Tourism Business Improvement Districts

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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 A discussion paper by Richard Spencer for NEHA [email protected] 07708 488895

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Page 1: Tourism Business Improvement Districts

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

A discussion paper by Richard Spencer for NEHA [email protected]

07708 488895

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The Public Sectors Trojan Horse?

A discussion paperBy Richard Spencer & Peter Sloyan JV Partners and advisors to the NEHA [email protected] 488895

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LandscapeLandscape

Coalition Govt say “The cupboard is bare”

Osborne says “Don’t even ask” RDA money has gone LA’s under pressure to prioritise Regional Growth Fund rejection (VE +

sector) Govt doesn’t believe tourism jobs Tourism policy paper (cars to

cornflakes we don’t do your marketing – tourism should be the same)

Where else can money be found to fund tourism??????

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We already have BID’sWe already have BID’sBusiness Improvement Business Improvement

DistrictsDistricts

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““A defined area within A defined area within which businesses pay an which businesses pay an additional tax or fee in additional tax or fee in

order to fund order to fund improvements within the improvements within the

district’s boundaries”district’s boundaries”(Local Govt Act 2003)(Local Govt Act 2003)

Street cleaning; security; capital improvements; streetscape investment; marketing

Supplemental to existing provision

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Now we are talking Now we are talking about TBID’sabout TBID’s

Tourism Business Tourism Business Improvement DistrictsImprovement Districts

“A stable source of funding for “A stable source of funding for marketing efforts designed to marketing efforts designed to increase occupancy and room increase occupancy and room

rates for accommodation rates for accommodation providers” providers”

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What does a TBID What does a TBID do?do?

Increase/Grow tourism Work programme determined by the businesses

funding the TBIDWho manages a Who manages a

TBID?TBID?

How is a TBID How is a TBID funded?funded?

A new not for profit company or an existing organisation Businesses forming the TBID decide how the company

will be structured and who will manage it

A tax on bedrooms Amount determined by businesses owners when TBID

formed % or fixed price Funds are ring fenced for tourism

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Why support a TBID?Why support a TBID? Provide stable funding to keep a destination

competitive Outside the body politicWhat are the advantages of a What are the advantages of a

TBID?TBID?Stable fundingDesigned and created by those payingGoverned by those payingRing fencedWhat are the disadvantages of a What are the disadvantages of a

TBID?TBID?Cut off level of businesses for introductionSubstitution – regional/nationalCompetitiveness of room prices

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Recent SignalsRecent SignalsRecent meeting between VE,

Bristol, Birmingham, Cornwall and the Tourism Minister to “progress thinking on Tourism Business Improvement Districts

Govt Tourism policy paper:“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”

Visitor Economy Forum 1st December, London

“Bringing together England’s visitor economy stakeholders”

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California StudyCalifornia Study

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California StudyCalifornia Study

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California StudyCalifornia Study

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And yet…And yet…World Tourism Forum notes that UK 134th of

139 countries for visitor taxes (high being worst!)

Of 27 EU countries UK is one of only three that charges the full rate of VAT on tourism accommodation

Deloitte working on a case with Govt for VAT reduction on accommodation & attractions

What can we learn from the US?

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California StudyCalifornia Study“In America TBIDs are reshaping the tourism

industry’s standpoint on marketing funds”40 TBID’s in California, more on the wayDMO’s paid by collection of Transient Occupancy

Taxes (Room Taxes) levied on visitors staying at a local “lodging facility”

Tax collected by appropriate jurisdiction (e.g. City) and funds fed into a general fund

Room tax fund used to finance tourism promotion“The creation of TBID’s is having a huge impact

on the tourism promotion landscape”36 TBID’s contacted; 18 supplied info for study

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California Study Results California Study Results (36/18)(36/18)

TBIDs av operational time 5.4 yearsMain reason for TBID formation was primary

funding agency reducing their budgetsTBID took 6 to 12 months to form16% admitted TBID funding settlement was over

the original formation funding amount94% indicated TBID funds increased destinations

tourism promotion efforts82% said TBID funds used for increasing new

and existing visitors59% introduced formal measurement

programmes

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ConclusionConclusion

Are the funders of last resort (you!) part of the TBID conversation?

Do you have an agreed position on the principle of TBID’s?

How are you going to be heard?Are you influencing the debate?What are your terms?Is the industry ready for this?Who else should be part of the conversation?Are you building your case?Can you speak public sector?

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IssuesIssuesWill it require primary legislation?Can existing legislation (BID) be used?What will be the public sectors next move?Classic momentum building strategyGovernment coming under pressureIdeologically they should be resistingTogether you stand strongerBuild a fighting fundTime to plan a response nowWe’d like to be involved in organising the

resistance

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Don’t let them

Tax Businesses In Demand

Or do….but on your own terms Richard Spencer/Peter Sloyan

JV Partners and advisors to the NEHA [email protected] [email protected] 07708 488895