Domestic tourism faces challenges from a recovering outbound sector, but there are still huge opportunities. Robin Searle reports from the Best of Britain and Ireland show at the NEC, Birmingham

UK breaks: Domestic sector ‘can keep pace with outbound growth’

Domestic and inbound tourism specialists remain optimistic about the potential for further growth in the sector – despite acknowledging that factors such as exchange rates, oil prices and wage inflation are likely to make outbound travel more attractive.

Speaking at a panel session hosted by Travel Weekly and sister magazine travelGBI at the Best of Britain & Ireland trade show, Shearings Holidays chief executive Denis Wormwell insisted: “I firmly believe it is the ‘here-to-staycation’ and mindsets have changed, full-stop.

“The share of the pie might be smaller [if more people take outbound holidays], but the overall pie is bigger.”

Jim Eccleston, director of travel and tourism at research company TNS, presented exclusive research during the session, which confirmed that a rising proportion of the British population was considering an international holiday in the next 12 months, with 36% saying they were ‘very likely’ to travel overseas.

However, he agreed with Wormwell that the findings didn’t mean “the end of the boom years for the domestic sector”, noting that 39% of respondents said they were ‘very likely’ to take a domestic holiday in the next 12 months – up from 35% in October 2014.

Bernard Donoghue, director of the Association of Leading Visitor Attractions (ALVA), said his members were on track to post a record year, with 123 million domestic and inbound visits to the association’s members last year.

He also backed Wormwell’s comments, insisting “the staycation isn’t over by a long chalk”.

Deirdre Wells, chief executive of UKinbound, said: “Just because outbound increases, it doesn’t mean domestic can’t increase. There is additionality going on.

“Those who went on a staycation in recent years and found the quality of experience was so much better than it was in the 1970s are now much more likely to retain that domestic break in their suite of holidays.”

Promotion: Highlight UK beyond capitals

Work still needs to be done to educate domestic and inbound tourists about the scope of product outside London.

Panellists said the trade had a role to play in showcasing options outside the traditional strongholds of London and Edinburgh.

Bernard Donoghue, of the ALVA, said: “Overseas visitors’ knowledge is pretty patchy, but we have to be honest and understand that our knowledge of our own country can be pretty patchy too.

“Ensuring the trade has the right tools, such as maps and accurate directions, is key. We need to be better at showcasing not only what we can offer, but also how easy it is to get there.”

Deirdre Wells, of UKinbound, said knowledge of domestic product was still “not as great as it should be”.

She added that there was a genuine opportunity to add leisure breaks to corporate travel itineraries.

“As the economy improves, being able to bolt a bit of leisure on for business travellers is a great option,” said Wells.

Challenges: ‘We must work bit harder’

Panellists acknowledged that agents and suppliers faced challenges promoting domestic holidays.

Speaking at a ‘Domestic Tourism: Past its Peak or on the Road to New Heights?’ session, Jim Eccleston, of TNS, said rising customer confidence meant more people were considering overseas options, and noted that higher disposable incomes, attractive exchange rates in the eurozone and a reduction in APD for children were also hindrances to the domestic sector.

But he said: “It doesn’t mean people won’t book domestic holidays. It just means everybody has to work that bit harder to get those bookings, as overseas holidays are back on people’s agendas.”

Denis Wormwell, from Shearings, said a stronger pound would affect sales. But he insisted: “I don’t think it will be significant. We are only getting back to a ‘normal’ position, so it’s not going to stop people holidaying in the UK.”

When asked to identify barriers to booking a UK holiday, respondents to the TNS survey identified weather uncertainty (25%), price (20%), better value overseas (7%) and a desire to explore farther afield (7%) as key factors.

Product: ‘Keep refreshing experiences’

Regularly updated product and content, and ensuring outstanding customer experiences, are fundamental to the ongoing success of the domestic sector, panellists agreed.

The ALVA’s Bernard Donoghue said the UK’s tourism product was “the envy of the world”, and called for all political parties to acknowledge the value of the sector.

He added: “Currency exchange can make a difference, but the real deal-breaker [for domestic and inbound visitors] is the perception of value. Constantly refreshing the experience is key to ensuring you retain existing customers and attract new ones.”

Denis Wormwell, of Shearings Holidays, said: “We’ve had sevenyears’ growth. Last year was a record for Shearings Group, with more than 1.1 million passengers.

“You need to keep reinventing the product, ensuring it is fresh and identifying what is needed to attract new people. Content is key.”

He added: “Single-night trips are a huge growth area, so we need the right product for those customers. There is no point trying to drive eight-night holidays down people’s throats if they want a short break.”

Deirdre Wells, of UKinbound, said tourism businesses needed to do more to work together.

“If people are heading to a particular place or attraction, they want to know what else to do while they are there,” she said.

Tourism: Politicians challenge Grant’s view

Tourism minister Helen Grant declared “tourism is essential” as she made one of her final appearances before an industry audience ahead of the general election.

Addressing the Best of Britain & Ireland show in Birmingham last week, the minister promised: “Tourism will figure very highly [in the Conservative manifesto].”

Grant added: “Tourism is a fantastic good news story. Britain saw record visitor numbers and record visitor spending in 2014, and we are likely to see that continue in 2015.”

But other politicians at the show challenged Grant’s view that the government ‘gets’ tourism.

Shadow transport minister Gordon Marsden, Labour MP for Blackpool South, said: “Tourism should be recognised across government as the huge income generator that it is. No minister of tourism will be able to make the progress they could unless that is recognised. That is the key issue.”

Marsden pointed out: “The Department for Culture, Media and Sport [DCMS] has fewer civil servants than other departments, but is expected to say more on different subjects than any department other than the Home Office.”

Liberal Democrat peer Lord Lee, a former tourism minister and chairman of the Association of Leading Visitor Attractions, said: “I would like to see tourism in the title of Helen Grant’s ministry. Tourism is the number-one industry in more constituencies than any other. That it is not included in the title of the DCMS is a mistake.

“The message has to come from the top. Scotland’s first minister, Nicola Sturgeon, gave the keynote address at the Scottish Tourism Week conference [this month]. I can’t remember when one of our three main political leaders – the prime minister, deputy prime minister or Labour leader – addressed a major travel industry event. Our national leaders need to beat the drum more.”

Fellow Liberal Democrat peer Lord Storey argued: “Tourism’s prominence needs to be dramatically increased. All the parties give it only a small paragraph in their manifestos.”

He insisted: “I don’t think that, as a nation, we get tourism. People say ‘you’re not creating real jobs’.”

Marsden agreed, saying: “We need recognition of the importance of tourism skills.

“Too many people think tourism is just something you pick up.”

Regions: Funding is spread ‘thinly’

Strains on funding for the regions are hampering efforts to get more inbound visitors to travel beyond London.

Tourism minister Helen Grant said: “We have visitors flooding to London, but we’re anxious they know we have other attractions. We want to do everything we can, so the rest of the country benefits.”

UKinbound chief executive Deirdre Wells told the minister: “My members are keen to take people out of London, but the key question is funding.”

Grant said: “We know some destinations are having a hard time. The problem is there are about 200 regions. In some parts, there are more destination management organisations [DMOs] than councils. Money is spread very thinly in some areas.”

She said the answer was “DMOs working in partnership”.

Grant said: “Those that collaborate will put themselves in a better position for the pots of money that exist.

“The regions need to get tourism. For me, it’s a no-brainer. I know what tourism can do for local areas.”

Shadow transport minister Gordon Marsden said: “Tourism organisations in an area need to work together.”

But he argued: “Tourism is not a statutory duty and local authorities have to make cuts. By the end of this parliament,

Blackpool will have had 40% of its core tourism spending cut. It’s difficult for local authorities, which are elected by local residents, not tourists.”