Tourism Business Improvement Districts

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Learn more about Tourism Business Improvement Districts.

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  • Tourism Business Improvement Districts

    1. 1. Tourism Business Improvement Districts “ The UK has over a 100 Business Improvement Districts (BID’s), the USA over 1,000 – America has now taken this model further and created Tourism Business Improvement (TBID’s) – these sector based, self funded partnerships, based on the principles of BID’s are a real opportunity to stimulate growth locally” Visit England <ul><li>A discussion paper by Richard Spencer for NEHA </li></ul><ul><li>[email_address] </li></ul><ul><li>07708 488895 </li></ul>
    2. 2. The Public Sectors Trojan Horse? <ul><li>A discussion paper </li></ul><ul><li>By Richard Spencer & Peter Sloyan </li></ul><ul><li>JV Partners and advisors to the NEHA </li></ul><ul><li>[email_address] </li></ul><ul><li>07708 488895 </li></ul>
    3. 3. Landscape <ul><li>Coalition Govt say “The cupboard is bare” </li></ul><ul><li>Osborne says “Don’t even ask” </li></ul><ul><li>RDA money has gone </li></ul><ul><li>LA’s under pressure to prioritise </li></ul><ul><li>Regional Growth Fund rejection (VE + sector) </li></ul><ul><li>Govt doesn’t believe tourism jobs </li></ul><ul><li>Tourism policy paper (cars to cornflakes we don’t do your marketing – tourism should be the same) </li></ul><ul><li>Where else can money be found to fund tourism?????? </li></ul>
    4. 4. We already have BID’s Business Improvement Districts
    5. 5. “ A defined area within which businesses pay an additional tax or fee in order to fund improvements within the district’s boundaries” (Local Govt Act 2003) Street cleaning; security; capital improvements; streetscape investment; marketing Supplemental to existing provision
    6. 6. Now we are talking about TBID’s Tourism Business Improvement Districts “A stable source of funding for marketing efforts designed to increase occupancy and room rates for accommodation providers”
    7. 7. What does a TBID do? <ul><li>Increase/Grow tourism </li></ul><ul><li>Work programme determined by the businesses funding the TBID </li></ul>Who manages a TBID? How is a TBID funded? <ul><li>A new not for profit company or an existing organisation </li></ul><ul><li>Businesses forming the TBID decide how the company will be structured and who will manage it </li></ul><ul><li>A tax on bedrooms </li></ul><ul><li>Amount determined by businesses owners when TBID formed </li></ul><ul><li>% or fixed price </li></ul><ul><li>Funds are ring fenced for tourism </li></ul>
    8. 8. Why support a TBID? <ul><li>Provide stable funding to keep a destination competitive </li></ul><ul><li>Outside the body politic </li></ul>What are the advantages of a TBID? <ul><li>Stable funding </li></ul><ul><li>Designed and created by those paying </li></ul><ul><li>Governed by those paying </li></ul><ul><li>Ring fenced </li></ul>What are the disadvantages of a TBID? <ul><li>Cut off level of businesses for introduction </li></ul><ul><li>Substitution – regional/national </li></ul><ul><li>Competitiveness of room prices </li></ul>
    9. 9. Recent Signals <ul><li>Recent meeting between VE, Bristol, Birmingham, Cornwall and the Tourism Minister to “progress thinking on Tourism Business Improvement Districts </li></ul><ul><li>Govt Tourism policy paper: </li></ul><ul><li>“ But if support can’t be removed then there may be calls for a higher, permanent level of taxpayer funded marketing which would be both economically undesirable and politically fragile” </li></ul><ul><li>Visitor Economy Forum 1 st December, London </li></ul><ul><li>“ Bringing together England’s visitor economy stakeholders” </li></ul>
    10. 10. California Study
    11. 11. California Study
    12. 13. California Study
    13. 15. And yet… <ul><li>World Tourism Forum notes that UK 134 th of 139 countries for visitor taxes (high being worst!) </li></ul><ul><li>Of 27 EU countries UK is one of only three that charges the full rate of VAT on tourism accommodation </li></ul><ul><li>Deloitte working on a case with Govt for VAT reduction on accommodation & attractions </li></ul><ul><li>What can we learn from the US? </li></ul>
    14. 16. California Study <ul><li>“ In America TBIDs are reshaping the tourism industry’s standpoint on marketing funds” </li></ul><ul><li>40 TBID’s in California, more on the way </li></ul><ul><li>DMO’s paid by collection of Transient Occupancy Taxes (Room Taxes) levied on visitors staying at a local “lodging facility” </li></ul><ul><li>Tax collected by appropriate jurisdiction (e.g. City) and funds fed into a general fund </li></ul><ul><li>Room tax fund used to finance tourism promotion </li></ul><ul><li>“ The creation of TBID’s is having a huge impact on the tourism promotion landscape” </li></ul><ul><li>36 TBID’s contacted; 18 supplied info for study </li></ul>
    15. 17. California Study Results (36/18) <ul><li>TBIDs av operational time 5.4 years </li></ul><ul><li>Main reason for TBID formation was primary funding agency reducing their budgets </li></ul><ul><li>TBID took 6 to 12 months to form </li></ul><ul><li>16% admitted TBID funding settlement was over the original formation funding amount </li></ul><ul><li>94% indicated TBID funds increased destinations tourism promotion efforts </li></ul><ul><li>82% said TBID funds used for increasing new and existing visitors </li></ul><ul><li>59% introduced formal measurement programmes </li></ul>
    16. 18. California Study
    17. 19. California Study
    18. 20. California Study
    19. 21. California Study
    20. 22. California Study
    21. 23. California Study
    22. 24. California Study
    23. 25. California Study
    24. 26. California Study
    25. 27. California Study
    26. 28. California Study
    27. 29. California Study
    28. 30. Conclusion <ul><li>Are the funders of last resort (you!) part of the TBID conversation? </li></ul><ul><li>Do you have an agreed position on the principle of TBID’s? </li></ul><ul><li>How are you going to be heard? </li></ul><ul><li>Are you influencing the debate? </li></ul><ul><li>What are your terms? </li></ul><ul><li>Is the industry ready for this? </li></ul><ul><li>Who else should be part of the conversation? </li></ul><ul><li>Are you building your case? </li></ul><ul><li>Can you speak public sector? </li></ul>
    29. 31. Issues <ul><li>Will it require primary legislation? </li></ul><ul><li>Can existing legislation (BID) be used? </li></ul><ul><li>What will be the public sectors next move? </li></ul><ul><li>Classic momentum building strategy </li></ul><ul><li>Government coming under pressure </li></ul><ul><li>Ideologically they should be resisting </li></ul><ul><li>Together you stand stronger </li></ul><ul><li>Build a fighting fund </li></ul><ul><li>Time to plan a response now </li></ul><ul><li>We’d like to be involved in organising the resistance </li></ul>
    30. 32. Don’t let them T ax B usinesses I n D emand Or do….but on your own terms <ul><li>Richard Spencer/Peter Sloyan </li></ul><ul><li>JV Partners and advisors to the NEHA </li></ul><ul><li>[email_address] </li></ul><ul><li>[email_address] </li></ul><ul><li>07708 488895 </li></ul>

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