength to what we do as the British Tourist Authority and our colleague tourist boards, who are sitting behind me today. London is a very big jewel in our crown, as are other cities—Edinburgh, Glasgow, Cardiff, Manchester, Newcastle for example—but the countryside too is a vitally important component of the whole.

  8. Will you be changing the strategy to reflect the greater need of the rural economy now?
  (Mr Hamblin) All of us have spent time out in the countryside talking to tourism businesses. Last week I was in Cumbria and visited Holbeck Ghyll, a beautiful country house hotel overlooking Lake Windermere. To talk to the owners of that property was really quite disturbing because their business has suffered massively. I believe that the key role of the British Tourist Authority is to look after the interests of the 125,000 small businesses that make up the tourism industry in this country and I am determined that we will get them back into profitability. The answer is yes, very much.

  9. I spent Easter in the Lake District, so I saw the issues for myself there. I understand from the information I got while I was there that 90 per cent of all tourists in the Lake District are domestic tourists. Whilst international visitors spend proportionately more than domestic, by far the largest amount is the domestic market that go there. Does that indicate that our message has been as poor within the domestic market in encouraging people to go to the Lake District and, indeed, other parts, as it has abroad, and we actually need to do more to encourage the domestic market back into those areas?
  (Mr Hamblin) My role is to promote Britain overseas. I am sure my colleagues from Cumbria Tourist Board, South West Tourism and the English Tourism Council would be able to address that question more effectively than I could. Because we are all pulling in the same direction here I think it goes without saying that it is incumbent upon all of us to ensure that prosperity returns to rural areas.
  (Mr Donoghue) It is also the case that the recovery plans that are being put together by all of the regional and national tourist boards, and ourselves, are entirely complementary and they have been drawn up in co-operation with each other. If I may come back to a point that you made about the message. I think the message from the tourist boards has been absolutely clear: go into the countryside if you can for all reasons and at all possible opportunities so long as you follow some of the guidelines which are available from Government and ourselves. If there is a message which is destructive, however, it is the message from the media because the pictures of burning pyres, which are featured almost daily on the front page of the newspapers, not only affect the decisions of people in this country to visit the countryside but, of course, those images go right the way around the world. Therefore, the rebuttal that we are engaged in is not only with our overseas media but also increasingly our domestic media too.

  10. I would say that the best message is to actually go and see for yourselves because it is nothing like the media portray it.
  (Mr Hamblin) With the group that I brought over last week, we brought the President of JALPAK from Japan and he gave me a quote before he left relating to the Lake District. He said "Before leaving Japan for this trip we were concerned that the Lake District, a popular destination for Japanese tourists, was inaccessible. The visit has clarified these misconceptions and we are very pleased to be able to take back the message that there is no barrier to visiting and exploring Cumbria."

Mrs Organ

  11. Good morning. To begin with, when we first had the outbreaks of foot and mouth I think we would all agree that the Government did not take on board the impact that this would have on tourism. I wonder if you could just give me some idea of when it began to dawn on you that this was going to be a crisis for our tourist industry as well? Was it when people reported to you that people were losing bookings, or was it that you could see for yourselves that this sort of press coverage would not help? What action did you take then to wake up Government that this was something that had to be tackled?
  (Mr Hamblin) If I take the first question and Bernard Donoghue will take the second. It first became clear to me that we had a serious problem at the very beginning of March. ITB, which is one of the world's leading tourism exhibitions, took place in Berlin then and there was clear indication and concern being expressed by tourists from throughout the world that we had a major problem. By then, however, we had put in place an immediate action group which has met daily since then, the object being to monitor feedback from overseas, to monitor the impact in the United Kingdom, to be able to glean accurate information as to what was available to be done in Britain, and we pass that out to our overseas offices on a daily basis. We update our web site twice per day so that it is absolutely up to date about everything. It was from the beginning of March. I will ask Bernard to answer the second part of the question.
  (Mr Donoghue) In terms of taking that information and passing it through to Government, we have done a number of things. Firstly, I think it is important to say that none of us in tourism, in Government, in the veterinary profession, in farming or agriculture anticipated the extent and duration of foot and mouth. Therefore, if any agencies have been perceived to be slow to respond I think it may well be that it was because none of us had an appreciation of the extent of this. That being said, we made sure that we made representations to Government very, very quickly. That was both to the UK Government but also to the devolved administrations of Scotland, Wales and Northern Ireland. In addition to that we have also ensured that a key number of parliamentarians, of course yourselves included, receive weekly briefings about what we have been doing and why, and crucially, I think, to convey an impression of what the overseas media are saying about Britain and the climate in which we are all working. Once we fully appreciated the extent of the damage to the tourism industry that foot and mouth could bring about we then put forward, as I said, a costed proposal to Government which went to the Government in mid to late March. That has already produced £2.2 million for the British Tourist Authority and, as I said at the beginning, we very eagerly look forward to the announcement, whatever announcement it will be, in the next couple of days for a second tranche. We have made it clear that the second tranche, we believe, needs to be somewhere in the region of £8 million.

  12. You said you made this recommendation mid to late March when it was becoming very clear what was going to happen over the Easter period. In a way, if Government dithers any more then giving you money at the end of May is not much good, is it, it is too late, we have lost then the Spring Bank Holiday and June and July?
  (Mr Hamblin) I think we are in grave danger unless we can move quickly, and by that I mean within the next few days, of losing the summer season. The feeling from the people who came over with us last week was the advertisements that I was talking about have got to appear in May if we are going to influence traffic in June, July and August.

  13. Talking about advertisements, did you have any input into the advertisements that went into national newspapers for the domestic market about ability to go into the countryside? The full page adverts—it was like a death notice actually—that said "you can go into the countryside" and then there were a list of things you could not do which made one feel you had to wear a plastic suit before you even went to the pub.
  (Mr Donoghue) We were party to that although the extent to which it fully reflected what we would want to say is doubtful. We certainly responded very quickly when the Prime Minister asked us to set up a web site, the web site, which we produced in a weekend and a day. We were very quick off the mark in order to do that. In hindsight it is quite a difficult message to say on the one side "go into the countryside because it is open for business, but whilst you are there you may not be able to do these things". I think trying to bring both of those messages, which are quite different, together in a very simple and clear way is difficult. Our contribution to the whole of that was to try to influence the kind of advertisement but then also with the ETC to ensure that there were call centres and web sites available for people to get a much more informed view about what was open and what was not.

  14. You have been trying to tell people from abroad that you can come to this country and you said "you can do precisely the same thing you did last year", and for about 95 per cent that is the case, but of course we do recognise that those areas that have been hit by foot and mouth are areas—Claire Ward said she visited the Lake District, my area is the Forest of Dean, the South West, Dartmoor, and the Devon countryside—where what a lot of people want to do in those areas is climb, walk, bird watch, cycle, hike, mountaineer and they cannot do that because they are in infected areas. I wonder if you could just let me know what your strategy is because I suspect that group of tourism, both inbound and from abroad, we have lost for this summer. When the restrictions are off, hopefully as soon as possible, what are your plans to bring it back in a big assault, maybe for next year?
  (Mr Hamblin) The day before Good Friday we appointed a worldwide PR agency who are now contracted and working with us initially in the ten markets most affected but subsequently in all 27 of the markets that we represent. As soon as we have information about more and more footpaths opening up, they will be put on to our web site, they will be shared with our PR agency and that PR agency will be pushing that information out into the media in those markets where we would normally welcome visitors who come, for example, for walking. The advice we received from one of our delegates from Denmark last week was "if you are into soft adventure holidays, such as walking, wait—and you may not have to wait long—but all other aspects of Britain can be enjoyed now". He very helpfully pointed out that spring in the UK—fingers crossed—comes earlier than in Denmark so it is a great time to visit. We do have an awful lot of people pulling for us. Provided that we are totally honest in the way in which we portray what can be done in Britain then I think we will continue to build confidence in our prospective visitors and in the trade overseas.

  Chairman: I am sorry, we have got to move on. We have all got to be brisk today.

Mr Fraser

  15. Just to pick up a couple of points you talked about just now. You said that you have just appointed a worldwide PR agency, what was your strategy before?
  (Mr Hamblin) We were undertaking the PR activity in-house but the sheer volume of the work we were having to do meant that we simply did not have enough people to handle the volume of activity that was being demanded of us.

  16. We are a worldwide worthwhile destination, would you not have thought it would have been even better to have a worldwide PR agency, obviously earning a great deal of money out of this, many years ago because of the type of product we are selling?
  (Mr Hamblin) I have got to make a judgement as to how to use the monies made available to me by the Department for Culture, Media and Sport. My original budget for the current financial year was £35.5 million. I am proud of the PR work that we have undertaken over the years. With the volume of activity in a normal year, the staff resource we have had has been perfectly able to deal effectively with the PR work we have wanted to do. We bring over to Britain, for example, in excess of 2,000 journalists a year who go home and write stories that if we had to buy the advertising space for would have cost us more than £20 million. My judgment has been that we have not needed that PR agency but in this emergency, quite honestly, the time which we have needed to devote to PR activity has been enormous.
  (Mr Donoghue) If I may answer that, Mr Fraser. In this Committee's previous report into tourism you very accurately pointed out that our budget for marketing, promotion and PR for the continent of the whole of the Americas is less than that of the promotional budget for the state of Virginia.

  17. So would you put a bid in this morning for future funding to better increase year on year than you have had before, regardless of situations like this?
  (Mr Donoghue) Yes.
  (Mr Hamblin) I think there are two things on this. One, the answer is yes. Two, we are not going to get through this foot and mouth situation in one year, it is going to take some time for the recovery to be complete and we would be misleading you if we suggested anything other.

  18. The VIP visitors you talked about and we saw on the news at Windsor Castle, Buckingham Palace, Downing Street and Chequers, to name but four interesting destinations, what is the follow-up you have got with those people? They have all gone home now and you hope that they are now going to produce visitors. What is the plan with those people who were brought here at vast expense to make sure that it was not just a PR coup?
  (Mr Hamblin) Each of them on their departure from Britain agreed that they will become tourism ambassadors for Britain. On Tuesday of this week I was in Zurich. We had one representative from Switzerland and he had been contemplating abandoning a charter flight from Zurich into Newquay and from Zurich into Inverness, but as a result of last week he has decided to keep those flights on and I was in Zurich on Tuesday to discuss some marketing activity which we can do jointly to ensure that those flights are successful. On the same day, the three delegates from Belgium attended a press conference held in our office which attracted Belgian media, including television, and they were able to explain through their eyes what they had seen in Britain. One of the journalists, trying to be cantankerous, said "you are a tour operator, you promote Britain, therefore it is not strange that you would say these things", to which the gentleman responded "yes, but there is a Trade Descriptions Act in Belgium also and if I try to mislead any of my customers they will surely take legal proceedings against me". We now have 40 tourism ambassadors around the world. I have given you two examples of the activity being undertaken. We are planning press conferences in Berlin, in Zurich, throughout the United States. We are going to use those people who came over for months and months to come to help reinforce the message that Britain is as safe and as great as it has been in previous years.

  19. And you are going to use well-known British personalities as well as these people from abroad?
  (Mr Hamblin) Yes, we are. We are currently in the process of trying to recruit them. They will be British personalities who have been identified within the marketplace as having the impact to make a difference. For example, in Germany we are trying to get Rosamunde Pilcher to come to the press conference in Berlin and I sincerely hope that will happen. In Switzerland there is a Swiss football player who plays for Liverpool, Stephane Henchoz, and one who plays for Celtic, Ramon Vega. They have been identified as clean-cut images of Swiss people living in Britain who will be able to get the message over effectively.

  Chairman: I am sorry, Mr Fraser, these are important issues but I have got four other people who wish to ask questions. Mr Wyatt?

  Derek Wyatt: Good morning. Chairman, I should confess that I am non-executive Chairman of Spafax. Spafax sells media to 66 airline companies in the world, so it has some sort of implication here.

  Chairman: That declaration of interest has taken up most of your question time.

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