Business Plan 2012–2013: Visit Britain pptx

This year Britain will host the London 2012 Olympic and Paralympic Games, the London 2012 Festival and a whole host of other one-off cultural and sporting events, as well as celebrate th

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Business Plan

2012–2013

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Contents

Executive Summary 3

1 Our Business 4

2 The Context 7

Industry size 7

Britain’s image and competitive position 7

Priority inbound markets 7

VisitBritain’s contribution 8

Government priorities 9

Tourism landscape 9

Economic conditions 9

Access 10

Geopolitics 11

2012: the challenge and the opportunity 11

3 Our Activity 12

1 Inspiring travellers from overseas to visit and explore Britain 12

2 Delivering a global network to support tourism promotion overseas 14

3 Advise Government and industry on tourism – particularly on issues that affect our global competitiveness 15

4 Maximising public investment through partner engagement and commercial activity 16

Managing our business 18

4 Key Measures 19

5 Financial Information 22

Risk management 22

Summary income and expenditure budget 23

Appendix 24

Significant assumptions 24

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Executive Summary

2012 is set to be a big year for Britain, a big year for DCMS and so a big year for VisitBritain This year Britain will host the London 2012 Olympic and Paralympic Games, the London 2012 Festival and a whole host of other one-off cultural and sporting events, as well as celebrate the Queen’s Diamond Jubilee This is Britain’s moment and the eyes of the world will be on us

Tourism is key to the Government’s plans to stimulate economic growth, create jobs and rebalance Britain’s economy VisitBritain’s value rests on our ability to sell Britain effectively overseas We secure partnerships which double the Government’s investment and extend our reach to bring in more

international visitors who spend money here which delivers that growth and jobs

In 2011 Britain had its best year for a long time in terms of visitor spend - indeed we welcomed a record number of nearly 12 million holiday visitors - and our forecast for 2012 suggests that this will hold level - with 30.7 million overseas visitor arrivals expected in 2012, spending £17.6 billion Maintaining current visitor levels would be a good outcome in a year that is proving difficult to predict due to the current global economic climate and the impact this may have in many of our key markets, our competitiveness and value against other destinations, and of course the impact that the hosting of the 2012 Games may have on the displacement of visitors

VisitBritain has a crucial part to play, and we will be judged on our results – what we deliver for Britain and the tourism industry, how well we leverage the Games-time opportunities and how we are valued

by our stakeholders

Our key priorities for the year are:

 The continued roll out of the GREAT Britain marketing programme, with an image campaign in key global cities, and a tactical campaign to encourage people to travel now

 Securing and maintaining strong partnerships with businesses and organisations that extend our penetration and reach and promote Britain

 Maintaining the financial contribution that retail makes to the funds of VisitBritain

 The showcasing of Britain around the Games to ensure positive coverage in the world’s media

 Continuing to research and provide analysis on Britain’s competitive position in all our markets Working in partnership with the industry, by the end of 2012-13, we aim to improve Britain’s global position as one of the world’s top destinations, generating media coverage with an advertising

equivalent value of £400 million We will also plan to produce a set of market strategies which identifies the barriers to increasing competitiveness, and a range of solutions involving VisitBritain and other stakeholders Overall, in 2012/13 we aim to deliver £375 million in visitor spend to help generate jobs and rebuild the British economy

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1 Our Business

VisitBritain is the national tourism agency, responsible for marketing Britain

worldwide and developing Britain’s visitor economy

A non-departmental public body, funded by the Department for Culture,

Media and Sport (DCMS), we work with partners in the UK and overseas to

ensure that Britain is marketed in an inspirational and relevant way around

the world Our partners include government agencies, such as UKTI, FCO

and British Council, airlines and operators, global brands such as Samsung

and the English Premier League, as well as the official tourism bodies for

London, England, Scotland and Wales

2012 is set to be a big year for Britain, a big year for DCMS and so a big

year for VisitBritain too This year Britain will host the London 2012 Olympic

and Paralympic Games as well as a whole host of other cultural and sporting

events and celebrate the Queen’s Diamond Jubilee

Our key priorities for the year are:

 The continued roll out of the GREAT Britain marketing programme,

with an image campaign in key global cities, and a tactical campaign

to encourage people to travel now

 Securing and maintaining strong partnerships with businesses and

organisations that extend our penetration and reach, and promote

Britain

 Maintaining the financial contribution that retail makes to the funds of

VisitBritain

 The showcasing of Britain around the Games to ensure positive

coverage in the world’s media

 Continuing to research and provide analysis on Britain’s competitive

position in all our markets

Our mission: to build the value of tourism to Britain,

working in partnership with the industry and nations and

regions to generate additional visitor spend

Our vision:

To inspire the world to explore Britain

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Our consumer, trade and media websites reach a global audience, and

we have a staffed presence in 21 overseas markets – those that offer

the best immediate return and best future prospects for Britain

Collectively, these markets account for around 70% of inbound tourism

spend

We use a range of traditional and innovative marketing approaches including

brand and tactical advertising, digital and social media, press and PR activity

and working with travel trade intermediaries

We also have a statutory advisory role, providing analysis and advice on

tourism, in particular, the opportunities for, and the barriers to inbound

tourism growth In addition, we provide research, market intelligence and

analysis to inform Government and the British tourism industry

Our Priority Markets

Americas

USA, Canada, Brazil

Europe

Austria, Belgium, Denmark, France, Germany, Italy, Netherlands, Norway, Poland, Russia, Spain, Sweden, Switzerland

Asia Pacific, Middle East & Africa

Australia, China, India Japan, UAE

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Our four-point strategy aims to increase overseas visitor spend to all parts of Britain and improve Britain’s ranking on the destination wish-list for international travellers

Our strategy

We will support the growth of Britain’s visitor economy in four key ways:

1 Inspire travellers from overseas to visit and explore Britain

2 Deliver a global network to support tourism promotion overseas

3 Advise Government and the industry on tourism, particularly on issues that affect our global

competitiveness

4 Maximise public investment through partner engagement and commercial activity

What we are working to achieve by the end of 2015

- £1 billion in PR coverage

- 4.7 million visitors from overseas

- £2.3 billion visitor spend

- Around 60,000 new job opportunities

- A measurable increase in positive perceptions of Britain and aspiration to visit

- Partner support for our activities worth £52.5 million in cash and in kind

- Recognition from Government that tourism is delivering on its economic growth agenda

- A series of market strategies which identify the competitive challenges facing Britain, and their solutions, adopted by Government and industry as a blueprint for the development of international tourism to Britain

Britain’s image and competitive position

The United Kingdom is a strong nation brand, ranking 3rd out of 50 countries2 Research consistently shows that Britain’s key strengths are its heritage, culture, education, sport and London It is weaker on welcome (12th), natural beauty (22nd) and value for money3

In 2010, we occupied sixth place in the international tourist arrivals league table and seventh place in terms of earnings from international tourism4 Germany and Turkey are now close on our heels when it comes to arrivals and Australia is not far behind us in receipts

These figures serve to illustrate just how competitive the global tourism industry is We know we have stiff competition, not only in the form of traditionally popular destinations but from a growing number of emerging markets China, for example, is now in the top three most visited countries If first-time travellers from Asia, India, the Middle East and Latin America are to be attracted, we must do everything we can to make Britain

an aspirational, welcoming and accessible destination in their eyes

The 2011 World Economic Forum ‘Competitiveness Index’ ranked us seventh out of more than 130 worldwide destinations We are listed third in the world for ‘human, cultural and natural assets’, as well as for ‘access’,

11th for ‘business environment and infrastructure’ and 21st for ‘regulatory framework’5 However, for ‘price competitiveness’ the UK is ranked 135th out of 139 countries’

Priority inbound markets

In 2010, our Market Investment Model (MIM), developed with Oxford Economics, helped us identify the best prospects for tourism to Britain Our focus is on 21 priority markets - those that offer the best immediate return and best future prospects for Britain Together they account for approximately 70% of inbound tourism spend

1Deloitte: The economic case for the visitor economy, September 2008

2Anholt GFK Nations Brand Index 2011

3Anholt GFK Nations Brand Index 2011

4UNWTO

5WEF Competitiveness Index

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6International Passenger Survey 2010 (shown in order of importance in terms of spend)

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Government priorities

The Government Tourism Policy, published in March 2011, has three main objectives:

 To fund the most ambitious marketing campaign ever to attract visitors to the UK in the years following

2012

 To increase the proportion of UK residents holidaying in the UK

 To increase the productivity of the tourism sector, making us one of the world’s top five most efficient and competitive visitor economies in the world

The successful delivery of this marketing programme is our primary focus and we have maintained a

streamlined advisory function, providing advice to Government on issues which affect the UK’s international competitiveness

In November 2011, the Secretary of State confirmed that we would receive additional funds to help promote Britain in key overseas markets in 2012 The money is part of the 'GREAT' initiative launched by the Prime Minister in September to show the world that Britain is a great place to visit, to live, to invest and to do

business with Up to £39 million will be invested in this campaign which is a collective effort with UKTI, British Council and FCO who are all using the GREAT creative VisitBritain’s allocation is £22.5 million

Tourism is key to the Government’s plans to stimulate economic growth, create jobs and rebalance Britain’s economy VisitBritain’s value rests on its ability to sell Britain effectively overseas, to bring in more

international visitors who spend money here that delivers that growth and jobs We have a crucial part to play and will be judged on our results – what we deliver for Britain and the tourism industry, how well we leverage the Games-time opportunities and how we are valued by our stakeholders

Tourism landscape

Tourism structures across England continue to evolve and develop VisitEngland has secured additional funding from the Government’s Regional Growth Fund This funding will ensure that the England domestic campaign will be amplified at a local level and will support destinations all over the country to grow tourism in their areas and create jobs

London & Partners, the official promotional organisation for London, has been formed with the purpose of attracting and delivering value to businesses, students and visitors

Tourism is a devolved matter and Visit Scotland, and Visit Wales remain the responsibility of their respective governments, and work closely overseas with VisitBritain

Exchange rates play a pivotal role in how competitive a destination is in attracting visitors and Britain has enjoyed a favourable rate against most leading currencies over recent years, indeed for visitors from Australia sterling is more affordable than at any time over the past quarter century

Were Greece, or any other member, to be forced to exit membership of the single currency zone there may

be hefty shifts in relative sterling/euro exchange rates

Currently the central forecast for the price of oil during 2012 is $110 per barrel, but again if the Eurozone and North American economies do return to recession, it is likely that prices would fall unless demand was replaced by growth in Asia Pacific

A further economic risk in 2012 is that there will be on-going industrial action across Europe impacting on transportation, with this risk extending to the UK in light of pressure on wage settlements and job security, especially within the public sector

While there are some concerns over the Chinese property market and an expected slowing in the rate of economic expansion in Brazil, a number of developing economies continue to enjoy strong economic growth, thereby increasing the numbers able to travel internationally

Access

There are the usual changes to route networks being announced for 2012, but with little space for increased capacity in the south east of England (most notably at Heathrow) possibilities for expansion are limited, although the increased use of Airbus A380s should allow for some growth in passenger numbers One notable development in 2012 will be the advent of a substantial presence at Southend Airport by easyJet

A few plans worth noting are increased capacity between the UK and USA thanks to additional flights

operated by British Airways from both New York and Miami, the UK and Moscow and Shanghai courtesy of British Airways deploying larger planes on the route and UK and China with China Airways starting flights into Gatwick and China Southern Airlines from Guangzhou to Heathrow

Air Passenger Duty increased by 8% in early 2012, while the EU Emissions Trading Scheme started in January 2012 - both likely to mean increasing fares for passengers

Visitors to Britain from some markets require a visa in order to visit These include key markets for future growth, such as Russia, India, China and the United Arab Emirates The visa application process, rather than the price, is more often the determining factor This reduces the desire in visa markets to visit Britain, and perpetuates the idea that Britain is an unwelcoming destination

2012: the challenge and the opportunity

Every year has its unknowns, but those for 2012 are more extensive than usual Supply and demand are never entirely in equilibrium, but in summer 2012 supply, most acutely in terms of hotel accommodation in London, will be disrupted due to a significant percentage of the bed stock being held by LOCOG The phased release of unrequired rooms back onto the market may result in the normal lead time for booking trips to Britain being atypical, with those with tickets for Games events booking very early and those ‘casual’ visitors either booking late (once room rates fully reflect ‘actual’ demand) or alternatively postponing a potential trip to

a later date

The Queen’s Diamond Jubilee and the London 2012 Olympic and Paralympic Games are two big moments for Britain - an opportunity to raise our profile globally and present an attractive image of the country But we also need to reassure potential visitors that these big events are not reasons to stay away – quite the

contrary, they are invited

We anticipate that the numbers of visits expected in 2012 will remain at the same level as that of 2011 This would see 30.7 million overseas visitor arrivals in 2012, spending £17.6 billion While these figures are in line with expected numbers in 2011, maintaining current visitor levels - actually a record number of holiday visitors

- would be a good outcome in a year that is proving difficult to predict

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3 Our Activity

1 Inspiring travellers from overseas to visit and explore Britain

In 2012/13, VisitBritain enters into the second year of our four-year, £100 million public/private sector

marketing programme to capitalise on the once-in-a-lifetime opportunity of the events taking place in 2012 - including the Queen’s Diamond Jubilee, London 2012 Festival and the London 2012 Olympic and Paralympic Games in 2012 The programme has three simple objectives:

 Build awareness of our attractiveness as a tourism destination amongst those who have not yet visited Britain

 Encourage prior visitors to return

 Provide a series of opportunities and incentives to visit Britain now, working in partnership with the private sector

The campaign proposition is simple, compelling and versatile – “GREAT Britain – You’re Invited” and is a major part of a broader Government initiative to show the world that Britain is a great place to visit, to live, to invest and to do business with

In the second year of the programme (2012/13), the allocation of marketing funds (£11.2m GIA) will be used

to ensure even more effective tactical marketing – taking on board learnings from the first year We will focus our investment on those markets which offer the best immediate return and best future prospects for Britain; provide an extensive PR programme for media during the key events of 2012, build on our social media capability as well as digital offering and ensure we capitalise on Britain’s high profile by activating an attractive post-Games programme from September 2012

Additional government funding (2011-13) for the GREAT Britain programme will also allow us to carry out an impactful, broader and deeper image campaign focusing on 14 key global cities, tightly integrated with other work carried out by the FCO, UKTI and British Council

The Britain brand proposition will remain unchanged, coupled with the showcasing of Britain’s core products - this will be achieved by using and amplifying the key triggers for travel to Britain which are pillars of the GREAT Britain campaign – culture, heritage, countryside, shopping, food, sport and music

Along with our advertising and PR programme, integrated digital activities will create, distribute and amplify content to inspire and motivate people to travel

Intermediaries (travel agents and tour operators) play a significant role in the decision making process of many international visitors, especially in the longer haul and BRIC markets and also in the area of special interest travel in more mature markets and we will continue to work with these valuable influencers

Key activity

Pre-Games - April-June 2012

 A tactical and image campaign in key markets

 Media visits and recces by major broadcasters

Games-time - June-September 2012

 Olympic Torch Relay (from mid-May): a combination of PR and social media activity around High Profile Torch bearers in iconic destinations in partnership with Torch presenting partner Samsung