UK tourism: from winter of discontent to glorious summer?

2001 was the worst year for the UK�s tourism industry for a decade. 2002 did not see the recovery many expected - and needed. Steve Keenan reports

In the Scottish borders, Jill Brown has scaled back her B&B operation on the Southern Upland Way to three nights a week for the winter. She is now busy with the books at Tibbie Shiels Inn but doesn�t need statistics to tell her that the walkers and tourists are still staying away.

�I lost £40,000 last year and there were days when I didn�t take £10 in 24 hours,� she says. �We needed the tourists to come back this year but it has not been as good as 2000. People have found other things to do and they�re not coming back.�

Jill managed to retain her staff and is stoical about her losses. But at least she has survived: the 2002 edition of the Good Bed and Breakfast Guide had 270 fewer entries than last year. Many small B&Bs and guesthouses closed for good.

It was a devastating year. The number of visitors to Stratford on Avon fell in 2001 to its lowest in three decades, leading to cuts in staff and opening hours at Shakespeare heritage sites. Devon lost £70m in tourism receipts in one month alone. Of course, there was some recovery in 2002 but the overall picture is still gloomy.

While the number of visitors to the UK increased year-on-year by 2% to 18.58m during the eight months to October, 2002, the year-end figure is still expected to be 5m below the 25m who visited in 2000. Visitor numbers and forward bookings in October were also lagging behind 2000 figures, by 21% and 16% respectively.

The British Incoming Tour Operators Association chief executive, Richard Tobias, admits: �It will be 2004 before we see a full recovery. It has been a lot slower than we had hoped.�

The figures are borne out by Britain�s hoteliers. Occupancy in September nudged up month-on-month from 75% to 77.9%. But the figure for the year is still down, at 72.4% (2001: 73.3%), according to TRI Hospitality Consulting. More importantly, hotel revenue per room for the year to date is also down, on average by nearly 5%, to £68.24.

The company�s regular survey of 392 hotels concluded: �On the whole, hoteliers had to admit greater volumes of discounted business. What the industry now needs is a period of stability to consolidate the recovery. Nobody would be rash enough to predict this actually happening, but conditions certainly seem set fair for 2003 to be a much stronger year than 2002.�

Stability is not a word currently associated with tourism, particularly when associated with long-haul travel. While visitor figures increased slightly in 2002, they mainly represent tourists from western Europe. In the eight months to September, the number of US visitors to the UK fell 2% over last year. The fall-off in the number of Japanese visitors was double that.

It is the loss of the long-haul, high-spending visitor that is most keenly felt by the UK Government. While tourism has always struggled to make it on to the political map, the Government understands loss of earnings.

In 2001, visitor spending dropped by 12% to £11.3bn. It is estimated that £600m was lost because of 11 September, and £900m due to foot and mouth. The worst month was October 2001, when visitor spending plunged by 28%.

The initial Government response was to grant £5m towards a �UKOK� campaign aimed at combating the negative images of foot-and-mouth. The campaign had a four-month shelf life and was targeted at the seven countries that contribute half of Britain�s tourists - the US, Canada, France, Germany, Netherlands, Belgium and Ireland.

It was followed by the �Only in Britain. Only in 2002� initiative, launched in May. The Secretary of State for Culture, Tessa Jowell, leaned on the Government to cough up £20m, with equivalent industry funding - the largest ever private/public sector partnership in tourism. If nothing else good was coming out of the sharp downturn in visitor numbers and spending, at least tourism was being pushed up the political agenda.

The Only in Britain campaign helped the number of visitors from western Europe increase in 2002. More than one million unique visitors explored the website www.onlyinbritain.com and its related country-specific gateways for special offers on visits to Britain.

But while the short-term campaigns helped stem immediate losses, the crisis also had the effect of accelerating long overdue reforms in how Britain is sold abroad. A five-month review of Britain�s tourism resources resulted in an announcement by Tessa Jowell in October that the BTA and English Tourism Council will pool resources and create a new lead body to promote inbound tourism to Britain. Unlike its counterparts in Wales and Scotland, the ETC has historically had no overseas marketing budget, concerning itself with domestic tourism.

It has not been universally well-received, with some perceiving that English interests will now dominate the agenda. �It is like putting the fox in charge of the hen house. It is a disaster for Scotland,� said Liberal Democrat MP, John Thurso. In association with the announcement, the British Tourist Authority launched a three-year strategic plan: Leading the World to Britain. Tom Wright, BTA chief executive, said: �In its new strategy, BTA has identified China, Russia, Poland and Korea as potential new markets for Britain, where we will be looking at developing market-specific websites as well as trade and PR networks.

�To boost income from tourism, we will also continue to focus on Britain�s core strengths - countryside, culture, heritage and sport - while developing a range of niche products with the industry that will appeal to the lifestyles and age profiles of Britain�s overseas visitors.�

In 2003, the BTA will also announce Britain�s �brand positioning�, promising an effective, consolidated message. Said BTA chairman, David Quarmby: �This is not about logos or straplines.�

The review, stimulated by the downturn in tourism, has effectively forced the Government and the BTA to face up to a changing world. While raising the profile of tourism, the BTA will also set about selling niche products alongside Buckingham Palace and Oxford.

It has to do this as the profile of visitors is changing. Visitors are staying less: between 1995 and 2001, the number of UK visitors staying under seven days rose by 5%; those staying eight nights or more fell by 17%.

They are more informed about what they want, thanks to the Internet, so more niche products will be promoted, rather than simply wholesale history, image and culture labels. One project, for example, will be to focus on the 12 cities that applied to be UK city of culture in 2008. More detailed, tailor made information will also be sent to visitors registered on the BTA e-mail database.

Richard Tobias at BITOA, which represents overseas-based holiday companies selling Britain, does not underestimate the challenges but is hopeful the industry will emerge stronger next year. �We have faced a serious crisis, the most serious of a generation,� he said, �but I don't have the slightest doubt that the industry has a bright future. There is a strong argument for saying that we will be fitter and leaner when we come through.�

Steve Keenan is deputy travel editor and business travel editor at The Times.