By John Henwood
IN the spring of 2016, I was coming to the end of four years of close involvement with the many and varied stakeholders in the tourism sector and at about that time the editor of this newspaper, who had helpfully published a series of articles I’d written on the history of tourism, asked me if I’d like to contribute more regularly.
This column marks a century. It is my one hundredth regular four-weekly article. Back then it was not surprising that I should have taken tourism as the subject for that first column and, as there have been a few changes since, I am taking the same topic today. What strikes me as having changed least over the past six years is the way everyone says they are very supportive of tourism, but there is very little action to back up the words.
In 2012, the States approved the Economic Growth & Diversity Strategy which said: ‘Existing sectors such as tourism have a key role in contributing towards the success of the Island.’ At that time tourism was in serious decline; in the preceding 15 years holidaymaker numbers had fallen by 40 per cent.
The Treasury Minister, Alan Maclean, recognised that something had to be done to improve matters and he invited me to form a group to review the situation and, under his terms of reference, to define the optimum operational and governance structure and to develop a strategy for a rigorous commercial approach. To make a long story short the review and recommendations of the Tourism Shadow Board led to Visit Jersey replacing the States’ Tourism Department.
It was not an easy process, with significant internal resistance to change, not only from within the Tourism Department. Having considered a number of models we recommended that Visit Jersey should be a grant-funded body; it would be a company controlled by an independent trust.
At the point of transfer of responsibility, the Tourism Department had a budget of £6 million a year, but that’s not the whole story. The rent in their smart glass tower at Liberty Place did not come out of tourism’s annual budget, it was separately funded by the Economic Development Department’s own budget, which also provided all the furniture, equipment and systems support, so the actual annual cost to the taxpayer was considerably north of the £6 million headline figure.
The transfer from States department to a commercial body was not made easy by the Treasury, which cheese-pared the numbers and Visit Jersey began operations with a budget a million pounds a year less than the Tourism Department. Despite this it had reversed the decline in visitor numbers within two years. It will continue to grow the tourism market if, and it’s an important if, it is given adequate resources.
It is a sobering, and frankly shocking, fact that Visit Jersey’s annual grant budget is the same now as it was seven years ago. In that time Jersey’s inflation has whittled away almost 30 percent of its value. Put another way, just to keep pace with inflation Visit Jersey’s current budget should be £6.5 million and it has saved over £7 million in taxpayers’ money since Jersey Tourism was wound up. Whichever way you look at it, we are getting much better value, yet so much more could be achieved.
The Economic strategy was all about diversifying the economy, recognising that too much reliance was placed on the continuing success of the finance industry. It emphasised that existing enterprises would continue to be supported if they demonstrated success. That hasn’t happened with tourism.
Today, the finance industry is still far and away the biggest part of the economy, but it is smaller than it was. Just over 20 years ago, the sector’s GVA in monetary terms was £3 billion, now it is a tad below £2 billion. If it hadn’t enjoyed government financial support to develop new markets it would be smaller still.
Because finance is so important to the Island that support is vital and the industry is smart enough to continue to change and develop to satisfy new market demands. However, there was a time when there were 70 banks here, now there are 20 and, though size isn’t everything and banking is no longer the most active part of a successful local industry, volume is important if we are to maintain credibility as one of the world’s leading financial centres.
The market for financial services is increasingly competitive and modern technology means that it is a transportable sector. I’m not a prophet of doom and there are good reasons to believe that finance will continue to be very important for some time, but there is too much complacency around our reliance on it and still not enough action on alternatives.
A banker will tell you it is very much cheaper to develop an existing customer than create a new one. So it is with economic activities: it’s very much more cost-effective to grow an existing activity than start a new one.
In tourism we have a sector that we not only understand, but have excelled at. Before the emergence of finance, it was by far our biggest earner and the reasons for that are as evident today as they were in its heyday.
But if much of world doesn’t know we exist and if people who have heard about Jersey can’t get here anyway, we will fail. So, we need to maintain a vigorous marketing strategy and support carriers, air and sea, to develop and maintain routes to us. And there’s a cost to that.
I believe the Minister for Economic Development, Tourism, Sport & Culture, Deputy Kirsten Morel, has taken a keen interest in tourism development which, bearing in mind the complexity of his portfolio, is encouraging, but when it comes to putting up the money to develop the sector in the way government did and is still doing for finance, there always seems to be a reason why money is not available when needed. This is surprising when money can apparently always be found for other ventures.
The message to government is simple: you claim to support tourism, so, put the money where your mouth is and give Visit Jersey adequate funding to capture a bigger share of the tourism market. Remember, tourism is one of the world’s biggest growth industries.
