PAPER D
Purpose
: for Decision
REPORT
TO THE EXECUTIVE
JOINT REPORT OF THE PORTFOLIO HOLDER FOR
RESOURCES AND TOURSIM AND LESIURE
IMPLEMENTATION
DATE : 6 May 2003
1. Isle
of Wight Tourism (IWT) is seeking to purchase an electronic Destination
Management System (DMS) to give it a competitive advantage in attracting
visitors to the Island. Members are
asked to support its purchase and the identified funding that makes it
possible.
2. None
3. Isle of Wight Tourism (IWT) is a
marketing led organisation with a strong service provision mandate. It exists to promote and develop tourism on
the Island and also to provide current and accurate information to the visiting
public.
4. Isle of Wight Tourism currently operates a “call centre” for
the purposes of handling visitor and potential visitor enquiries about the
Island and for organizing the distribution of the marketing and promotional
brochures it produces in this respect.
Importantly the system also captures data about the person making the
enquiry to help inform future marketing strategies and promotions. The centre also provides an accommodation
and ferry booking service.
5. Effective destination management relies on the use of
accurate and timely research and quality initiatives to inform decisions which
aim to:-
·
Welcome,
involve and satisfy visitors
·
Achieve a
profitable and prosperous industry
·
Engage and
benefit host communities
·
Protect and
enhance the local environment
6. The current electronic data system used by IWT is over 15 years old and being DOS based, is particularly slow when dealing with the customer. It is also impossible to develop and improve the system to cope with the ever increasing demands of the market place.
7. Isle of Wight Tourism has therefore been attempting to
procure a new electronic “Destination Management System (DMS)” to enable it to
receive better and more timely information to ensure that strategies can be
prepared which keep the Island as a premier visitor destination in Britain.
8. If IWT is to effectively manage the Isle of Wight as a destination then it needs to procure an electronic DMS that is capable of delivering:-
· On-line booking in real time
· Accommodation availability updating
· Extensive and precise target marketing initiatives based on up to the minute data capture and analysis
· Effective brochure fulfilment
· Stock control
· Membership database
9. These two tasks complete the Members and Officers of the Project Board, established in accordance with the Council’s agreed protocol on ICT projects, met on 28 March 2003 and agreed to recommend the procurement of the system to the Executive.
10. The purchase of a DMS is essential if the Island is to be a part of the England net project being led by the English Tourism Council. This aims to provide a framework for tourism destinations to be more successful by enabling the customer to get easier access to better information enabling more informed choices about taking holidays and short breaks in England. The information currently held by IWT could in no way support this agenda, nor are the systems used able to link to those in use by England net.
11. The purchase of a DMS has the strong backing of the Executive of the Island Tourist Industry Association (ITIA).
12. Tourism development is central to the
delivery of the Council’s Corporate Objective to, “encourage job creation and
economic prosperity”.
13. In March 2002 the Full Council debated
the strategic importance of tourism to the Island and recognised that tourism
was the “Island’s major industry” and was “the key to future prosperity”.
14. The development of tourism is one of the
seven themes of the community strategy.
This is largely to be achieved through the production of a tourism development
plan for the Island.
15. Nationally the merger of the British Tourist Authority (BTA) and English -Tourism Council (ETC) has created a new organisation – Visit Britain but with a specific remit to market England’s destinations within Britain. This will largely be achieved through the England net project – the linking of electronic DMS throughout the country.
16. The procurement of an electronic DMS system for tourism is used as an example in potential service based e-government projects in the Council’s “Implementing Electronic Government Strategy” (2001).
17. The effectiveness of a tourism development plan will be limited without up to date and timely information on visitors/potential visitors to the Island and without the ability to engage in a more responsive way with them once they are here. If successful, the tourism development plan will help to maintain the importance of tourism to the Island’s economy and indeed improve the economic impact of it. An e-based DMS will support this approach, will open up new markets through England net and will contribute to the e-government agenda.
18. Consultation has taken place with the
following:
·
DMS Project Board consisting of:
John
Pulsford, Executive
David
Price, Senior Supplier
John
Metcalfe, Senior User (Service)
Cllr.
P. Jarman, Senior User (Members)
Cllr R.
Barry, Senior User (Members)
David
Groocock, Senior User (Industry)
·
IWT Management and relevant Department Officers,
front-line staff.
·
Island Tourist Industry Association (ITIA)
·
ICT Department Head, Networks and Software Development
Managers, relevant Department Officers
19. The total cost of the DMS over the first 5 years of its installation is £734,097. IWT has the ability to fund in the revenue costs of the system from year 2 onwards from within its existing cash limited budget. This is because:-
· It is replacing an outdated system that already attracts significant revenue expenditure.
· The DMS will be at the heart of all that IWT does in respect of marketing, product development and accommodation booking. Inevitably the organisation will have to change to reflect this.
20. The major barrier to the procurement of the system is in resourcing the costs of the first year which includes the initial capital costs. The total costs in year one are estimated to be £277,116.
21. Of the year are costs totalling some £84,821 which are to be funded from grant allocations, (SEEDA and Regional Tourist Board) and revenue budgets from IWT and also the Council’s ICT department. This leaves a balance of £192,295 to be funded. Two sources of funding have been identified by the Project Board for this sum but they require the approval of the Executive to be applied.
·
£120,000 to be drawn from the Council’s strategic ICT
e-government fund. This has the support
of the Head of ICT.
·
£72,295 to be drawn from carrying forward the balance
of IWT “underspent” budget in 2002/03.
Such underspend having been achieved through one-off savings on staff
salaries and also an over-achievement of income in a number of areas.
22. A summary of the project costs and
proposed funding is attached as Appendix 1 to this report.
23. Section 1 of the Local Government Act 2000
provides the Council with the power to do anything which it considers likely to
promote the economic, social and/or environmental well-being of its area. The authority must give due regard to the
details of the Community Strategy in choosing to exercise this power.
1. To support the procurement of the
electronic DMS for Isle of Wight Tourism.
2. To
support the use of £120,000 from the strategic e-government fund towards the
purchase of the system.
3. To
support the use of the balance of IWT 2002/03 budget to fund the purchase of
the system.
4. Not
to support the procurement of the DMS.
24. Without the purchase of an electronic DMS it will become
increasingly difficult for the Island to maintain its position as a major
tourist destination in England. This will have serious wider implications for
the economy overall.
25. The current IT systems at IWT are not capable of being
upgraded/updated to meet the more exacting needs of IWT in being able to
effectively place the Island as a key visitor destination in the minds of the
traveling public.
26. The nature and role of IWT
must change to embrace all aspects associated with destination management
including the development of specific products and the increased use of web
based marketing. The delivery of an
electronic DMS will be the catalyst for change within IWT. It is a perceived but manageable risk that
the organisation is not able to change quickly enough to be able to take the
benefits of the system for the whole of the Island’s tourist industry.
RECOMMENDATIONS 27.
Options 1,2 and 3 be adopted. |
BACKGROUND PAPERS
28. This
report has been based on facts contained in Destination Management System
Business Case, dated 28 March 2003.
Contact
Point : Barbara Milton, DMS
Project Manger.
Telephone: 823628
Email: [email protected]
John
Metcalfe, Head of Community Development & Tourism
Telephone:
823825
Email: [email protected]
|
D
PETTIITT Strategic
Director Education
and Community Development |
R R
BARRY Portfolio
Holder for Resources M A
JARMAN Portfolio
Holder for Tourism and Leisure |
Appendix 1 – Summary: Project Costs & Proposed Funding
|
Project Funding |
2003/04 |
2004/05 |
2005/06 |
2006/07 |
2007/08 |
Total |
|
Total Systems Costs |
277,116 |
113,721 |
105,354 |
119,747 |
118,155 |
734,093 |
|
Identified Funding Sources: |
|
|
|
|
|
|
|
SEEDA Funding |
30,000 |
0 |
0 |
0 |
0 |
30,000 |
|
STB Funding |
7,000 |
0 |
0 |
0 |
0 |
7,000 |
|
ICT PC Replacement Match Funding |
5,000 |
0 |
0 |
0 |
0 |
5,000 |
|
IWT Contribution from Overheads |
37,821 |
16,297 |
11,430 |
11,823 |
12,231 |
89,602 |
|
IWT Direct Overhead Savings |
0 |
30,450 |
30,450 |
30,450 |
30,450 |
121,800 |
|
IWT Image Campaign Budget |
0 |
25,000 |
25,000 |
25,000 |
20,000 |
95,000 |
|
IWT Website Budget |
0 |
5,000 |
5,000 |
5,000 |
5,000 |
20,000 |
|
IWT On-line booking commissions |
0 |
7,375 |
14,751 |
25,815 |
36,879 |
84,820 |
|
IWT IT Budget |
5,000 |
8,000 |
8,000 |
10,000 |
10,000 |
41,000 |
|
IWT existing budgets to be identified |
|
21,599 |
10,723 |
11,659 |
3,595 |
47,576 |
|
Total
Funding Identified |
84,821 |
113,721 |
105,354 |
119,747 |
118,155 |
541,798 |
|
Funding Required |
192,295 |
|
|
|
|
192,295 |
|
Requested Funding of Balance |
|
|
|
|
|
|
|
Strategic ICT e-government fund |
120,000 |
|
|
|
|
120,000 |
|
Funding from IWT carry forward |
72,295 |
|
|
|
|
72,295 |
|
Total Requested Funding |
192,295 |
|
|
|
|
192,295 |
The % breakdown by funding source of
the proposed funding option is as follows:-
Funding Source |
|
% of Project Cost |
|
IWT Existing Overheads |
(12.2%) |
|
|
IWT Direct Cost Savings |
(16.6%) |
|
|
IWT Existing Budgets |
(49.2%) |
|
|
Total IWT Contribution |
|
78.0% |
|
ICT Budget |
|
.7% |
|
Strategic E-government Fund |
|
16.3% |
|
Outside Grant Funding |
|
5% |
|
TOTAL |
|
100% |