PAPER E

 

                                                                                                                Purpose : for Decision

                        REPORT TO THE EXECUTIVE

 

Date :              28 JANUARY 2004

 

Title :               NEW POLICIES FOR TOURISM

                       

REPORT OF THE PORTFOLIO HOLDER FOR TOURISM AND LEISURE

IMPLEMENTATION DATE: 9 FEBRUARY 2004

 

 


SUMMARY/PURPOSE

 

1.                  To agree revisions to the current operation of its tourism services such that Isle of Wight Tourism is no longer a membership based organisation.  This is to be achieved by terminating the existing arrangements with the Island Tourist Industry Association which will become an independent membership organisation.

 

BACKGROUND

 

2.                  Isle of Wight Tourism is the department of the Council which seeks to work in partnership with the tourist industry to develop and promote the Isle of Wight as a leading UK tourist destination.

 

3.                  The Council’s principal partner has been the Island Tourist Industry Association (ITIA), with which it has had a formal partnership arrangement since April 1999. Other partners have included the Regional Tourist Board and also in more recent times, the Isle of Wight Visitor Attractions and Accommodation Association, (VAAA).

 

4.                  The department undertakes the following principal roles which contribute to its overall operation:

 

·        Marketing, press and production

·        Sales and membership

·        Call Centre and distribution (of printed material e.g. guides)

·        Tourist Information Centres (TICs)

·        Accounts

·        Strategic Management

 

5.                  It currently operates a joint “membership” scheme with ITIA which has approximately 810 member establishments.  Part of the membership fee is effectively a subscription paid to Isle of Wight Tourism in order that the members can participate in a range of services offered by it.  The remainder of the fee is paid to ITIA to enable it to run its branch operations and operate as a “voice” for the industry.

 

6.                  The Regional Tourist Board (Tourism South East) is also a membership organisation and, as has been previously reported, has identified the Isle of Wight as an administrative sub-region for its organisation.  In so doing, it has also declared an interest in the establishment of one single membership organisation for the Island’s tourism businesses.  The VAAA has declared a wish for all of its members (around 50) to be able to access the Council’s services provided through Isle of Wight Tourism, without having to subscribe to ITIA.

 

7.                  On account of the partnership arrangements with ITIA, the services offered by Isle of Wight Tourism are generally only available to businesses that are members of it and hence also ITIA.  The benefits currently on offer to businesses are shown in Annex 1.

 

8.                  An investigation undertaken by the Ombudsman in 2003 was critical of:-

 

·        The lack of clarity/transparency in the structure of the tourism services and membership scheme of ITIA.

 

·        The ability of non-members of ITIA to have a voice when tourism issues affecting them are considered.

 

·        The ability of non members of ITIA to access Council delivered services, especially TIC’s.

 

9.                  The Ombudsman was however comforted by the fact that work was already in progress to deal with these issues.  This work having been focused on disentangling the Council’s current relationship with ITIA to ensure that it could provide its services to the whole of the industry and that ITIA could establish itself as an independent representative organisation for the tourist industry.

 

10.             The conclusion of this work has seen the identification of a number of packages of tourism services which the Council will seek to make available to all tourism (and related) businesses on the Island.  This blanket accessibility however is to be governed by any specific terms and conditions which the Council might apply to the packages in furtherance of its wider strategic aims for the Island.  The initial package proposals and principal terms and conditions for access to them are shown, for the purposes of illustration, in Annex 2.

 

11.             The packaging model is felt to be the most effective and efficient way for the Council to be able to deliver its tourism services.  However, following strong representations for the display of leaflets in Tourist Information Centres to be a stand-alone service, this has been created as an  exception to this rule.

 

12.             The price to be paid by any individual business for a package will, as at present, be dictated by the size of the business.  The categories for charging and the level of charges to be applied will be agreed by the Portfolio Holder for Tourism and Leisure.

 

13.             The negotiations with ITIA have given some consideration to the level of charges which the Council may determine for its service packages.  ITIA are particularly concerned that it is able to retain a significant membership and sufficient income to enable it to operate effectively as an independent organisation. The future viability of membership organisations such as ITIA and the VAAA is of interest to the council as it is significantly easier to work in partnership with well supported industry representative bodies than with a multitude of individual businesses.

 

14.             In order to help with the recruitment and retention of members, ITIA have requested that the Council also consider negotiating with it and any other Island tourist trade associations (such as TSE and VAAA), to deliver a limited range of benefits for businesses which belong to such an organisation.

 

15.             It is to be noted that the proposed new arrangements will need to be phased in over the next twelve months, becoming fully effective from 1 April 2005.  This is because current membership fees are collected over a rolling 12 month period.

 

STRATEGIC CONTEXT

 

16.             Tourism is estimated to be worth £312 million to the Island’s economy and to support 1 in 3 jobs (directly and indirectly).

 

17.             In March 2002 Council debated the strategic importance of tourism to the Island and recognised that tourism was the “Island’s major industry” and is the future key to prosperity.

 

18.             Developing Tourism is one of the seven themes of the Community Strategy, to be achieved through, in the main, the development of a tourism development plan.

 

19.             Tourism is encapsulated in the Council’s Corporate Plan Objective of “encouraging job creation and economic prosperity”.  This identifies that the industry has great potential to expand on the Island and that the Council seeks to work with partners to “support development of the Island as one of the UK’s leading tourist and leisure destinations”.

 

20.             The recently produced draft Island Cultural Strategy recognised the importance of the links between cultural services and tourism.  One of its six themes relates to the development of all-year round tourism and part of its overall aim is to use cultural services to “assist” in underpinning the Island’s tourism industry”.

 

CONSULTATION

 

21.             The Economic Development, Planning, Tourism and Leisure Select Committee considered the matters raised in this report at its meeting of 8 January 2004.  The meeting was also attended by 4 leading persons from the tourism industry.  The Select Committee supported the aim of achieving a single membership organisation representing all spectrums of the Island’s tourism industry.

 

22.             A dialogue with ITIA has been ongoing for over six months in which the principles set out in this report have generally been agreed.

 

23.             Correspondence has been received from the VAAA which is also supportive in general of the approach to the delivery of Council tourism services, as set out in this paper.

 

FINANCIAL/BUDGET IMPLICATIONS

 

24.             A key feature in the review of tourism services has been to ensure that there is no loss of income to the Council from the changes proposed.

 

25.             The Council currently receives approximately £120,000 p.a. from membership fees.  Of this sum, approximately £30,000 is for the direct provision of tourism services by the Council to member businesses.  The balance is allocated to the management of ITIA and also the industry’s (ITIA) “voluntary” contribution to the annual tourism marketing and promotional campaigns.

 

26.             In reality the campaign contribution is rarely voluntary as the money is collected and expended through the Council’s accounts with little reference to ITIA as to how much this might be and how it should be collected.

 

27.             As a new independent organisation, ITIA would have the ability to choose the amount it would wish to pay towards these campaigns depending on its number of members.  Alternatively the Council could seek to protect this current level of funding achieved by collecting it through its package prices.

 

LEGAL IMPLICATIONS

 

28.             Part 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 Council must have due regard to the Community Strategy in exercising this power.

 

29.             Part 1 of the Local Government Act 2000 extends the power in S144 Local Government Act 1972 which enables the local authority to, “encourage by advertisement or otherwise”, recreational visitors.  That power subsists.

 

30.             The power to charge for such services is now principally contained in S85 Local Government Act 2003.

 

OPTIONS

 

a)        The Council and ITIA terminate the existing partnership arrangements.

 

b)        The Council make its tourism services available to all Island businesses, in packages or as individual services, and subject to  charges, terms and conditions, as determined by the Portfolio Holder for Tourism and Leisure, or the Head of Tourism.

 

c)                 To vary the tourism services offered by the Council from those proposed in Annex 2.

 

 

d)        All trade associations be treated equally in any negotiations which they may wish to undertaken with the Council to seek benefit for their members.

 

e)        Not to negotiate with any trade association over provision of services to its members.

 

EVALUATION/RISK MANAGEMENT

 

31.             The criticisms made by the Ombudsman in 2003 must be responded to by the Council or else it would leave itself open to further challenge through the Ombudsman by the original complainants.  The criticisms must therefore be seen as a catalyst for the Council to not only review its existing relationships with the industry but also the role that it sees for itself in the overall management of the tourist destination that is the Isle of Wight.

 

32.             The creation of packages of tourism services available to all of the Island’s tourism (and other) businesses should effectively meet the Ombudsman’s concerns.  More especially as there would be no need for a business to be a member of any third party organisation to access these services.

 

33.              The view of Government and also the Local Government Association (LGA) is that the role of the Council is to strategically manage tourism such that the needs of the whole destination (residents, businesses and the environment) are fully considered.  Clearly the Council is not able to effectively.

 

34.             In order for the Council to act as an enabling body to help the industry realise its full potential to its and the Island’s benefit, then it still needs to have a means of having a dialogue with the industry and this should be through the existing membership organisations.  It is envisaged that this would eventually be through the single industry body as envisaged by TSE.

 

35.             It will therefore be important for the Council to ensure the continuing existence of such organisations and also to ensure that they are representative of the industry which they represent.  The January 2003 tourism baseline audit identified in the order of 3,000 tourist (and related) businesses on the Island and clearly it would be difficult and time-consuming and potentially expensive for the Council to regularly consult with each business on policy matters in relation to tourism.  Nevertheless the guiding principle in providing support to any organisation is that it should receive no more or less assistance than any other organisation.

 

36.             The Council could choose to protect the income currently derived from the existing membership scheme which is used to support the various advertising campaigns.  This may give some certainty about how the income would be generated but could also undermine the ability of ITIA to be an effective independent organisation, able to deliver real benefit to its members.

 

37.             The benefit of allowing the industry (ITIA organisation) to collect this sum is that  it could be used by it to develop its organisation and member benefits or it could

continue to contribute to the campaign programme.  The Council’s “investment” in the programme would remain unaffected and would continue to have its focus in delivering responses to its adverts (via brochure fulfilment or bookings), which is a necessary pre-requisite in the production of the brochures.  The Council would also take a lead in raising and selling the image and brand of the Island which is something that goes beyond the tourism industry.  The scale of any campaign would be reduced if the industry chose not to contribute to it in any one year.

 

 

RECOMMENDATIONS

 

38.      That options (a), (b) and (d) be adopted with effect from 1 April 2004 and that                  the Portfolio Holder for Tourism and Leisure agree the charges as part of the                  2004.05 budget preparations.

 

BACKGROUND PAPERS

 

38.      “Review of Isle of Wight Council’s current agreements and relationships with the tourist industry” – internal paper, May 2003.

 

           “Agreement between the Isle of Wight Council and ITIA to operate a joint tourism service”.   

 

            Ombudsman’s decision, May 2003.

 

 

 

Contact Point :           John Metcalfe, Head of Community Development and Tourism

                                    ( 823825     Email:  [email protected]

 

D PETTITT

Strategic Director of Education and Community Development

J FLEMING

Portfolio Holder for Tourism

 

 

 

ANNEX 1

 

 

CURRENT MEMBERSHIP SERVICES

 

 

·       Free standard line entry in suitable official publications.

 

·       Free internet page on IWT website.

 

·       Quarterly issue of Tourism News.

 

·       Discounts on credit/debit card processing fees.

 

·       Code of Conduct Certificate and Membership Stickers.

 

·       Tourist Information Centres.

 

·       Free advice on marketing, printing, PR and tourism development.

 

·       Direct Debit facilities.

 

·       Discounts on Training Courses.

 

 

BENEFITS TO ACCOMMODATION PROVIDERS

 

 

·       Participation in Tourist Information Centres and Wight Hotline Booking Services.

 

·       Tourist information Centre Booking Service (in person).

 

·       Referral Service.

 

·       Commissionable Holiday Insurance and Travellers Protection Services.

 

 

 


 

 

 


CONDITIONS

 

 

All:                                                       Must sign up to delivery of high levels of customer care.

 

 

Accommodation Providers:     Must participate in nationally recognised quality assurance schemes for the sector.

 

 

Food and Beverage                 Must participate in nationally recognized quality assurance scheme    Providers:                     for the sector.