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Tourism and Local Rural Communities Defra

13 August 2010

Tourism and Local Rural Communities Defra

A report submitted by GHK

Date: 12 August 2010

Job Number 7683

Philip Craig GHK 2nd Floor, Clerkenwell House 67 Clerkenwell Road London EC1R 5BL T +44 (0)20 7611 1100 F +44 (0)20 3368 6960 www.ghkint.com

Tourism and Local Rural Communities

Document control

Document Title Tourism and Local Rural Communities

Job number 7683

Prepared by Philip Craig and Rebecca Murray

Checked by Charlotte Slater

Date 13 August 2010

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Contents

1 Introduction ......................................................................................................... 1 1.1 Research Aims and Objectives ................................................................................................ 1 1.2 Methodology ............................................................................................................................. 1 1.3 Structure ................................................................................................................................... 2

2 Economic Impacts ............................................................................................. 3 2.1 What is Rural Tourism? ............................................................................................................ 3 2.2 The Characteristics of Rural Economies .................................................................................. 5 2.3 The Economics of Tourism ...................................................................................................... 7 2.4 Summary ................................................................................................................................ 18

3 Characteristics of Rural Tourism ...................................................................... 19 3.1 The Visitor Profile ................................................................................................................... 19 3.2 Visitor Perception and Motivations ......................................................................................... 22 3.3 Summary ................................................................................................................................ 23

4 The Rural Tourism Industry ............................................................................. 24 4.1 The Tourism Industry ............................................................................................................. 24 4.2 Motivation of Rural Tourism Providers ................................................................................... 26 4.3 Generation and Retention of Income ..................................................................................... 28 4.4 Diversification of the Rural Economy ..................................................................................... 31 4.5 Trends Effecting Rural Tourism ............................................................................................. 33 4.6 The Benefits of Rural Tourism ............................................................................................... 34 4.7 Challenges Facing Local Areas ............................................................................................. 37 4.8 Leveraging Benefits and Managing Trade-Offs ..................................................................... 40 4.9 Summary ................................................................................................................................ 42

5 Conclusions and Recommendations .............................................................. 43 5.1 Factors Influencing Impact ..................................................................................................... 43 5.2 National Level Summary ........................................................................................................ 44 5.3 Regional Level Summary ....................................................................................................... 45 5.4 Recommendations ................................................................................................................. 45

Annex 1 List of Stakeholder Consultees ............................................................. 49

Annex 2 Availability of Data to Measure Impact ................................................. 50

Annex 3 Measurement of Local Economic Impact ............................................. 54

Annex 4 References ............................................................................................. 61


1 Introduction

In February 2010, the Department for Environment, Food and Rural Affairs (Defra) commissioned GHK Consulting to review and extend the evidence base for how tourism impacts upon local rural economies in England. While significant sources of information are available, this study was expected to look beyond the presentation of data and provide analysis and intelligence that will help inform the understanding of Defra and bodies with policy and planning interests. The study brief highlights the need to understand: How local rural tourism ‘economies’ evolve on the ground, how they impact on local prosperity and life and how different types of tourism investment and infrastructure may provide differing drivers for a ‘visitor economy. The study is expected to contribute towards Defra’s Departmental support of sustainable economic growth in rural areas. This is a high level, broad aim for which the whole of the Government shares delivery responsibility. Apart from the more obvious interests around land based industries, Defra has direct responsibility for very few of the levers that affect the economic fabric of rural areas. We therefore hope that this report will be of interest to other parts of Government and agencies and will influence their policies and delivery mechanisms to ensure that the rural context is taken fully into account.

1.1 Research Aims and Objectives The primary objectives of this study are to understand: ▪ the overall contribution of rural tourism-related activities to rural localities; ▪ why tourism related economic activities evolve within rural localities and

the drivers for lower/higher value added through tourism; ▪ how types of tourism-related activities may provide differing drivers and/or

contribute a ripple effect to the local economy; ▪ the range of jobs which can be supported by tourism; and ▪ how tourism impacts on local prosperity and life in other ways, positive or

negative. We hope that the results of this study will provide an evidence base, so that the benefits to rural communities of tourism can be better understood, highlighting where the evidence base is weak and where further primary and secondary research is required.

1.2 Methodology In order to draw out the maximum amount of relevant information, this review took a three tier methodology: ▪ Initial scoping, data collection and analysis, involving searches for

relevant literature, which were conducted on several academic databases. In addition, internet searches were carried out to identify publicly available documentation from government and non-governmental sources.

▪ Semi-structured interviews with organisations with an interest in rural tourism, which informed the development an analytical framework outlining how tourism related activities impact on local rural economies;

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▪ Data collection and analysis, including a review of up-to-date official tourism and local area statistics and a wider literature review of websites, centres for rural and tourism studies, journals and literature (see Annex 1 for further details) and a review of information provided by the Regional Development Agencies.

1.3 Structure This review begins in Section 2 with a discussion of the issues inherent in the definition of rural tourism and the type of effects we would expect to see in rural economies. In Section 3, the reader is presented with a review of the characteristics of tourism in rural areas, both the demands of tourists and the composition of the tourism industry seeking to meet these demands. Section 4 highlights the motivations underpinning providers of the ‘tourism product’ in rural areas, how income and employment is generated and the resultant costs and benefits of rural tourism. Finally, Section 5 summarises and concludes by discussing the implications of the review on current policy and practice, highlighting gaps in the literature on rural tourism, and setting an agenda for future research.

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2 Economic Impacts

Although tourism is not the dominant industry in rural England as a whole, there is no doubt that it has major effects on the economies of destination areas. Research has focussed, primarily, upon the economic aspects of the industry with the majority of studies being directed at international and national levels, with fewer investigations at the local level.

2.1 What is Rural Tourism? In a study of the evidence base on the impacts of tourism on local rural economies it is sensible to begin by trying to define exactly what we mean by the term, before we go on to examine the different forms which rural tourism can take and the impacts accruing to it. Tourism is a multidimensional, multifaceted activity, which touches a variety of economic activities. As a result there are a wide variety of different definitions and measures of tourism in the literature, often created to cater for particular needs and situations. For example, we can think of tourism as the ‘temporary movement to destinations outside the normal home and workplace, the activities undertaken during the stay and the facilities created to cater for the needs of tourists’.1 This definition conveys the diverse nature of tourism: ▪ tourism arises out of a movement of people to, and their stay in, various

destinations; ▪ there are two elements to tourism – the journey to the destination and the

stay (including activities) at the destination; ▪ the journey and stay take place outside the normal place of residence and

work (i.e. they are distinct from the resident and working populations); ▪ the movement is temporary and short term in nature; and, ▪ destinations are visited for purposes other than taking up permanent

residence or employment. More recently, attempts to define tourism have been led by the need to isolate trips from other forms of travel for statistical purposes.2 The Office for National Statistics (ONS) defines tourism as ‘a movement of people to places outside their usual place of residence, pleasure being the usual motivation’. Recognising the need for ‘technical definitions that lay down minimum and maximum lengths of stay and strict ‘purpose of visit’ categories’, the ONS highlights the international ‘standard’ used by those undertaking analysis in the tourism sector: ‘A visitor is a traveller taking a trip to a main destination outside his/her usual environment, for less than a year, for any main purpose (business, leisure or

1 Tourism: Economic, Physical and Social Impacts. Mathieson and Wall (1982) 2 Tourism Principles and Practice, Cooper C, Fletcher J, Gilbert D, Shepherd R and Wanhill S (1995)

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other personal purpose) other than to be employed by a resident entity in the country or place visited’3 The above definitions are quoted in the literature at length because they reveal how broadly the concept of tourism must be defined in order to embrace all forms of the activity. If viewed in economic terms, the tourist is engaged in a buying decision, spending money to gain satisfaction. This decision is distinctive in several ways: ▪ there is virtually no tangible return on investment, the product is an

experience rather than a good; ▪ expenditure can be substantial, certainly compared to other consumer

purchases; ▪ purchases are not usually spontaneous, rather they are carefully planned

(gifts and souvenirs have relatively little cost, travel and accommodation often have); and,

▪ the product is not consumed in the sense of other consumer products, although the cumulative impacts of visitors may mean the nature of the product may slowly change.

The measurement of tourism must also take account of: ▪ the core tourism offer, which focuses on the direct contribution of tourism

activities (i.e. the value added generated by the provision of tourism related goods and services), a concept applied through the World Tourism Organization (UNWTO) Tourism Satellite Accounts (TSA);4 and,

▪ a broader measure of tourism that takes into account the indirect effects (via the supply chain) as well as the impact of capital investment and collective government expenditure on behalf of the tourism industry (often called the total Visitor Economy).

Estimates of the economic contribution of tourism are then defined using both measures of Gross Value Added (GVA) and employment. We must also consider the role of tourism in local rural communities. Rural tourism has been developed as a result of a wide range of influences, including improved access, the market’s attraction for their rural roots, government policy to diversify the economy of rural areas and an increased trend for shorter and more frequent travel in urban hinterlands.5 As shown in Table 2.1 below, commentators have utilised the concept of a rural/urban continuum, with activity that is specifically rural flowing gradually into activity

3 International Recommendations for Tourism Statistics 2008 - United Nations, Department of Economic and Social Affairs, Statistics Division 4 A Tourism Satellite Account is a set of data tables based around analyses of data on both expenditure by tourists, and on business sectors which serve tourists. It provides definitive, comparable data on the economic significance of tourism, under an internationally-endorsed Framework, and is often used as the basis for analysis / modelling of the effects of potential changes to policy or unusual scenarios such as external shocks to demand. 5 ibid 3

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that is specifically urban with a range of activity in between the two extreme points.6

Table 2.1 Characteristics of Rural Tourism vs. Urban Tourism

Rural tourism Urban tourism

Focus on open space, the natural environment, seaside resorts and outdoor activities. Activity tends to be small in scale and the approach is typically local, traditional and personal. Types of trip might include: ▪ farm-based holidays; ▪ special interest nature holidays and

ecotourism; ▪ walking/climbing and hunting/angling

holidays; tourism; ▪ adventure, sport and health

▪ rural events and festivals; ▪ rest and relaxation holidays based nd

▪ industrial/urban heritage tourism. on the ▪ entertainment/gambling holidays; a

rural idyll; and

Focus on entertainment/retail, the built environment and indoor activities. Activity tends to be larger in scale and the approach is typically professional, cosmopolitan and anonymous. Types of trip might include: ▪ city sightseeing; ▪ shopping; ▪ health spa resorts; ▪ sports requiring man-made

infrastructure i.e. international arena based events;

▪ major conferences and events;

▪ rural heritage tourism.

This account emphasises the interconnectedness of urban and rrecognising that activities often display a mix of urban and rural characteristics, and/or may be in the process of change from one form to another. Many types of holiday can be developed in both urban and rural locations, and vi

ural tourism,

sitors may be involved in both urban and rural activities on the same day.

2.2

an areas

tains

and farms are bases for additional family businesses in the tourism

those of s:

r, problems that are

unlikely to be experienced by their urban counterparts.

The Characteristics of Rural Economies The business mix in rural areas is much less reliant on agriculture and land based industries than people may think, being broadly similar to urband characterised by high levels of small and micro business, self employment and home working. However agriculture creates and mainthe landscape and environmental quality on which much rural tourism dependssector. The employment profile of rural economies is increasingly similar to cities. 80% of employment in rural districts was in four key sectordistribution and retailing; business and financial services; public administration, education, training and health; and manufacturing.7 Howevepeople running businesses in rural areas still encounter

Evidence 1: The economic downturn and its impact on rural communities Rural communities have faced a linked series of serious external shocks over the last two years: the shock of higher oil prices – for both transport and for heating; the shock of the

6 Tourism Strategies and Rural Development 1994 - OECD 7 CPRE evidence to the House of Commons Environment, Food and Rural Affairs Committee Inquiry into the potential of England’s rural economy (2008)

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credit crunch – affecting large numbers of rural businesses and households; and the economic shockwaves that are rippling out from the recession – businesses closures, pressures on employment, pressure on individuals, families and communities. Particular concerns were expressed by the Commission for Rural Communities, through regular reports to the previous Government’s National Economic Council meetings, about the impact of the recession on small and micro businesses. It is because they are small and dispersed that:

▪ they are less likely to know about the business support that is available to them; ▪ they have - historically - been less able to access and draw upon government forms of

support; ▪ they are more likely to be informal in some of the ways they conduct their business

(and less likely to have a formal business plan); ▪ they are more likely to rely upon informal or household credit lines, rather than formal

business loans; and ▪ they are less likely to know about the business support that is available to them.

Work undertaken in recent years by the Commission for Rural Communities (CRC) has sought to develop a deeper understanding of the diverse nature ofthe economies of rural areas. It aims to identify the different economic driveand outcomes tha

rs

t would define and support prosperous rural market towns. ing

ttlements of England. There also tends to s

l areas. This disadvantage can be harder to

g in her levels of self-employment and

e levels. ility

They suggest that most of England’s rural economies display the followcharacteristics: 8 ▪ An increase in the absolute numbers of people living in rural areas,

especially in the peripheral areas. However, proportionally fewer rural people are in the age group 16–40, and there are higher proportions of elderly people in the sparse sebe a lower proportion of people from ethnic minority groups in rural areathan there are in urban areas.

▪ Notable ‘pockets’ of income disadvantage, despite average household incomes being higher in ruraovercome, especially with the implementation of area-based solutions, due to its dispersed nature.

▪ Relatively high levels of employment due in part to rural people workinurban or mixed areas and also to highome-working. However, recruitment of graduates and young school leavers is lower than in urban firms.

▪ Educational achievements are generally high and skill shortages are not a marked barrier to many rural firms. Nevertheless some rural areas consistently report low skill levels that may partly explain low wagPoor access to recruitment and training support hinders the employabof young and economically inactive people in some rural areas.

8 Commission for Rural Communities (2008), England’s Rural Areas: Steps to Release their EconomicPotential - Advice from the Rural Advocate to the Prime Minister. See also the Government’sResponse to the report of the Rural Advocate.

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▪ The overall competitiveness of many rural economies is weaker than urban areas 9 because of poorer outcomes, such as lower rates of pay. In

an,

d services amongst rural firms appear to compare

ally ld).

d nature

ffected by urban demand. This ‘connectedness’ leads to rural

me faced by rural communities through directly and indirectly

increasing local employment levels, stimulating domestic industries, on of the local economy and improving local

2.3 ts the economy of those areas – whether

a

ne tourist establishments,

some rural areas productivity significantly lags behind the English medithough there are higher numbers of businesses per capita in rural areas generally.

▪ Business creation rates, including by women and in knowledge-based firms are strong, as are survival rates of small firms, but outputs of many existing businesses are lower than appears to be the case elsewhere.

▪ Innovation in product anwell with other areas – but weakness exists in key elements of innovation drivers and infrastructure. Evidence suggests urban bias in innovation policies and initiatives.

▪ Investment levels from public sectors and private funds are weaker, costsare often higher, and reliance/expectation that projects will have to generate funds locally appears to be more pronounced.

The CRC suggest that economic conditions in rural England are intrinsiclinked to conditions and changes in urban England (and in the wider worFor example, rural household incomes are influenced by the scale anof commuting to and from urban areas and rural housing affordability is strongly abusinesses tending to have much broader markets than their urban counterparts. Hence their economic viability is often dependent on external demand. The development of tourism is seen as providing a possible solution to soof the challenges

encouraging the diversificatiinfrastructure.10

The Economics of Tourism Like other industries, tourism affecnations, regions or localities – where it takes place. Tourist expenditure has‘cascading’ effect throughout the local economy. This is represented in diagrammatic form in Figure 2.1. It begins with tourists spending money in front lisuch as hotels, and restaurants, and then permeates throughout the rest of the economy. It can be examined by assessing the impact at three different levels – the direct, indirect and induced levels: ▪ The Direct Level: This is the value of tourism expenditure less the value

of imports necessary to supply the ‘front line’ goods and services.

9 cal UK Com The Lolarge p2008 - there was some evidence that rural and less densely populated areas may be losing competitiveness relative to other localities, and falling down the UK Competitiveness Index.

petitiveness Index 2010 (Robert Huggins and Piers Thompson) reported that a roportion of the UK’s most competitive localities were in and around London. In 2010 - as well

10 Scottish Parliament (2002), Rural Tourism – SPICe Briefing, 21st August 2002

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▪ The Indirect Level: This is the generation of economic activity brought about by the subsequent rounds of expenditure, and does not include all of the money spent by tourists as some will leak out of the local area through imports, savings and taxation.

▪ The Induced Level: This is the income which will accrue, during the direct and indirect rounds of expenditure, to local residents in the form of wages, salaries, profit, rent and interest and will be re-spent on goods and services.


Figure 2.1 Tourism – a Socio-Economic Model

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In this section of the report we examine the effect of tourism on income and employment in more detail.

2.3.2 Income Income is generated from wages and salaries, interest, rent and profits. In a labour intensive industry such as tourism, the greatest proportion is likely to be derived from wages and salaries paid to those working in jobs either directly serving the needs of tourists or benefitting indirectly from the tourists’ expenditure. Income will be greater in those rural areas which receive large numbers of tourists, where visitors tend to stay for longer periods, where the destination attracts a higher value customer and where there are more opportunities to spend. Income is also generated from the interest, rent and profits on tourism businesses, plus the taxation on tourism activities (i.e. such as VAT on hotel bills).

Evidence 2: The Scale of Tourism in Rural Areas The most commonly cited figure detailing the scale of tourism in rural areas was presented at the Select Committee on Culture, Media and Sport in 2001. The Committee was told that tourism generated £12 billion a year and supported an estimated 380,000 jobs and 25,000 small businesses in rural Britain. These figures were presented in the context of the total revenue generated by tourism in the United Kingdom being around £64 billion in 2001. The analysis goes onto note that many parts of rural Britain tourism has come to represent a mainstay of the economy, citing Cumbria as an example, where tourism accounts for 47,000 direct and indirect jobs, representing 20 per cent of the total Cumbrian workforce. Referenced as evidence presented to the Select Committee, the source of this data is unknown.

Attempts to measure the impact of tourism are difficult, because it is not easy to distinguish expenditure by tourists and the expenditure by others in restaurants or shops, for example. Furthermore, tourism’s contribution to the income of an area is enhanced by the tourism income multiplier, which arises as money is spent by tourists in the area and then re-spent by recipients, augmenting the total. Many studies have been undertaken of the tourism multiplier effect in different areas, from individual resorts to entire countries.11

Evidence 3: Tourism Multipliers Studies to assess the economic impact of National Parks in the Yorkshire and Humber region in 2006 construct economic impact assessments assuming that visitor expenditure will generate substantial knock-on effects on the sectors who supply tourism -based businesses. Typically these knock-on effects are assumed to be around 40% - 50% of the initial expenditure. Hence, for example, £660 million direct spend by National Park visitors could be responsible for almost £1 billion of output annually within the region.

A study on the visitor economy undertaken by Deloitte estimated that, in 2007, the direct contribution of the UK tourism economy was £52 billion, employing 1.36 million people. However, this is only part of the story. The contribution is much higher, at £114 billion, when indirect and supply chain

11 In most cases the multiplier has varied between 1 and 2.5, with estimates for the UK as a whole at around 1.7 and around 1.2 and 1.5 for individual towns and regions).

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industries are taken into account (i.e. the economic activity that is driven by tourism, and would otherwise not take place). ▪ this comprised income of £18.8 billion by international visitors and £67.6

billion by domestic tourists, with more than two-thirds of this domestic spending (£45 billion) related to day visit spend;

▪ around 45% of the overall contribution to GDP (£52 billion) relates to businesses providing tourism related goods and services directly to the visitor, with the remaining 55% of the total impact (£62 billion) arising through the visitor economy’s interaction with other businesses in the supply chain (i.e. this might include transportation, construction and professional and administrative services such as accountancy).12

There are spillover impacts in all sorts of sectors – some obvious (for instance retail) and others not so obvious (for instance, manufacturing in terms of supplies of hotel equipment and infrastructure development). In addition, there are wider socio economic impacts: ▪ job creation and enterprise opportunities for people at all skill levels – the

current economic climate reminds us that it is vital to have a diversified economic base;

▪ tourism helps to protect countryside and cultural heritage and subsidises and some services for local people (i.e. bus services in certain parts of rural England, which are only viable because of tourist demand); and,

▪ as a catalyst for regeneration activity (i.e. The Eden Project has led developers and others to invest in Cornwall - for example, this includes one of the new hotel developments in St Austell and Restormel Borough Council which has sought to develop the Eden Project’s role in expanding the local economy by improving transport links through Supplementary Planning Guidance).13

The Deloitte study did not include any direct calculation of the proportion of economic impact accruing to rural areas, although it does include an analysis by type of destination. As shown in Table 2.2, the largest income accrues from trips to large cities and towns but more than one-third of domestic tourism expenditure is made in the countryside and small towns (which we might consider to be a proxy for rural areas).14

12 Visit Britain and the Tourism Alliance (2008), The Economic Case for the Visitor Economy – Final Report (Deloitte), September 2008 13 Evaluation of the Eden Project and SWRDA's role, ECOTEC (2009) 14 The same analysis for the overseas component of direct contribution is unavailable since the International Passenger Survey, upon which this analysis is based, does not include a ‘type of destination’ breakdown.

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Table 2.2 Economic Contribution of the Domestic Visitor Economy by Type of Destination

Type of Destination Direct Industry GDP (£bn)

Seaside 8.9

Large city / town 15.9

Small town 7.8

Countryside / village 6.2

Visit Britain and the Tourism Alliance (2008), The Economic Case for the Visitor Economy – Final Report (Deloitte), September 2008

Table 2.3 also includes the proportions of the regional population living in rural settlements, and highlights the significance of tourism for both urban and rural regions.

Table 2.3 Economic Value of Tourism by Region, 2006

Total (domestic & international)

Direct Industry GDP Direct Industry GDP, with Indirect and Induced Benefits

Proportion of Population Living in Rural Settlements (2001) £bn % regional

GDP £bn % regional

GDP

South West 6.3 5.7 14.0 12.6 34.1

East of England 3.2 2.3 7.0 5.1 31.0

East Midlands 2.1 2.3 4.7 5.1 29.6

South East 5.8 2.6 12.8 5.8 22.4

Yorks & the Humber 2.6 2.6 5.8 5.7 20.0

North East 1.1 2.2 2.3 4.9 18.9

West Midlands 2.6 2.4 5.8 5.3 15.7

North West 4.7 3.4 10.5 7.6 12.2

London 14.2 5.8 31.5 12.9 -

Source: Visit Britain and the Tourism Alliance (2008), The Economic Case for the Visitor Economy – Final Report (Deloitte), September 2008; and Commission for Rural Communities (2006), The State of the Countryside 2006

A comparison of the proportion of population living in rural settlements and direct industry GDP (including indirect and induced impacts) is provided in Figure 2.2 below.

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Figure 2.2 Comparison of proportion of rural populations and tourism GDP (2001)

05

10152025303540

South West

East of England

East Midlands

South East Yorks & the

Humber

North East West Midlands

North West

Percen

tage

Region (excluding London)

Direct Industry GDP, with Indirect and Spillover Benefits

Proportion of Population Living in Rural Settlements (2001)

More recent analysis undertaken by ONS has sought to provide a reliable measure of the regional Gross Value Added (GVA) of tourism (see Table 2.4). The methodology provides two measures of GVA which are both considered to be best practice in relation to measuring tourism’s economic impact. ▪ The first indicator is the GVA of the tourism-related industries (GVA TI),

which provides a measure of the total supply-side value of those industries which meet the demand of tourists (as well as residents).

▪ The second and probably more important measure is the so called ‘Tourism Direct Gross Value Added’ (TD GVA). This measure is more accurate than GVA TI, as it moderates the value TD GVA in the light of the proportion of consumption made by tourists (as distinct from consumption made by residents in those industries).

The ONS figures show considerable variation in the proportion of total regional GVA contributed by tourism, with some regions (such as the North West) having a high proportion of GVA TI. When stripping demand derived from residents out of the total, a higher proportion of tourism GVA is derived from tourists in the East of England than in the North West.


Table 2.4 Economic Value of Tourism by Region, 2006

Region Total GVA (£billion) GVA TI (£billion) The amt of GVA directly deriving from the demand of tourists (as well as of residents)

Gross Value Added of Tourism Industries (%)

Total Direct GVA (£billion) The amt of GVA directly deriving from visitors’ expenditure

Demand- Supply Ratio (%) Tourism Direct GVA as a % of total GVA in each region

South East 181.9 14.6 8.04 7.2 4.0

South West 76.9 6.9 8.91 3.1 4.0

East of England 102.1 6.4 6.27 3.9 3.8

London 247.5 20.3 8.22 8.3 3.4

North East 35.9 2.1 5.98 1.1 3.1

North West 108.6 9.0 8.31 3.1 2.9

East Midlands 74.7 3.8 5.08 2.1 2.8

West Midlands 89.7 5.5 6.15 2.5 2.8

Yorks & the Humber

81.3 4.6 5.60 2.1 2.5

Total England 998.6 73.3 7.34 33.4 3.3

Source: Office for National Statistics: Tullio Buccellato , Dominic Webber, Sean White, Felix Ritchie and Shadia Begum (2010), The Economic Impact of Tourism Across Regions and Nations of the UK (DRAFT)

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2.3.3 Employment Tourism is also important to an economy because it generates employment, both directly (i.e. through businesses providing tourism goods and services) and indirectly (i.e. through sectors that rely on tourism through the supply chain). Even when thought of in terms of those businesses directly providing goods and services, tourism generates employment across a diverse range of enterprises (see Table 2.5).

15 Table 2.5 Tourism Industries – main types of direct employment

Accommodation Hotels

Youth Hostels

Recreational Vehicle Parks, Trailer Parks and Camping Grounds

Holiday Centres and Villages

Rented Accommodation (short term)

Second Homes

Provision of Food and Drink Restaurants (fine dining to fast food)

Pubs (family run pubs to gastro pubs), Bars and Nightclubs

Travel and Tourism Services

Travel Agencies

Outbound Tour Operators

Travel Ticketing Agencies

Bureaux de Change

National and Sub-National Tourist Boards

Tourist Information Centres

Inbound and Domestic Operators

Arts, Entertainment and Recreational Activities

Fairground Attractions and Theme Parks

Piers, Historic Sites, Railways and Other Attractions

Libraries, Archives and Museums

Botanical/Zoological Gardens and Nature Reserves

Sporting Activities

Concerts, Opera, Dance and Stage Productions

Retail Food and Non-Food (e.g. gift shops)

Transportation Coaches, Train Services, Ferries and Taxis

Many of the jobs created are seasonal or part-time, so that tourism’s contribution to full-time employment is considerably less than its contribution to ‘job hours’.16 The literature suggests that this characteristic is particularly strong in the case of rural tourism.17 The common pattern for many businesses is to build up reserves during the summer months to survive and

15 Tourism : economic, physical and social impacts, Alister Mathiesen and Geoffrey Wall (1982) 16 Tourism and Economic Development. Alan Williams and Gareth Shaw (1998), page 200 17 HMSO (2001), Select Committee on Culture, Media and Sport Fourth Report - Tourism: The Hidden Giant

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retain staff during the leaner winter months. Needless to say, this seasonality means that unexpected reductions in demand in the spring and summer are especially damaging and have profound implications for business survival and staff retention in the winter. The tourism industry is also often criticised for providing only low wage, seasonal employment.18 It is important to recognise: ▪ as many of the Regional Development Agencies have, that tourism may

be of greater value in those areas where there are few other opportunities for employment or there is a need for ‘entry level’ jobs in the service sector; and,

▪ many of the jobs attract those who wish to work seasonally, such as students or those who open their homes for summer periods as bed and breakfast establishments.

The analysis undertaken by Deloitte, highlighted above, suggested that some 2.65 million jobs in both urban and rural areas depend on tourism and associated activity. Our own analysis, using Annual Business Inquiry data and compared with the ONS rural and urban definition, is based just on those jobs directly dependent on tourism. It shows that tourism employment is distributed relatively evenly, but more sparsely populated villages and hamlets are more dependent on tourism than other areas.

Table 2.6 Employment in tourist related industries, 2008

All employment

All tourism employment

Tourism Employment as a % of All Employment

Tourism Employment: % Full Time

Tourism Employment: % Part Time

Urban > 10K - Less Sparse

19,654,000 (86%)

1,484,000 (80%) 7.6% 49% 51%

Urban > 10K – Sparse 45,000 (0.2%)

7,000 (0.4%) 16.1% 51% 49%

Town and Fringe - Less Sparse

1,370,000 (6%)

132,000 (7%) 9.6% 45% 55%

Town and Fringe - Sparse

94,000 (0.4%)

15,000 (0.8%) 16.4% 44% 56%

Village, Hamlet & Isolated Dwellings - Less Sparse

1,666,000 (7%)

202,000 (11%) 12.1% 48% 52%

Village, Hamlet & Isolated Dwellings - Sparse

102,000 (0.4%)

23,000 (1.2%) 22.3% 46% 54%

All England 22,932,000 (100%)

1,863,000 (100%) 49% 51%

Source: Annual Business Inquiry (2008) by Super Output Area, analysed by the ONS rural and urban definition.

18 The Business of Tourism. J Christopher Holloway (1998)

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There is evidence of higher concentrations of employment in tourism in some rural areas, notably where the offer may be focussed around physical or natural features as well as along coastlines, seaside attractions and national parks.

Table 2.7 Share of employees in tourism as share of total employment (2008)19

Rank Region District % tourism 1 South West Isles of Scilly 31

2 South West West Somerset 25

3 East Forest heath 22

4 London Kensington and Chelsea

21

5 South West Penwith 21

6 North West South Lakeland 20

7 North West Eden 20

8 South West Restormel 20

9 North East Berwick-upon-Tweed 19

10 Yorkshire and Humber

Scarborough 19

The multiplier which affects income in a locality also affects employment in the same way. If a tourist stays at a destination, jobs are directly created in the tourism industry. These workers and their families must also buy goods and services locally. This in turn gives rise to jobs in shops, schools, hospitals and other local businesses to serve their needs. The value of the employment multiplier is likely to be broadly similar to that of the income multiplier, assuming that jobs with average wage rates are created. Employment in tourism related industries has shown strong growth rates during the last two decades, with the literature suggesting that the strongest growth being found in urban areas, most notably London.20 The success of tourism will, in part, depend upon an adequate supply of skilled labour, with the right motivation towards employment in the industry. However turnover of labour is relatively high, which may be attributable to relatively low salaries and poor working conditions compared with other industries. ONS analysis in 2003 found that, on average, a tourism business typically creates one full time equivalent (FTE) job for every £40,000 of tourism expenditure. Sectoral analysis indicates that while similar levels of expenditure are required to support each job in the accommodation and attractions sectors, a significantly lower level of expenditure is required to support each job in the restaurants sector (see Table 2.8). In the accommodation and attractions sectors, average turnovers per job are, respectively, 13.2% and 24.0% lower for SMEs than for large companies. However, in the restaurants sector, SMEs have a turnover per job 14.4%

19 The economic contribution of the Visitor Economy: UK and nations, Deloitte (2010) 20 Williams and Shaw (page 207)

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higher than for large companies. This difference stems from the restaurant sector containing fast food chains and branded restaurants, which tend to have much lower overheads than other tourism-related businesses.

21Table 2.8 Average Turnover Per Job, by Type of Tourism Business

Accommodation Attractions Restaurants

Average Turnover per Job for SMEs

£39,800 £33,100 £39,800

Average Turnover per Job for Large Companies

£45,900 £43,500 £34,800

Source: VisitBritain (2003), Employment generated by tourism in Britain (Caledonian Economics Ltd). Note: Generated using tourism expenditure data for the year 2000.

2.4 Summary The scale of economic impact of tourism in rural areas is determined by a range of factors. While a great deal of information is available at the international and national level on the economic benefits and costs of tourism, based on national and international surveys, much less information is available at the sub-national level and for rural areas. There is no definitive account in the literature of the contribution of tourism to rural economies, most notably the extent to which it generates income, employment and entrepreneurial activity, much less the extent to which this impacts on local rural economies. There are very few analyses of indirect and induced impacts of tourism on local rural economies and few linkages made to the flows of income to and from urban areas. Accurate measures of tourist expenditure in rural areas are difficult to make – it is a fragmented and complex industry - and it is not a requirement that local authorities report on tourism (i.e. tourism is not included in the recently reviewed list of 198 indicators that local authorities are required to use). It may be necessary to undertake specific tourist expenditure surveys to establish tourist spend in particular rural areas. In Annex 2 and 3 we review the available evidence and highlight where data is available at a local level and for rural areas.

21 Turnover defined as revenue from sale of goods and services

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3 Characteristics of Rural Tourism

In this section of the report we review the characteristics of tourism in rural areas, both the demands of tourists and the composition of the tourism industry seeking to meet these demands, and explain the ways in which tourism related activities evolve and the drivers of change.

3.1 The Visitor Profile The latest national data suggests that there were 103 million domestic tourism trips in England in 2008, generating £17.3bn in visitor spend.22 The number of overseas trips for the same year was less than a third of the domestic total (32 million), however the overall value was almost equal (£16.3bn). As shown in Table 3.1, average spend per trip varies significantly by visitor type, and also within that by trip type: for example, a domestic visitor visiting friends or relatives spends £96 on average, compared with an overseas visitor on a business trip who typically spends £565.

Table 3.1 Summary of Visitor Spend, 2008

Trips (millions)

Nights (millions)

Visitor Spend (£m)

Average Spend per Night

Average Spend per Trip

Domestic

Holiday 47.3 169.5 9,741 57 206

Business 15 33.6 3,516 105 234

VFR 38.2 103.2 3,682 36 96

Other * 2.4 6.6 342 52 143

All Domestic 102.9 312.9 17,281 55 168

Overseas

Holiday 10.9 72.0 5,480 76 503

Business 8.1 34.8 4,575 131 565

VFR 9.7 99.4 3,816 38 393

Other * 3.1 39.5 2,452 62 791

Total Overseas 31.9 245.8 16,323

66 512

Total 134.8 558.7 33,604 60 249

Source: UKTS (2008) and IPS (2008). * ‘other’ purposes covers a range of activities including overnight transit, getting married, looking for work etc.

The most recent data on day visits, collected in 2005, found there to have been an estimated 870 million tourism day visits from home in England,

22 Source: The UK Tourist Survey (UKTS) (2008) and International Passenger Survey (IPS) (2008): The data identifies, by category of visitor, the annual number of visitor days spent in the local (study) area. Visitor days are calculated by multiplying the staying visitors by average length of stay and adding the day visitors. Visitor expenditure is estimated through primary research, using an array of proxy variables tables which are applicable to both visitor categories and destination types (i.e. visitors in serviced accommodation, non-serviced accommodation, visits to friends and relatives and day visitors)

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equating to approximately £37.4bn. This equates to an average expenditure per visit of £43. National survey data does not allow these aggregate figures to be analysed by rurality but statistics covering domestic visits and day trips may be analysed by type of destination (Table 3.2 and 3.3).

Table 3.2 Domestic Visits by Type of Destination

Trips (millions)

Nights (millions)

Visitor Spend (£m)

Average Spend per Night

Average Spend per Trip

Large city/ large town 39.6 101.1 7,041 70 178

Small town 22.8 66.3 3,156 48 138

Seaside 17.8 70.5 3,560 50 200

Countryside/ village 17.2 56.6 2,640 47 153

All visits 95.5 295.4 16,433 56 172

Source: UKTS (2008)

Table 3.3 Day Visits by Type of Destination

Trips (millions) Visitor Spend (£m) Average Spend per Trip

Inland town/city 674 31,200 46

Seaside town/city

47 1,700 36

Countryside 136 4,000 29

Seaside coast 15 500 33

All visits 872 37,400 43

Source: England Leisure Visits Survey (2005)

Gaps in national data collection - specifically, up to date intelligence detailing the volume and value of day visits, and destination type for overseas visitors - preclude a full analysis of spend per trip in rural destinations. However the ongoing development of national data collection methods may facilitate the provision of additional detail in the future. In the interim, the available data suggests that visits to rural destinations tend to be of lower value on a trip by trip basis, despite the fact that visitors tend to stay in countryside/village locations a little longer than they would in a city or large town. Though this might be expected given that the focus of rural tourism is typically on enjoyment of the natural environment rather than shopping or entertainment, it means that a rural destination has to attract and host a higher volume of tourists than an urban destination to bring about the same economic impact.

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Evidence 4: Coastal Towns23 Historically economic activity within coastal towns has encompassed traditional industries that have declined, including manufacturing, ship-building, fishing and other maritime sector work, in addition to tourism. Official statistics show that the economy of seaside towns is diverse and that the range and trends in job sectors are broadly in line with the national experience, but with some noticeable differences in specific sectors. Recent employment growth has been ‘surprisingly broad based, indicating that the tourism sector is not the dominant industry in coastal towns to the extent that is commonly perceived, although it may be in some traditional seaside resorts.

Whilst a national level visitor profile provides an overview of the issues, it does little to enable the development of an understanding of expenditure by visitor type in one rural locality as compared to another, or to the surrounding non-rural areas. We were however able to identify examples of local studies where more detailed estimates of economic impact were applied. One such example is a study in Windermere and Bowness in South Lakeland, Cumbria, as part of a broader study commissioned by the North West Development Agency to develop their understanding of rural tourism on local economies.24 ▪ It was estimated that in 2007 South Lakeland had £510.1m of tourism

revenue (44.6% of the Cumbria total), 10.2m tourist days (36.2% of the Cumbria total), and 3.8m tourists. A significant proportion of this tourism reflected the broader offer of the area, alongside Lake Windermere (centred on Windermere, Bowness and Ambleside). It is further estimated that tourism spend in 2007 was associated with 8,843 full time equivalent jobs (42.2% of the Cumbria total) and with this translating to a total of 15,210 jobs supported by tourism. As in other parts of the UK, tourism in the area supports a relatively large number of part time employment opportunities.

▪ In terms of visitor profile in 2007, it was estimated that around 17.3% used serviced accommodation, 10.4% non services accommodation, and with 67.4% representing day visitors, and the small balance as tourists staying with friends and relations. In the context of economic impact linked to tourism consumption the proportion of staying visitors is a key factor. Moreover, higher numbers of day visitors can be connected to higher environmental costs linked to tourism consumption: for example, a higher proportion of total trip time in likely to be spent travelling, with implications for congestion on often limited road space.

▪ The distribution of tourism spending across Cumbria shows accommodation accounting for around 26%, food and drink 16%, recreation 5% shopping 8%, transport 10%, and other items and tax 35%. This spending profile is quite different to the average distribution of

23 House of Commons Communities and Local Government Committee, Coastal Towns, Second Report of Session 2006–07 24 NWDA (2009), Understanding Tourism’s Economic Impact – Final Report, August 2009 (Welsh Economy Research Unit and Regeneris Consulting)

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tourism consumption across the North West, with Cumbria featuring higher proportions of spend on accommodation, and with the constraints of the local supply side precluding a high percentage of spending in the locality on transport.

Overall, information examining the visitor economy across the whole of Cumbria suggests that two thirds of visits are for periods of less than a day, and with this type of visit having a very different expenditure profile from staying visitors, whether in serviced or non-serviced accommodation.

3.2 Visitor Perception and Motivations In preparation for the development of a South West Rural Tourism Action Plan, South West Tourism and partners undertook some research to explore how visitors describe rural tourism and the appeal and perceptions of the South West’s rural product.25 The findings comprise three core components:26 ▪ Language, i.e. which of the terms ‘farm’, ‘countryside’, ‘rural’, ‘coastal’

and ‘seaside’ visitors use to describe holidays and short breaks taken in the South West outside of towns and cities. On this issue, the research found that: – Visitors used different words to mean non-urban tourism, the most

popular being coastal and countryside. Visitors did not use the label ‘farm’.

– The language used did not vary significantly by socio-economic group or age – no one term was consistently used by any of the sub-groups.

▪ Appeal: the extent to which farm, countryside, rural, coastal and seaside holidays / breaks interest visitors. On this issue, the research found that: – Visitors were more interested in countryside, coastal and seaside

breaks than rural and (most notably) farm holidays. – This was true for all sub-groups although semi and unskilled manual

workers and visitors with children were more interested in seaside breaks than other groups.

– Generally speaking, the region’s oldest visitors, visitors without children and men were less interested in all types of non-urban tourism than visitors from other subgroups.

▪ Perceptions: i.e. the sorts of words visitors use to describe non-urban tourism in the South West, from traditional on the one hand (charming, English, relaxing etc.) to more modern on the other (cultural, fashionable, stylish etc.). On this issue, the research found that: – On the whole, visitors described non-urban tourism in traditional terms

with words like relaxing, friendly, English, charming and tranquil. Fewer than 5% of visitors described rural breaks as modern, luxurious, stylish or fashionable. Less than 1% thought of rural tourism as bland or dull.

25 South West Tourism (2006), Chapter Six: Rural Tourism 26 South West Tourism (2006), Chapter Six: Rural Tourism. * Socio-economic classifications: AB: Upper middle class; C1: Lower middle class; C2: Skilled working class; and, DE: Unskilled working class.

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– Compared with higher socio-economic groups, visitors from lower groups were less likely to describe rural tourism as English, charming, tranquil and cosy, but more likely to describe this kind of break as safe.

– Younger visitors were more inclined to describe non-urban tourism as active and energetic, with older visitors more inclined to describe rural breaks as friendly. Visitors with children are also more likely to describe rural tourism as active and energetic, but also as traditional, quaint and safe. Women are more likely than men to describe rural tourism as relaxing.

3.3 Summary The underlying visitor profile, and the economic base, provides boundaries on the direct impacts associated with different types of visitor consumption, which may be compared with other areas. While intervention might work to change the visitor profile at the margin and resulting spending patterns, the economic base of a rural area is much more fixed in nature. For example, levels of tourism spending potentially increase in line with new investment in tourism-facing infrastructure, and as tourism businesses invest in new facilities. In this respect, rural local economies face real challenges. At one level visitors and locals derive services from the unique environmental assets; on the other hand, poorly controlled investment in infrastructure and facilities can impact the national assets on which part of the tourism revenues are based.

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4 The Rural Tourism Industry

In this section of the report we outline the key characteristics of the tourism industry, highlighting the motivations underpinning providers of the ‘tourism product’ in rural areas, how income and employment is generated and the resultant costs and benefits of rural tourism.

4.1 The Tourism Industry The demand for tourism is met by the concentrated marketing efforts of a wide variety of tourism services. The UK has the fifth largest tourism in the world and includes travel undertaken for leisure, for business and to visit friends and relatives. Some of these services are crucial to the generation and satisfaction of tourists’ needs while others play only a peripheral or supportive role: ▪ Hospitality - 70,000 establishments including major world-class hotels,

country house hotels, guest houses, B&Bs, holiday and caravan parks and self-catering cottages and 110,000 restaurants, bars, pubs and catering companies.

▪ Attractions - 7,000 businesses including theme parks, museums, historic houses and heritage sites, parks, gardens and zoos.

▪ Events - Over 25,000 businesses staging conferences and meetings, festivals, exhibitions and concerts.

▪ Visitor Transport - Around 10,000 aviation, rail, coach and bus, vehicle hire and ferry companies.

▪ Tourism Services - including over 2,500 travel agent and tour operator businesses as well as guides, information centres and destination organisations.27

Several services, such as catering and transport, obviously serve the needs of consumers apart from tourists. Other services such as banks, retail shops and taxis may only serve tourist needs incidentally to local residents needs, although, at certain times of the year, their revenue may be heavily dependent on tourists. Inevitably, what one includes within the tourism industry must be arbitrary but Figure 4.1 provides an overview.

27 Source: Tourism Alliance

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Figure 4.1 The Network of Sectors in the Tourism Industry28

The literature suggests that the producers of tourism goods and services in rural areas are fragmented and also integrated, being directly affected by many other sectors of the economy. Figure 4.2 is based on the Annual Business Inquiry and highlights the heterogeneous nature of the tourism industry in rural areas. In many rural areas, tourism has become a more significant source of income and employment as agriculture has declined. According to evidence presented at the Select Committee on Culture, Media and Sport in 2001, visits to the countryside became a more significant component of tourism in the course of the 1990s, so that rural tourism had come to generate almost twice as much revenue as livestock farming.29 Deloitte (2008) highlighted that rural areas, on the whole, are dependent on tourism-related activities for economic returns to a greater extent than their urban counterparts. Indeed, eight of the ten authorities that scored highest in terms of the proportion of their economies directly associated with visitor economy-related industries also had 100% of their population resident in rural areas.30 While evidence suggests that the structure of rural economies closely mirrors that of urban ones, there are certain differences, such as the greater prominence of micro-businesses and land-based industries. Sparsity provides particular challenges by influencing the size of local networks, product and labour markets, access to services and infrastructure, and the delivery of and access to business support services. These challenges are particularly great in more remote rural areas.

Producers

Transport and Carriers

Accommodation

Including hotels, guest houses,

apartments, holiday centres, caravan

parks, villas.

Man- Made Attractions

Including stately homes, ancient

monuments, activity centres, themes parks and catering facilities

Private Sector Support Services

(e.g. Travel insurance, marketing)

Public Sector Support Services (e.g. Business Link)

28 Based on Holloway, 1998, page 67 29 HMSO (2001), Select Committee on Culture, Media and Sport Fourth Report - Tourism: The Hidden Giant 30 Visit Britain and the Tourism Alliance (2008), The Economic Case for the Visitor Economy – Final Report (Deloitte), September 2008

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4.2 Motivation of Rural Tourism Providers There are a wide range of qualitative studies that suggest that rural areas attract a large number of small businesses and non-growth oriented ownership-entrepreneurs. These ‘lifestyle entrepreneurs’ are motivated by quality of life rather than traditional notions of economic growth: The perceived nice life, often close to the beach or the mountainous regions, has frequently motivated entrepreneurs to leave their job and set up a tourism enterprise. Quite often this implied primarily following a dream, often with no experience, training or expertise in these areas. Sometimes this is financed with savings from property or previous careers and is propelled by plenty of optimism that things will work out. The prospect of living at the attractive area, where entrepreneurs may have visited as tourists made all other business aspects that come with that look irrelevant or secondary.31 Peters et al (2006) summarise the characteristics of lifestyle entrepreneurs as follows: ▪ motivated by quality of life rather than growth (survival and generation of

sufficient income to maintain their and their families’ way of life); ▪ main priority is life style rather than customer service; ▪ very limited growth orientation; ▪ underutilisation of resources, capital investment and information and

communication technologies; ▪ irrational management and non return-on-investment based decision

making; ▪ limited marketing and product development expertise and activities; ▪ reluctant to accept professional advice or external involvement; ▪ low education and training on management; ▪ not fully aware of quality management techniques; ▪ low involvement within industry growth and industry structures; ▪ distance from lobby organisations and tourism boards; ▪ unwillingness to let go or to sell their ventures; ▪ low innovation and unwillingness to cooperate; ▪ high dependency on distribution partners for their earnings - even when

this is detrimental to profitability and competitiveness; and/or ▪ questionable economic sustainability as a result of peripherally, distance

from the economic core and sparseness of population.

31 Peters M, Frehse J and Buhalis D (2006), The importance of lifestyle entrepreneurship: A conceptual study of the tourism industry


Figure 4.2 Proportion of Businesses by Sector

6%

15%

5%

9%

7%

14%

4%

9%

2%

6%

8%

21%

28%

32%

39%

36%

13%

14%

34%

23%

27%

25%

41%

29%

4%

4%

6%

4%

3%

2%

5%

6%

3%

3%

3%

4%

14%

8%

10%

9%

21%

13%

5%

4%

9%

8%

4%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Town and Fringe ‐ Less Sparse

Town and Fringe ‐ Sparse

Urban > 10K ‐ Less Sparse

Urban > 10K ‐ Sparse

Village, Hamlet & Isolated Dwellings ‐ Less Sparse

Village, Hamlet & Isolated Dwellings ‐Sparse 551 : Hotels

552 : Camping sites and other provision of short‐stay accommodation

553 : Restaurants

554 : Bars

633 : Activities of travel agencies and tour operators; tourist assistance activities not elsewhere classified

925 : Library, archives, museums and other cultural activities

926 : Sporting activities

927 : Other recreational activities

Source: Annual Business Inquiry (2008) by Super Output Area, analysed by the ONS rural and urban definition.

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Although lifestyle entrepreneurs do not follow typical economic motives, Peters et al (2006) argue that their contribution to economic welfare and customer satisfaction should not be underestimated. Lifestyle entrepreneurs often get involved in business because they are experienced consumers, who either make a profession out of their hobby or seek customer solutions in the respective leisure or tourism industry. Often, in their eyes, markets do not provide optimal customer oriented solutions so they decide to do this on their own. Many lifestyle entrepreneurs can be seen, on occasions, as lead users who can be important sources of product/service innovations. This analysis is supported by research recently undertaken by South West Tourism which found that a significant proportion of the region’s tourism business base could be defined as ‘lifestyle’ enterprises – they are not necessarily motivated to maximise profit first and foremost.32 Their analysis identified three major business motivations in the rural tourism sector, though an individual business may have more than one motivation: ▪ Location Maintainer Driver: This type of business is normally

characterised by being run by a family that have been located either in the area, or in the exact location, for a number of years, in some cases decades or even centuries. Succession planning and the need to create businesses or employment for children can be a major catalyst for such businesses to grow or change direction.

▪ Lifestyle Change Driver: These businesses are often operated by people who have chosen the rural way of life, and value the quality of life above pure career development or wealth generation. This does not mean that they do not take running a business seriously or that they are not interested in becoming more competitive whilst maintaining a good quality of life.

▪ Profit Generator Driver: These tend to be the largest scale businesses, but it is not restricted to large-scale operators. Here, more conventional business drivers operate, i.e., turnover growth, cost minimisation and yield management practices.

4.3 Generation and Retention of Income The presence of major national or international retail/cafe/hotel outlets are likely to lead to significant economic leakage as profits are often remitted outside the immediate area. Further, local managers of larger companies have less control over the direction of re-investment.33 Local rural economies that feature large numbers or high proportions of independent and/or small or medium sized enterprises are also more likely to retain economic impact of local tourism activity. The value of such a local approach was most clearly and robustly demonstrated by two case study analyses undertaken in the mid 1990s as part of a study to examine the impacts on rural development of different styles of tourism. Academic papers detailing this research (titled ‘Synergistic

32 South West Tourism (2007), Towards 2015 The Rural Dimension 33 NWDA (2009), Understanding Tourism’s Economic Impact – Final Report, August 2009 (Welsh Economy Research Unit and Regeneris Consulting)

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Pluriactivity ‘) draw a number of conclusions that are of interest to this review.34 Firstly, using primary data collected in 1994, Slee et al (1996) contrasted the repercussions of ‘soft’, land-based tourism (i.e. agricultural holdings providing bed and breakfast) with those arising from ‘hard’, enclave forms of tourism (i.e. hotels with more than ten bedrooms) on one district in Scotland - Badenoch and Strathspey in the Highlands.35 The research team found that: ▪ Visitors staying at accommodation in the hard tourism sector spend more

than twice as much per person per day as visitors staying at accommodation in the soft sector. This disparity was shown to have arisen mainly due to low levels of expenditure of visitors staying at camping and caravan sites and higher expenditure levels of visitors at hotels principally due to accommodation tariffs, with visitor spending in other expenditure categories broadly similar across the hard and soft sectors.

▪ The soft sector, however, was subsequently seen to produce a higher number of jobs per unit of visitor spending, mainly from the direct effect. Farm bed and breakfast and farm self-catering enterprises together produce the highest in terms of un-standardised jobs reflecting a higher proportion of seasonal and part-time employment.

Table 4.1 shows the total economic impact of hard and soft tourism on income and employment in Badenoch and Strathspey district.

Table 4.1: Total Economic Impact of Soft and Hard Tourism in Badenoch and Strathspey

Soft Accommodation Hard Accommodation

Core Core + Extended Core Core + Extended

Income (£) 655,575 922,757 3,155,261 4,251,751

Employment (FTE) 99.8 133.2 522.4 644.6

Source: Slee B, Farr H and Snowdon P (1996), The Economic Impact of Alternative Types of Rural Tourism, Journal of Agricultural Economics, Vol. 48 Issue 1-3, pp 179 - 192

Overall, the area is dominated by hard tourism, with this sector receiving the bulk of tourism spending. However, a relatively small soft tourism sector generates a pattern of visitor spending and tourist business transactions that generate a much greater level of economic activity per unit of visitor spending.

34 Discussion of the non-farming activities and non-farming sources of income of farmers and farm households is complicated by the divergence of definitions that are used. Some studies focus on the farm business, and consider the diversification of the business into areas other than traditional farming. Others focus more broadly on the farmers and their families, and consider the range of jobs or activities that they do - pluriactivity. A third group focuses on the non-farming income of farmers and their families, and includes unearned income sources, such as pensions and investments, as well as those associated with activities. 35 Slee B, Farr H and Snowdon P (1996), The Economic Impact of Alternative Types of Rural Tourism, Journal of Agricultural Economics, Vol. 48 Issue 1-3, pp 179 - 192

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Secondly, Vaughan et al (1998) presents the results for the Exmoor National Park component of the study, estimating the local economic benefits of visitor spending arising from ‘agro-tourism’ as compared with ‘non agro-tourism’ – the former consisting of tourists accommodated in, for example, farm houses, and the latter comprising tourists accommodated in, for example, hotels.36 The key findings, in relation to income and employment, are presented in table 4.2 below:

Table 4.2: Total Economic Impacts of Tourists on Exmoor

Type of Impact Agro-tourism Non-agro tourism

Size of impact (core plus extended area)

Spending (£) 5,234,500 3,542,200

Income (£) 1,754,100 1,200,600

Jobs (FTE) 230 150

Source: Vaughan Dr. DR, Farr H and Slee Dr. RW (1998), Estimating and Interpreting the Local Economic Benefits of Visitor Spending: An Explanation, School of Service Industries – Bournemouth University

Table 4.3: Measures of the Rate of Income and Employment Generation in the Core and Extended Study Areas

Income (£) Employment (FTE) Measure Agro tourism Non-agro

tourism Agro tourism Non-agro

tourism

Impacts per £100,000 of visitor spending

33,500 33,900 5 4

Impacts per 100,000 visitor 24 hour periods

532,300 1,455,800 71 180


The results for Exmoor (Table 4.2) show that agro-tourism was most important in terms of tourist spending, income and employment. Table 4.3 shows the different rate at which income and employment is generated in rural areas (i.e. based on the expenditure of a cohort of 10000 tourists in a 24 hour period). Non agro-tourists, with a higher hourly expenditure rate, create economic impact at a faster rate than agro tourists. Put simply, it would take approximately three agro-tourist 24 hour periods to create the same level of income as one non agro-tourist 24 hour period.

36 Vaughan Dr. DR, Farr H and Slee Dr. RW (1998), Estimating and Interpreting the Local Economic Benefits of Visitor Spending: An Explanation, School of Service Industries – Bournemouth University

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Table 4.4: The Proportions of the Different Types of Direct Income in the Core Study Area

Type of tourism Employee income Owner income Total

Agro-tourism 34% 66% 100%

Non agro-tourism 65% 35% 100%


Finally, Table 4.4 illustrates the distribution of the direct income by the type of recipient, demonstrating that the proportion of local income payments made to employees rather than owners differs considerably by type of tourism. The researchers conclude by noting that the process of interpretation, and potentially generalising to other areas, cannot be sensibly undertaken in isolation from knowledge of an individual area. The Exmoor results on employment and income, for example, reflect the structure of the tourism industry in that area. The differences in the results for the other five case study areas (conducted in three different countries and six different regions) within the pluriactivity study suggest caution when transferring multiplier values and interpretations between apparently similar areas because the Exmoor results did not always display the same characteristics as in the other areas.

4.4 Diversification of the Rural Economy Although farm-based tourism has a long tradition, farm diversification into tourism has, in recent years, become more widely seen as an effective means of addressing the socio-economic problems of rural areas in general and the agricultural sector in particular.37 This trend is evidenced by recent figures which suggest that, in England, 51% of all full time farmers have diversified, many into tourism-related activities, earning them over £300 million annually.38 For farmers, the main benefits to accrue from diversification into tourism is the additional income (and, hence, longer-term security in farming) earned from the provision of services or products. It is not surprising, perhaps, that those farmers most willing to diversify into tourism have high levels of indebtedness but also have children wishing to continue the farm business.39 Benefits accruing to the area more widely relate directly to economic revitalisation through job creation and/or retention, and indirectly through the management of land (i.e. maintenance of the farmed landscape which is a considerable attraction to visitors, and which also provides a resource for food production).

37 Sharpley R and Vass A (2006), Tourism, farming and diversification: An attitudinal study, Tourism Management 27, pp 1040–1052 38 Defra (2010), Farm Diversification in England: Results from the Farm Business Survey, 2008/09 39 Sharpley R and Vass A (2006), Tourism, farming and diversification: An attitudinal study, Tourism Management 27, pp 1040–1052

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According to Sharpley and Vass (2006) tourism contributes relatively little extra income to farms, because enterprises tend to be small-scale and supply a highly seasonal market, but it tends to ensure the survival of such businesses. The analysis points to a number of challenges facing successful diversification of farms into tourism: ▪ Location: not all rural areas are equally attractive to tourists. Popular

scenic areas create a ‘neighbourhood effect’ of clusters of farm tourism enterprises whereas, in other parts of the countryside, the supply of tourist facilities is less intense. In short, the provision of accommodation facilities does not guarantee demand; the total product package must be sufficient to attract and retain visitors.

▪ Investment: diversification may require significant investment beyond the means of the business owner or greater than justified by potential returns. In such cases, diversification may only be possible if applications for public subsidies or grants are successful.

▪ Marketing: individual farm businesses normally possess neither the skills nor the resources for effective marketing, a prerequisite for success. Therefore, there is a need for collective collaboration and marketing through regional or national structures, whilst increasing attention has been paid in the literature to the potential contribution of clusters to developing local rural tourism businesses.

▪ Quality: the quality of products and services provided by farm tourism enterprises must meet tourists’ demand and expectations. For example, rural accommodation providers in Northumberland, UK, are having to upgrade their facilities in response to the needs of tourists attracted to the new and successful Alnwick Garden attraction.

The research undertaken by the North West Development Agency cited above, to develop its understanding of tourism’s economic impact, included consultation with a range of farm diversification projects, including those that are:40 ▪ operating farm shops or providing ‘Pick Your Own’ activities, capitalising

on the high importance tourists place on ‘sense of place’ and knowledge regarding the provenance of food. These ‘types’ of diversification were seen as a relatively natural progression i.e. dealing in activities largely connected to their everyday experience of selling their own products – albeit cutting out the middlemen. As such the small farm shop was seen as an evolutionary development and a useful means of ‘testing the water’ before embarking on other more tangential forms of diversification;

▪ open farms and educational guided tours have been a notable draw building the link between farming and tourism, as well as capitalising on the natural assets of the locality. Visitors, whether they are school parties, local people or tourists, are able to develop a greater sense of the connection between local produce, natural assets and the community; and,

40 NWDA (2009), Understanding Tourism’s Economic Impact – Final Report, August 2009 (Welsh Economy Research Unit and Regeneris Consulting)

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▪ farms providing different types of serviced and non-serviced accommodation can generate additional income. Often run by the farmer’s wife, this type of diversification allowed them to use their skills in further contributing to the core farm business. In many accommodation diversification cases, there were explicit links with the use of local products, where through food and drink from the locality appearing on menus or through signposting self-catering residents to local butchers, bakers etc.

The study also found that the improvement in supply side activity generated by successful diversification reduces leakage of tourism monies from locals (day visits) going outside the area.

4.5 Trends Effecting Rural Tourism Predicting the future in tourism is not an easy task. Tourism is increasingly faced with radical and unexpected change, whether this is the outbreak of foot and mouth disease or the restrictions placed on airlines by the eruption of a volcano and the dispersal of ash into the sky. These factors are often outside the control of local areas. A review of the literature, most notably the research and strategies of the Regional Development Agencies, highlights the need to take account of: ▪ tourists who are more knowledgeable and discerning, seeking quality in

products and services; ▪ an increasing emphasis on customisation and the need to develop

detailed customer profiles; and ▪ increasing emphasis on sustainability and practical measures to adopt

professional approaches to the management of visitors, traffic and resources.

This final issue is of particular importance to rural economies, where rural tourism and agriculture are inextricably linked, with farmers seen as custodians of the land. The appeal of the countryside as a tourist destination depends in considerable measure on the landscape as tourists visit rural areas to see a living, working countryside. Studies commissioned by the National Trust suggest that 40% of the jobs created through tourism rely directly on a high quality environment and that this increases to 60% to 70% in rural areas.41

41 National Trust (2005), Tourism: Policy from Practice

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Evidence 5: The Bio-Physical Environment A recent study by SQW on behalf of emda to assess the contribution of the Peak District National Park to the economy of the East Midlands found that 60% of local businesses felt they would either be seriously or to some extent affected by the deterioration in the quality of the landscape.42 Many farmers recognise their dependence upon tourism. Large numbers of them have been encouraged to diversify into farmhouse accommodation and farm tourism. The Heritage Lottery Fund, in their Valuing our environment research reports, calculated that, in places such as Cumbria, the South West, Wales and the North East, 40% of employment in tourism depends directly on a high-quality environment, rising to between 60% and 70% in rural areas.

Increasing emphasis is also being placed on understanding local culture and identity. Oliver and Jenkins (2007) argue that rural areas are increasingly capitalising on local distinctiveness by adopting ‘cultural markers’ as key resources in the pursuit of local and regional development objectives. The potential range of markers might include regional cuisines, languages, crafts, folklore, cultural sites and landscapes, literary and arts activities, music festivals and events.43 Whilst accepting that localities are fluid, multi-faceted and dynamic entities, and that landscape is not necessarily either culturally or socio-economically homogenous, this concept seeks to recognise development driven by communities that manage to successfully apply local knowledge to local resource to create products and intellectual property with commercial value. This activity encourages forms of ‘soft’ tourism whereby tourists, albeit temporarily, ‘embed’ themselves within a rural landscape and experience locally distinct cultural activities, products and environments. The literature suggests that this approach is likely to exhibit deeper penetration into the rural landscape (compared with ’hard’ tourism – that is the so-called ‘mass’ tourism of package tours - that tends not to be well integrated and utilises high levels of external capital use), with good absorption possibilities and retention of control and value by host communities. It has been suggested that managing the countryside for tourism should, ideally, be in accordance with what has been referred to as the sustainability ‘imperative’. More specifically, as tourism has become increasingly viewed as an effective means of addressing the socioeconomic challenges facing the countryside, sustainability – both optimising the developmental benefits of tourism and satisfying the needs of tourists within strict environmental parameters – has become a dominant principle and objective.44

4.6 The Benefits of Rural Tourism Tourism as an industry is often seen through different prisms when tourism development and support is being proposed. For example, residents who have a comfortable income and are satisfied with the quality of life of a local area are often opposed to more tourism, predicting that growth will increase

42 emda (2008), Contribution of the Peak District National Park to the Economy of the East Midlands – Final Report, November 2008 43 Oliver T and Jenkins T (2003), Sustaining Rural Landscapes: the role of integrated tourism, Landscape Research, Volume 28, Issue 3, pages 293 - 307 44 Flagship Attractions and Sustainable Rural Tourism Development: The Case of the Alnwick Garden, Richard Sharpleya (2007)

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congestion, pollution, increase inflation and put pressure on public services. If an area is being considered for tourism development and has high unemployment, the virtues of tourism are more apparent. Tourism income, though perhaps less than from other sources, may be the best possible choice under existing conditions, serving to increase revenues, reduce unemployment and enhance the quality of life for many residents. The opportunity cost of tourism under these circumstances is small or may not exist.

Evidence 6: Lake District National Park The balance between quality of life and growth factors are explicitly acknowledged by the Lake District National Park Authority. A key debate is how far tourism provision should be concentrated into areas. The underlying strategy is currently that within the National Park, development will be focused in identified sustainable transport hubs where there are opportunities to link attractions, facilities and locations. The planning regime also has ramifications for the extent to which businesses can act to extend the tourism season. For example, extending the season is linked to new built infrastructure in the locality, while the preferred planning option is development of transport links to wet weather facilities outside the park.

The Tourism Alliance suggests that the tourism industry has key attributes that serve local rural localities well: 45 ▪ it is a labour intensive industry - small increases in tourism translate into

large increases in employment; ▪ it has low barriers to entry – the supply of tourism products and services

can increase quickly to meet increased demand; and ▪ there is high demand – the UK is the 6th most popular destination in the

world. These attributes mean that, with the proper incentives in place, considerable benefits can be gained. Including: ▪ the provision of youth employment – more school leavers begin their

career in tourism and hospitality than in any other industry; ▪ the provision of regional employment - tourism employment is relatively

evenly spread across Britain with almost all regions gaining £1-3bn in expenditure;

▪ the provision of a high Return on Investment - due to the high latent demand for travel to the UK, returns on investment are high. It costs only £14 to attract a new visitor to the UK – 100 new visitors generate one new job and provide the Exchequer with over £3,000 in VAT payments alone; and

▪ the provision of a rapid Return on Investment - the average booking period for travel to the UK is just 3 months, meaning that incentives to travel are translated into revenue within months.

According to Curry (2009), one of the important economic effects of rural tourism is to be effectively ‘exporting’ local goods, services and environments, bringing income from outside the region. This in turn has

45 Tourism Alliance (2010), Tourism: The Opportunity for Employment and Economic Growth

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indirect or multiplier effects through which it helps to maintain the other businesses in rural areas i.e. tourism providing the anchor customer for many shops, garages and coach companies. In this way tourism, particularly in more remote areas, transfers wealth from the richer urbanised areas to the poorer peripheral regions.46 Tourism and its perceived costs and benefits cannot be easily manipulated into an economic model, to produce a cost benefits analysis to aid decision making. Though now quite dated, a piece of research commissioned by the Rural Development Commission in 1996 analysed the ways in which tourism impacted upon on local rural areas in eleven case study communities of varying types. Based on detailed primary research covering a range of issues, this study found that tourism activity generated a range of community benefits:47

▪ increasing the range and viability of local businesses: residents in these areas benefitted from an increased choice of commercial services afforded by businesses catering for tourists. Without tourists, the critical mass for provision may not be reached meaning that local customers would lose out. Results showed a significant enhancement of the viability of their core shops (food and non-food) in settlements where tourism was relatively important. General stores, post office, pharmacy, the butcher and newsagents often open longer hours, have a better range of products and offer lower prices (many have informal two-tier price systems in the shops that benefit local residents);

▪ contributing to social and community life: the research found the successful promotion of events and festivals, and the enhancement of sports and leisure facilities (i.e. enhancing the viability of cinemas, arts, music venues and programmes) that are accessible to local residents, to be an important benefit for individuals and businesses, making social life more interesting and varied was recognised in most places where tourism was a relatively important activity. In all settlements where tourism was important it was reckoned to have increased the attractiveness of the place to in-movers;

▪ helping to maintain or improve services: in the case of transport services, tourism’s main contribution was to sustaining and improving bus services. The inclusion of bus and train services in tourism literature gives them a higher profile and may have made it more difficult to discontinue them. Tourism use of health services (GP practices and hospitals) produced significant benefits in a few places, either by leading to improved surgery facilities or by helping to keep the hospital open. Similarly, tourism use, or tourism business use, of post offices and banks was a moderate or significant factor in keeping them open in all the settlements where tourism was important.; and,

46 Curry, N. (2009), Leisure in the landscape: rural incomes and public benefits, in Bonn, Aletta, Klaus Hubacek, Timothy E. Allott and Jon Stuart (eds.). Drivers of environmental change in uplands. Routledge, London and New York 47 Rural Development Commission (1996), The Impact of Tourism on Rural Settlements – Rural Research Report Number 21

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▪ bringing about environmental and infrastructural improvements: encouraging the provision of better parking facilities and the conversion / re-use of redundant buildings were significant though the pattern was random suggesting that such provision may be opportunity driven or governed by many considerations other than tourism. Encouraging local pride and a more attractive, better-kept environment (including encouraging property owners to keep their properties in good order) was significant in most of the small and medium-sized places where tourism was important. The need to cope with visitors’ cars had led to significantly better traffic management schemes though this could be seen as coping with a problem brought on by visitors rather than as a benefit as such. Extension to conservation areas, improvements to the footpath network and signage, and better interpretation of the local heritage as a result of tourism were significant in all the settlements where tourism was important.

4.7 Challenges Facing Local Areas Commonly cited issues, from across the tourism literature, included crowds at peak times/disturbance, litter, congestion, parking issues and higher house prices, though the analysis presented an aggregate view suggesting that each community believed the positive impacts to far outweigh the negative ones overall. For example, a small minority of respondents to the Review on Rural Economy and Affordable Housing, primarily consisting of parish councils, suggested that it was not helpful to overemphasise the role of tourism as an economic driver in rural areas. These respondents claimed that tourism only brings low-paid seasonal work, rather than high value employment that is required to stimulate truly sustainable economic development.48 Critics point out the dangers to the economy of local rural areas of excessive dependence on tourism. Further, dependence on access to a landscape heavily influenced by farming, and heavily reliant on passing trade49, rural tourism is vulnerable to economic shock since disruption in one area of the economy quickly spreads through a complex network of supply chain linkages. This vulnerability was most clearly demonstrated by the indirect impacts that 2001 outbreak of Foot and Mouth Disease (FMD) had on local rural areas:

48 Matthew Taylor Review on Rural Economy and Affordable Housing, Analysis of Responses to the Call for Evidence, Ove Arup & Partners (June 2008) 49 Defra (2001), Report of the Rural Task Force: Tackling the Impact of Foot-and-Mouth Disease on the Rural Economy, October 2001

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Evidence 7: Foot and Mouth Disease in Cumbria Immediately prior to the foot and mouth disease (FMD) outbreak, almost ten times more people were directly employed in tourism in Cumbria than in farming (39,000 compared with 4,200). A further 8,000 jobs depended on tourism indirectly through supply chain linkages. Research suggested that for every two direct jobs in tourism, one was created in supplying goods and services to tourism businesses. Indeed, one fifth of firms responding to the Cumbria Employer Survey 2000 stated that some of their workforce were dependent on tourism, including a third of manufacturing firms.

The first FMD outbreak was confirmed in Cumbria on 28th February 2001. On confirmation of the outbreak, an ‘infected area’ was imposed, extending to a minimum of 10 km around the infected premises. Infected and other susceptible animals were valued and slaughtered to stop the virus spreading. In addition, country paths were to be closed to the public, as was about 70% of the 2000-mile inland waterway network of British Waterways. The closure of footpaths and inland waterways to the public, as well as the inaccessibility of businesses in exclusion zones around infected areas, had a considerable impact on rural tourism activities, as well as on other rural businesses.

By mid-April 2001, Cumbria Tourist Board were reporting drops in bookings of up to 80% in Cumbria, with an estimated 1,000 job losses. Whilst no full economic impact appraisal is available, estimates at the time suggested that the outbreak had led to a 10% (£95m) to 25% (£230m) shortfall in turnover for tourism businesses.

Tourism businesses in Cumbria's larger towns and villages were the first to bounce back, quickly followed by those where footpaths reopened. However, many tourism businesses in the remote rural areas and uplands saw a prolonger and significant decline in visitor spending.


Table 4.5: Summary of Community Impacts

Positive

Socio-Economic Cultural Physical: Built and Natural

Source of new/alternative/supplementary income and employment

Enhancement / reinvigoration local culture Contribution to conservation and protection

Encourages population retention in areas which might otherwise experience de-population

Increasing the attractiveness of the place to in-movers – population growth, inward investment

Assist refurbishment and re-use of abandoned properties

Tourism income underpinning viability of commercial services – improved range and quality

Instil a sense of local pride, self-esteem and identity

Demands of tourism market drive standards up

Tourism income underpinning retention of key public services i.e. bus routes, health services, banking facilities

Negative/Challenges

Socio-Economic Cultural Physical: Built and Natural

Economic leakages Manufacture and distort local culture for commodification and staged authenticity

Destruction of habitat

Local price inflation, and distorted local housing market

Distorted local housing market – high property prices creating a barrier to home ownership for locals on low/average incomes

Littering, emissions and other forms of pollution

Labour in-migration Weakening of indigenous way of life Congestion

Development of self-contained complexes with weak links to the local economy

New construction sprawl, possibly grafted onto existing settlements

Seasonal patterns of demand

Adapted from Scottish Parliament (2002), Rural Tourism – SPICe Briefing, 21st August 2002

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4.8 Leveraging Benefits and Managing Trade-Offs Local rural areas undertake a range of activity to promote their areas with the objective of attracting and retaining visitors, to encourage them to stay longer, thus driving value up at particular points of the impact pathway. This is underpinned by a common rationale: that there is a potential public good problem in the promotion of rural areas as a destination as individual businesses may decline to pay for this activity on the grounds that they believe that someone else will pay for it but they will still be able to enjoy the benefits. Based on the review of the activity funded through Regional Agencies, the types of activity and programmes undertaken were as follows: ▪ Branding – more specifically, brand development, brand consistency,

brand equity, brand monitoring and control, and media relations. ▪ Marketing and promotion – including leisure marketing and business

tourism marketing. ▪ Information services and media – relating to website, TV and print media,

and provision of information to the industry. ▪ Partner services – focused on recruitment and retention of partners, and

encouraging their participation in campaigns. ▪ Events and Festivals – bidding for and enabling the development of single

and, in some cases, a programme of events. ▪ Commercial activities – focused on increasing commercial revenues

through e-commerce, sponsorship, and awards. Local Authorities and/or partnerships (i.e. based on arrangements developed through national and regional programmes, such as the Market Towns Initiative and Vital Villages) work to increase the volume and value of tourism to their area and also potentially generates a range of wider impacts (such as an increased likelihood of future visits) as a result of its brand building and promotional activity. In addition, a range of areas across England have convened partnerships to broker solutions, and/or developed strategies and action plans to achieve change. Activity undertaken by New Forest District Council is accepted as best practice in this area:50

Evidence 8: Sustainable Tourism Management in the New Forest The New Forest is visited by millions of people each year: the majority of visits (10 million) are by local people from within the District; a further 3.5 million are day visitors from further a field; and 2.5 million are visits by people staying overnight in the area. There are approximately 500 tourism enterprises in the district, generating over £150million per annum in direct income. Tourism is a traditional part of the local economy and most enterprises are locally owned.

The local district has a resident population of 171,000 distributed between six main centres and many small villages. As in most rural communities, there is considerable concern to

50 Countryside Agency (2001), Sustainable Tourism Management in the New Forest – A Case Study and interview

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maintain unique quality of life, including not only the attractiveness of the area but also local services. In recognition of the unique historic landscape resulting from a medieval hunting and pastoral system, the New Forest became a National Park in March 2005, and large parts of the area designated as Special Areas of Conservation.

For the last 12 years New Forest District Council has worked with a wide range of local interests to improve the management of tourism in a way that resolves conflicts, minimises adverse impacts and brings benefits to all concerned. Their ‘VICE’ model seeks to realise four specific aims in relation to the four key constituencies of interest who could on the one hand influence tourism activity and on the other hand stand to benefit or lose through its impact.

▪ to communicate a sense of stewardship in all visitors, welcome them and fulfil their expectations;

▪ to work in partnership with industry to provide high-quality, environmentally aware services and facilities and to market them to appropriate audiences throughout the year;

▪ to empower the local community (especially young people) and create ownership through involvement in tourism matters; and,

▪ to promote a better understanding of the environment and manage all tourism development in a way that, where possible, it has a positive impact on its surrounds.

In the New Forest, the District Council has taken on the role of ‘honest broker’ to negotiate a mutually acceptable/beneficial way forward.

Tourism policies resulting from economic impact analyses can take the form of discouraging certain types of tourist/tourism, managing tourism movements and activities within the area, selective promotion of certain tourism markets, and selective development of tourism facilities. 51 All of these approaches are based on getting potential visitors to do what is wanted in terms of choosing to visit the area, choosing where to stay in the area and pursuing 'approved activities' (those giving the desired economic benefits) whilst in the area. At the same time the approaches are dependent on the providers of tourist services, to some extent, collaborating and agreeing priorities. Any assessment of economic impact and the subsequent policy options is faced by three challenges: ▪ Most of the interpretation of the information provided by the analysis is

couched in terms of ‘choosing’ which visitors give the best returns as judged by spending, income and jobs. The challenge is that in many cases there may not be ‘enough to go around’ (everybody choosing the same type, a possibility made more likely as results are commonly transferred to other areas) and if the selection of the policy target is done without consideration of market trends the results may not be beneficial.

▪ Tourism policy is, by nature, indirect. For example, the stock of accommodation can be controlled through planning controls and influenced through financial assistance. However, whilst it is possible to prevent something from happening, it is not so certain that visitors and businesses will make use of, or supply, the favoured facilities or activities. Caravan sites may be discouraged because their clients do not have as

51 Vaughan Dr DR, Farr H and Slee Dr RW (1998), Estimating and Interpreting the Local Economic Benefits of Visitor Spending: An Explanation, School of Service Industries – Bournemouth University

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high an economic impact potential as hotel visitors but it is difficult to predict whether those who would have provided, or visited, caravan sites

st

hbouring local authority, may want to increase

ic

area and wish to include the value placed on the activity by the visitor.

4.9

ual

mirrors

med

53

ts

ot

re,

s t

ers, and not gard it as merely a constraint to economic development.54

will transfer to hotels. ▪ Other organisations may have conflicting objectives. The policy may be to

encourage the types of visitor who will give the highest return for the leanumber of visitor days (limiting the numbers of tourists for conservation reasons, but still achieving 'acceptable' economic returns) while another organisation, such as a neigthe number of day visitors.

According to Vaughan and Walker (1997), the appropriateness of economic impact studies for tourism activities is in question.52 They question the meritsof a limited assessment which fails to measure the costs and non-econombenefits of tourism activity to the host

Summary One of the conclusions of our review is that the evidence documenting linkages within the tourism sectors is fragmented; referring often to individsectors and localities, and employing varied methodological approaches. While evidence suggests that the structure of rural economies closelythat of urban ones, there are certain differences, such as the greater prominence of micro-businesses and land-based industries. Economic restructuring in rural England – principally comprising the declining role of the agrarian economy in particular, and relatedly, the more central role assuby tourism - has significantly increased the complexity of managing the countryside in general, and its role as a resource for tourism in particular. Not only must access to and within the countryside be provided for touriswith an increasing variety of demands, but also such demands must be catered for in a manner which is environmentally appropriate, which does npreclude other legitimate demands on the rural resource, which optimises tourists’ experiences and which contributes positively to the socioeconomic regeneration of the destination area. Sparsity provides particular challenges by influencing the size of local networks, product and labour markets, access to services and infrastructuand the delivery of and access to business support services. The major economic significance of the natural environment is often underestimated. Conserving and managing the rural environment is not only important in itown right, but also in securing the range of benefits that the environmenprovides for society and the economy. Future policy decisions need to recognise the economic opportunities that the environment offre

52 Vaughan Dr. DR and Walker Dr. S (1997), Measuring the Local Economic Contribution of Countryside Recreation, School of Service Industries – Bournemouth University 53 Sharpley R (2007), Flagship Attractions and Sustainable Rural Tourism Development: The Case of the Alnwick Garden, England, Journal of Sustainable Tourism, 15: 2, 125 — 143 54 Defra (2004), Revealing the Value of the Natural Environment in England, March 2004

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5 Conclusions and Recommendations

In this final section we consider the implications for subsequent research (further, more detailed information, is provided in the Annexes to this report). Our overall conclusion is that some important aspects of rural tourism are not well covered in the statistics, most notably the impact of tourism on local residents and community sustainability.

5.1 Factors Influencing Impact Taken as a whole, the evidence base suggests there are a range of factors that influence tourism’s impact in rural areas: ▪ Tourism consumption distribution, including:

– spend per trip, dependent on day/overnight visitor, domestic/overseas, business/holiday/visits to friends and relatives;

▪ Seasonality of demand ▪ Breadth of economic base, including:

– quality of products and services; – ownership structure dictating motivation (growth versus quality of life)

and business acumen. ▪ Commuting patterns of tourism industry employees ▪ Purchasing patterns of hotels and attractions ▪ Planning regulations, including:

– parking and traffic management schemes; – establishment of conservation areas and appropriate consents to re-

use redundant buildings; – housing to accommodate aging population / in-movers.

▪ Investment in infrastructure – tourist-facing infrastructure – tourism information centres, signage; – broader enhancement of ‘quality of place’ (attractive public realm,

vibrant Town Centre offer). The literature presents a highly complex pattern of inter-dependent and interrelated factors which bring about change, both positive and negative, to dictate the scale and scope of the impacts tourism has on local rural communities. Commentators and decision makers have moved away from the homogeneous label ‘The Rural Economy’, replacing it with ‘Rural Economies’ in recognition of the fact that the economic drivers and outcomes differ significantly across the diverse range of rural localities. As such, models of growth and impact assessments are limited in their ability to facilitate an understanding of why one destination flourishes whilst another fails, or how communities might choose economic gains or trade-offs in an informed way. The development of this level of understanding requires detailed analysis of the various forms of tourism industry in the range of types of rural locality i.e. a national park benefitting from legal protection versus a

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wilderness landscape far from significant economic mass versus a village on the outskirts of an urban area. The evidence base was weakest in relation to this element of the analysis, presumably because the collation of reliable intelligence on these issues necessitates labour intensive, primary data collection. The economic impact of tourism activity is essentially a function of visitor consumption patterns, which are in turn dictated by the underlying visitor profile and the economic base. Economic impact studies, such as the Exmoor study, provide a range of results aimed at informing the development and management of resources, and can be used to achieve a balance between conservation, meeting the needs of users and improving the socio-economic welfare of the residents in host communities. The usefulness and acceptability of this economic information is dependent on the accuracy of the data. Vaughan and Walker (1997) state that while the basic concept of measuring the economic impact of rural tourism is relatively straightforward, implementing the surveys of visitors and businesses requires a thorough understanding of survey methodology and the characteristics of the users.55 There is, therefore, a trade-off between the accuracy of the data and the cost effectiveness of data collection. A number of national and regional level datasets enable partial analysis as follows.

5.2 National Level Summary

A key resource for estimating the local economic impact of tourism is the Annual Business Inquiry, both for estimating employment and key business financial metrics on the tourism ‘supply side’. Despite developments in the analysis and publication of IDBR data the reporting is insufficiently detailed to help greatly with estimates of the economic impact of tourism in rural areas i.e.

ABI suffers from under-representation of small and micro businesses – of the type which might be expected to be prevalent in certain tourism sub-sectors.

Datasets which complement or build on ABI are rare and limited in scope, reporting only the GVA (and its composition) for 16 broad industries (plus manufacturing) and inadequate to inform good policy in areas other than tourism (i.e. making the links through the supply chain).

We found that there is a raft of work in progress within ONS and VisitEngland – but none of it is specifically focused on rural areas and their needs. Where ONS has made / will make tourism data available for standard geographies (local authority, wards and SOAs), it is possible to apply the ONS rural and urban definition or Defra’s rural and urban classification.

55 Vaughan Dr. DR and Walker Dr. S (1997), Measuring the Local Economic Contribution of Countryside Recreation, School of Service Industries – Bournemouth University

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5.3 Regional Level Summary

A range of surveys have been commissioned by RDAs (such as NWDA, ONE) which are specifically aimed at filling data gaps on the tourism demand side, comprising surveys of, day visitors, staying visitors and business tourists.

A central problem is that the individual region is in some cases not best placed as the primary mover for developing surveys – or at least estimating overall visitor volumes as distinct from the behaviour of individual visitors or groups (the latter being easier to ascertain through hotspot or online surveys).

It is vital that surveys are structured to capture where consumption actually takes place (e.g. where spending is on accommodation, it is critical to understand whether some or all nights of a trip were actually in the region, locality).

Surveys should allow for the estimation of total spending by as detailed a list of commodities as possible, by location of purchase and by type of visitor.

Allied to this, to inform national policy, there is a need for a consistent approach to the estimation of economic impact, over both different surveys and over time.

In terms of the lessons for policy, the quality of the tourism offer and visitor experience are critical for high value added activity: ▪ maximising volume and value (led by industry), improving the offer and

quality of experience for tourism, through investments in skills; ▪ maintain the attractiveness of the tourism offer, explore new

markets/value propositions through targeted and coordinated marketing (including domestic and international tourist markets, taking into account new markets in the Gulf States, China and India), working across local administrative areas where necessary);

▪ adaptability, taking into globalisation, climate change and emerging markets (led by industry and tourism bodies); and,

▪ supporting the long-term drivers of economic growth (led by industry, Government and public sector), with coordinated investment in infrastructure.

5.4 Recommendations

Firstly, we recommend that work is undertaken with the English Tourism Intelligence Partnership and Partners for England to investigate the opportunity to more fully interrogate national business demography longitudinal datasets. This could include the analysis of data on employment and sales, as well as variables such as age of business, sector and ownership. Annual snapshots of the UK ‘live’ Inter Departmental Business Register locates each business by postcode, hence there is potential for it to

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be interrogated for small and/or bespoke geographical areas linked to Defra’s urban-rural classification. Secondly, we recommend that that research is taken forward to map total economic impact in a number of case study areas – selected to span the range of rural area types / economic contexts. The economic impacts of rural tourism are driven by visitor spending, so the focus should first be on assessing the levels of expenditure attracted to rural areas using primary research techniques. Survey work would comprise face-to-face interviews with a range of tourism-related businesses and visitors. This should include a robust visitor survey, which should be stratified to reflect breadth of relevant economic activity. Based on our interviews with stakeholders and the review of the available literature, before going on to assess the economic impacts in terms of GVA and employment impacts, it will be important to take account of the following:

The gross expenditure of those visiting, reaching an estimate of the spending of those additional visitors coming to the region, and the additionality of expenditure (i.e. including an estimate of the extent to which those visiting the area would have visited anyway, without the public and private investment made in improving the rural tourism offer).

The seasonality of rural tourism often encourages visitors to visit during peak periods (such as the summer or weekends) where the capacity of the sector can be limited, then other visitors may be 'crowded out.' Likewise, increasing tourist numbers might encourage residents to avoid busy areas, potentially crowding out spending to other areas (although it is likely that such expenditure will be displaced to other parts of the region).

Conversion of expenditure to GVA and employment, as not all expenditure attracted to the region will represent an economic impact in terms of increased GVA, as firms will need to procure intermediate inputs (such as the case of a restaurant procuring ingredients) needed to satisfy the demand from visitors. These goods or services may be produced elsewhere, resulting in economic impacts outside of the area of interest. Estimates of additional expenditure attracted to the area will need to be converted into estimates of GVA, as well as the potential employment supported by that expenditure.

Leakage of employment impacts, considering how far employment impacts have leaked outside of the area (for example, where jobs are filled by workers living in other areas, commuting in from towns). As the focus is on expenditure attracted to the area, leakage of GVA (which is estimated on a workplace basis) will be minimal.

Multiplier effects, which are not widely understood or applied in a systematic way in studies of rural tourism, to satisfy the need to understand the impact of additional demand associated with visitors, where firms will need to procure additional inputs. To the extent that

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these are procured from other firms based in the area concerned, this will generate further spin-off benefits in terms of additional sales, GVA and potentially employment.

Stakeholders suggested a need to use intelligence to develop a set of recommended actions for local stakeholders – to minimise the negative and maximise the positive impacts (i.e. a ‘How To’ guide). In the New Forest, where this approach is already bringing benefits, this has included encouraging tourism enterprises to make local purchases and recruit local staff wherever possible.

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Annexes

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Annex 1 List of Stakeholder Consultees

Name Role and Organisation

Annette Cole Research & Development Lead, South West Tourism

Anthony Climpson Employment and Tourism Manager, New Forest District Council

Professor Bill Slee Science Group Leader, Socio-Economics Group, Macaulay Institute

Professor David Roger Vaughan Head of Post Graduate Research Courses, The School of Services Management, Bournemouth University

Dawn Hall Tourism Advisor, SWRDA

Lyndsey Swift Partners for England Manager, VisitEngland

Richard Greenwood Development Director, Cumbria Tourism

Roger Turner Head of Rural Economies, CRC

Sean White Tourism Intelligence Unit, ONS

Sharon Orrell Head of Research and Intelligence, VisitEngland

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Annex 2 Availability of Data to Measure Impact

Denis Allnutt's 2004 National Statistics Quality Review of tourism identified a number of areas needing action to improve tourism statistics. With funding from the Regional Development Agencies in England, Visit Britain and ONS, the Tourism Intelligence Unit (TIU) was set up within ONS in 2008. The unit is currently working on a range of projects aimed at improving tourism statistics, especially those that relate to the tourism industry, the visitor economy and the economic impact of tourism. Similarly, VisitEngland – having been launched in April 2009 – is currently undertaking a programme of work to provide key stakeholders with intelligence on visitors and the industry to support strategy development. Having consulted with both bodies to take as full an account of work in progress as possible, this Annex presents an overview of the research and data currently available:

Supply Side There are two key surveys providing information on the range of goods and services provided by the tourism sector:

The England Occupancy Survey (EOS) At present, the main source of occupancy data in the UK comes from the UK Occupancy Survey. This aims to monitor the monthly bed and room occupancy for the serviced and non-serviced accommodation industries. It is commissioned by the National Tourist Boards of England, Northern Ireland and Scotland and by Visit Wales and supported by DCMS. The types of accommodation included are those defined by the EU directive as tourism statistics relating to accommodation, ones which are arranged in rooms and have bed-making and cleaning services provided. However, with the exception of Northern Ireland, the establishment defines which type of accommodation it is (e.g., hotel, motel, guest house, bed and breakfast). This may lead to definitional issues. EOS analyses are published monthly and include a regional breakdown between England, Northern Ireland, Scotland and Wales. A key dimension in assessing the performance of the tourism sector at a more local level is ongoing measurement of accommodation occupancy levels. This activity is important for a number of reasons:

▪ The data is needed for broader occupancy surveys to establish regional and national levels of occupancy

▪ Individual destination accommodation occupancy levels help to establish the appeal and attractiveness of a destination at a given time and provide a baseline against which improvement can be measured

▪ Comparison with other similar destinations’ occupancy levels can identify whether a particular destination is over- or underperforming against regional/national trends

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Registration of accommodation is not compulsory in England, Scotland and Wales, hence Destination Management Partnerships are encouraged to undertake an analysis of accommodation at the local authority level. ONS are in the process of developing guidance for local authorities and DMPs on this issue to establish a consistent ‘bottom up’ approach to data collection across the various aspects of data relating to the tourism sector at the local level. Survey of Visits to Visitor Attractions (SVVA) and England Attractions Monitor (EAM) SVVA is a self completion survey, established to monitor trends in the visitor attraction sector in England and to improve understanding of the dynamics of the sector. As with UKOS, SVVA depends on the successful recruitment of tourism enterprises to participate in the survey. Sample size is an issue with SVVA, with a number of regions and local destinations putting alternative arrangements in place in to collect this information. In January 2006, VisitBritain commissioned the England Attractions Monitor, an online panel to help provide the attractions industry with rapid feedback on current trends in visits to attractions in England. Following a successful first year, the survey was enhanced in 2007 to incorporate not only recent visit trends but also questions relating to business confidence for the forthcoming quarter. Several national datasets also provide additional intelligence on the characteristics and performance of the tourism sector:

Annual Business Inquiry (ABI) Data on tourism-related employment is provided by the Annual Business Inquiry (ABI). ABI estimates cover all UK businesses registered for Value Added Tax (VAT) and/or Pay as you Earn (PAYE), classified to the 1992 or 2003 Standard Industrial Classification headings (The Tourism Company, 2008). The system of SIC classifications is periodically updated, the most recent being 2007. The ABI is collected in two parts: ABI(1) is an employment record, collected as soon as possible after 12th December. ABI(2) is financial information, which may be submitted up to twelve months after the financial year end. Major variables collected: employment, turnover/output, capital expenditure, intermediate consumption, gross value added (derived), postcodes, industrial classification, owner nationality, acquisitions and disposals of capital goods. These are released at the 3 digit level and, where available, at the 4 digit level. The TIU is currently analysing a version of the ABI converted to SIC 2007 codes to allow the production of figures for GVA, turnover and employment for tourism referring to the UNWTO definitions set out in the International Recommendations on Tourism Statistics (IRTS, 2008).

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By 2010 ABI(1) and ABI(2) will be combined into one and unified also with the BRS (Business Register Survey) in a new survey called the BRES (Business Register Employment Survey).

Labour Force Survey The major source of household survey data used to analyse employment in the tourism industries is the ONS Labour Force Survey. The TIU within ONS are currently analysing this dataset in relation to a set of up to date SOC codes for the tourism sector drawing on international recommendations which will be forthcoming shortly.

Demand Side There are four key national data surveys that provide intelligence on visitor trends:

International Passenger Survey (IPS) The International Passenger Survey is a sample survey carried out by ONS. Data is collected from travellers leaving and entering the UK, through face to face interviews with a sample of passengers travelling via the principal airports, sea routes and the Channel Tunnel. The data collected includes, country of visit (for UK residents), country of residence and region of the UK visited (for overseas residents), expenditure, purpose of visit, length of stay, age group, gender, mode of transport, port, year and quarter of visit. The survey operates continuously with results published monthly, quarterly and annually. Although limited headline data is presented at a county level, sample sizes are generally too small for sub regional use. However, the VisitBritain website provides pivot-tables through which a range of variables can be interrogated at a regional level, with a warning if the sample size becomes too low. Expenditure data is routinely collected from departing overseas visitors, but it is not broken down by category.

United Kingdom Tourism Survey (UKTS) The United Kingdom Tourism Survey is a national consumer survey measuring the volume and value of tourism trips taken by residents of the United Kingdom. The survey covers trips away from home lasting one night or more taken by UK residents for the purpose of holidays, visits to friends and relatives, business and conferences or any other purpose. Tourism is measured in terms of volume (trips taken, nights away) and value (expenditure on trips). UKTS is designed as a national survey and described as reliable at an English regional level for top line information only. VisitBritain have recently published a regional analysis of UKTS data on their website, accompanied by a caution about the effects of small sample size. There is a widespread feeling that larger samples are needed to enable robust county level breakdowns. County figures, which form an important

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input to the Cambridge and other models, are reported by current users to be very unstable.

UK Leisure Day Visits Survey (ELVS) The England Leisure Visits Survey 2005 is the most recent of a loose series of day visits surveys which date back to 1994, collecting data on the volume and value of leisure visits to England and the regions. Originally planned to be biennial, the survey was led and coordinated by the Countryside Agency (now Natural England). Separate results are reported as respondent-based or trip-based. Results also distinguish between Leisure Visits and Tourism Visits, a subset of all Leisure Visits based on tourism visits being defined as lasting three hours or more and not taken on a regular basis. Destinations visited are grouped into four main types of destination: inland towns/cities, seaside towns/cities, the countryside, and the seaside coast; three types of subsidiary destination: woods and forests, inland waters with boats and inland waters without boats; and also two further destination types: whether a trip was to a National Park or open access land. Despite substantial improvements made to the methodology for the English Leisure Visits Survey, lack of confidence in its findings is widespread. Dissatisfaction is compounded by the lack of continuity in the survey series. Visit England is currently developing a new, reliable survey to measure day visitor activity.

Monitor of Engagement with the Natural Environment (MENE) Natural England have recently commissioned a new survey called Monitor of Engagement with the Natural Environment (MENE) to provide baseline and trend data on how people use the natural environment. This includes the type of destination, the duration of the visit, mode of transport, distance travelled, spend, main activities and motivations for the visit. It also collects data on people that do not visit the natural environment, and the reasons for this. The first annual report presenting headline findings for 2009-10 is now available online.

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Annex 3 Measurement of Local Economic Impact

In order to obtain an estimate of the economic benefits accruing to a local area through tourism, it is necessary to analyse the level of visitor spending and the impacts of that spending on the host economy. The impact of visitor spending include: ▪ Direct impact: analysis of the proportions of the turnover which are

allocated as income to owners and employees, and the relationship between turnover and employment. Income throughout the analysis is income remaining after deductions i.e. less income tax and National Insurance contributions.

▪ Indirect impact: a measure of the inter-industry impacts of visitor spending. It calculates the income and employment generated as a result of purchases from suppliers by tourism businesses, and the subsequent purchases by suppliers from other suppliers.

▪ Induced impact: the impact on incomes and jobs of the spending of income earned as a result of spending by tourists (i.e. household expenditure).

National sample sizes for the surveys described in Section 3.1 are typically too small to measure volume and value of tourism (and subsequently economic impact) at sub-regional and local levels. There are principally three ways to measure the impact of tourism at more localised levels:

Models

The use of economic models is common across England, though there is significant variation area to area in terms of geographical coverage and the choice of model adopted. Various models exist as commercially available products, with the two in most common use being the Cambridge Model and Scarborough Tourism Economic Activity Monitor (STEAM). Although all models share broadly the same purpose, each employs a different process and requires the input of differing sets of data.56 As with all modelled data, outputs are reliable ‘within acceptable confidence levels’. They are not designed to provide a precise and accurate measurement of tourism in a local area, but rather to provide an indicative base for monitoring trends. Often characterised as either ‘bottom-up’ or ‘top-down’, data is derived from published sources and in others from bespoke surveys and from databanks built up through previous experience of running the models. In this way, each of the models is sensitive to the quality of data produced at all geographic levels.

56 VisitEngland (2008), The Scope and Utilisation of Tourism Statistics for England: An Initial Assessment (The Tourism Company), August 2008

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The internal workings of the models also depend on applying coefficients which may or may not be derived from publicly available data. Where the source of a coefficient is acknowledged and is drawn from published data, the transparency of the model is increased. Where the reliability of published data is in doubt, models may revert to using unpublished coefficients which reduce their transparency. Almost all local authorities run economic impact models, though there is significant geographical variation due to the diverse range of contractors/methodologies available.

Tourism Satellite Accounts

Tourism Satellite Accounts (TSAs) use the basic framework of the national accounts, and modify it to bring out those features of tourism that are inadequately covered or not covered at all in the national accounts. The TIU is pursuing a programme of works to facilitate the ‘mainstreaming’ of TSAs to track the economic impacts of tourism, though attempts to date have been dogged by deficiencies in data availability and institutional structures. The situation worsens when trying to move towards creating a regional TSA, as input-output tables are not sufficiently developed at this level and current regional accounts are not fit for this particular purpose (allied to problems in demand side data at the regional level). The work of the TIU, including a number of activities seeking specifically to address institutional / structural issues and improve data quality, should address some of these issues particularly in relation to supply side and demand side information development.57

Primary Research

This might comprise: ▪ a visitor survey to determine the level of visitor spending and the

distribution of that spending between different business types; ▪ a business survey – for those receiving direct benefit from tourists and

their suppliers - to determine the allocation of business turnover between different expenditures i.e. inputs, rent, taxation and income to owners and employees; and,

▪ a household survey to map patterns of expenditure across a range of goods and services.

If resourced adequately, high quality data may be gathered to facilitate the development of a detailed understanding of local economic impact. This approach is, however, resource intensive and therefore often cost prohibitive. As stated earlier, the collection and use of tourism statistics at a local level is variable. Stakeholders suggested this was due to the following factors ▪ It is not a government requirement that local authorities report on tourism.

Tourism is not included in the recently reviewed list of 198 indicators that local authorities are required to use.

57 Tourism Intelligence Unit (2008), Workstream 4: A Review of the Status of Tourism Satellite Accounts - INTERIM REPORT (FIRST DRAFT), NOVEMBER 2008

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▪ However, all counties and unitary authorities are expected to have a local economic assessment completed soon after 2010.The visitor economy is central to supporting employment, investment and skills development in all localities, hence local authorities will have to find ways to capture its contribution to as to appropriately reference it in future economic planning processes.

The Existing Evidence Base

Tables A4.1 summarise the range of economic data available to map the tourism sector and measure its performance:


Table A3.1 Economic Indicators

Source Availability of Data at Local Level

Availability of Data for Rural Areas

Commentary

Core Indicators

Number of staying visitors (domestic and inbound)

Currently collected through UKTS and IPS.

Available at NUTS2 from IPS, and can be constructed at that level based on 3 year averages from the UKTS.

Some disaggregation necessary to collate LA level figures, though some concerns with data quality at this level.

UKTS: split by type of location - city/large town, small town, country/village and seaside.

IPS: not available

Local data unavailable– requires local data collection.

Expenditure of staying visitors (domestic and inbound)

Only total expenditure reported through UKTS and IPS.


Some disaggregation necessary to collate LA level figures, though some concerns with data quality at this level.


IPS: not available


Breakdown by category seen as desirable.

Number of day visitors (domestic and inbound)

Domestic last collected in 2005 within ELVS – work is underway within ONS to establish a new day visits survey.

Inbound reported through IPS.

Domestic regional breakdowns would be provided within any new survey.

Available at NUTS2 from IPS.

New domestic day visitors survey: unknown

IPS: not available


Expenditure of day visitors Domestic last collected in 2005 within ELVS – work is

Domestic regional breakdowns would be

New domestic day visitors Local data unavailable –

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(domestic and inbound) underway within ONS to establish a new day visits survey.

Inbound reported through IPS.

provided within any new survey.

Available at NUTS2 from IPS.

survey: unknown

IPS: not available

requires local data collection.

Occupancy levels –serviced and unserviced accommodation

Collected through the UK Occupancy Survey (monthly).

Only national and regional figures available.

Not available Local data unavailable – requires local data collection.

No. of bed spaces available in total and as a ratio of beds per head of residential population

Collected through the UK Occupancy Survey (monthly).

Only national and regional figures available.

Not available Local data unavailable – requires local data collection.

No. of jobs in tourism (FTE) LFS and ABI1 LFS data available for LA level.

ABI data available at Lower SOA level.

LFS: may be assigned using Defra’s Urban-Rural classification

ABI: may be assigned using the ONS rural and urban definition

Turnover of tourism industries

ABI2 Data is available to NUTS 4 (districts/unitary authorities) level from ONS on request.

May be assigned using Defra’s Urban-Rural classification

Business Structures Database may be queried by postcode on a bespoke basis (by Approved Researchers only).

GVA of tourism industries ABI2 Data is available to NUTS 4 (districts/unitary authorities) level from ONS on request.



Aspirational Indicators

No. of tourism businesses LFS and ABI1 LFS data available for LA LFS: may be assigned using Business Structures

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level.

ABI data available at Lower SOA level.

Defra’s Urban-Rural classification

ABI: may be assigned using the ONS rural and urban definition

Database may be queried by postcode on a bespoke basis (by Approved Researchers only).

No. of new businesses /

No. of exit businesses

ONS Business Demography Data is available to NUTS 4 (districts/unitary authorities) level from ONS on request.



Audit of accommodation stock (by category):

- No. rooms available

- No. rooms occupied

- Average room rate

Local data unavailable – requires local data collection.

Attractions:

- No. of visitors

- Total sales revenues

- Av ticket price

- Av total visitor spend

Collected through the Survey of Visits to Visitor Attractions and England Attractions Monitor.

Measure/monitor of online booking activity


Staying with Friends and Family (SFR)

Currently collected through UKTS and IPS.


Some disaggregation necessary to collate LA level figures, though some


IPS: not available


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concerns with data quality at this level.

Farm businesses (with tourist activity)


Business tourism (MICE): meetings, incentives, conferences and exhibitions (day visitors and overnight)


Monitoring of the economic impact of events



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