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Business roundtable: Talking about Manx tourism

Isle of Man Newspapers business roundtable tourism event  at the Claremont Hotel, Douglas. Below, from top, John Watt, Angela Byrne, Paul Ogden, Ged Power, Mark Wilson and Jane Dellar

Isle of Man Newspapers business roundtable tourism event at the Claremont Hotel, Douglas. Below, from top, John Watt, Angela Byrne, Paul Ogden, Ged Power, Mark Wilson and Jane Dellar

  • by John Sherrocks
 

An exciting new era is dawning for the Isle of Man’s tourism industry - one which promises ‘massive growth potential’ this decade, according to Angela Byrne.

The Department of Economic Development’s head of tourism is not alone in believing that the future is bright. All the other participants in the Roundtable discussion were equally optimistic that the efforts of the public and private sectors over the past few years have set the stage for tourism to fully capitalise on the island’s attractions.

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Around the table: Jane Dellar, chief executive, Chamber of Commerce Isle of Man; Angela Byrne, head of tourism, Department of Economic Development; Mark Wilson, managing director, Sleepwell Hotels; Ged Power, director, Isle of Man Golf Tours; John Watt, commercial director, Steam Packet Company; Paul Ogden, estate manager, Milntown

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Their optimism was, however, somewhat clouded by frustration at the widespread lack of recognition of the full extent of tourism’s true contribution to the Manx economy as well as the crucial part the industry plays in 
supporting the island’s quality of life and essential services such as sea and air links.

Those around the table voiced concern that unless tourism was rid of its Cinderella status, its full potential may not be realised.

Jane Dellar, chief executive of the Chamber of Commerce, Isle of Man, chaired the Roundtable discussion, which she kicked off by asking whether there was in fact a distorted and incomplete understanding of tourism’s economic benefits to the island, and if so, how it could be corrected.

Everyone around the table agreed that tourism was undervalued.

One of the main reasons for this is that tourism’s GDP (gross domestic production: the value of goods and services produced within a country) contribution was based on the income derived from accommodation alone. This measure did not take into account the vital support tourism lent to businesses as diverse as restaurants and the Steam Packet Company.

John Watt, commercial director of the Steam Packet Company, pointed out that visitors make up the bulk of its passenger numbers.

‘Tourism is essential for the island’s carriers - both air and sea. Without the volume of [visitor] passengers, the island simply wouldn’t be able to afford the level of frequency and investment that it enjoys with its sea and air services,’ Mr Watt told the Roundtable discussion.

Mark Wilson, managing director of Sleepwell Hotels, felt that the many locals also failed to appreciate the true value of tourism and hospitality to lifestyle and recreational options. He said that too many island residents were quick to underplay the island’s offering in terms of leisure and social activities. Tellingly, many of these self same critics failed to patronise this arena.

‘You hear residents complain that there are not enough things to do with their kids, there aren’t enough decent restaurants, there aren’t enough decent bars, there isn’t enough decent shopping, etc,’ he said.

Ironically, feedback from visitors showed that the overwhelming majority were very happy with what the island had to offer.

Mr Wilson noted that alone the Isle of Man’s population of 85,000 was not large enough to support the range of social and leisure facilities on offer. Without tourism, many of these businesses would either shrink or fold. Then the ‘Manx crabs’ would really have reason to moan. Conversely, if the island could attract more visitors the social and leisure offering would be strengthened.

Paul Ogden, estate manager for the Milntown Trust, agreed. ‘Many people who live here don’t appreciate the amount that there is for them to do. For a population of 85,000 the number of different things that are on offer is fantastic.

‘There’s a scepticism that is fed through to the politicians. But if we can’t sell to ourselves what a fantastic place the island is, is it any wonder we’re not selling it as well as we could to the outside world.’

Mrs Byrne said that island residents could play a key role in growing the tourism industry by encouraging friends and family in the UK, Ireland and further afield to visit.

Ged Power, director of Isle of Man Golf Tours, concurred. ‘I think the public will engage if they can be made aware of the overall benefits of tourism to everyone on the island . . . we’ve got 85,000 potential sales people, most of whom have access to a computer; they can email relatives and friends abroad, like things on Facebook, send [website] links far and wide,’ said Mr Power.

Also, he believed that highlighting the career opportunities in tourism would increase its relevance to the island’s population.

Mrs Byrne pointed out that visiting friends and relatives (VFR) make up a third of tourist numbers. The remainder is evenly split between people coming to the island on business and tourists without any links to the Isle of Man.

Ninety-three per cent of visitors to the island are from the UK. The majority of these are from the North West of England but the South East is a growing factor.

Mr Watt said that VFRs offered the greatest growth potential for the Steam Packet.

‘The VFR market is more important than it used to be - I think that’s partly because the growth in the finance sector over the last 20 years has meant that the island’s population has grown through inward migration, which in turn has increase the size of the VFR pool.

‘The bottom line for us is we have to grow our visitor passenger numbers to the Isle of Man. In due course, we will need to replace the Ben-My-Chree and the Manannin. Newer ships are going to cost £50m-£60m. The only way to cover that cost is by growing our passenger numbers. We are not realistically going to be able to grow our freight income or even resident travel that much, so we have to expand the visitor numbers.’

Officially, the tourism industry accounts for 2 per cent of GDP and 700 jobs. However, when viewed through the prism of GNI (gross national income: the sum of a nation’s gross domestic product plus net income received from overseas) tourism accounts for some 1,600 jobs.

Mrs Byrne said that work was being done within government to more determine the full extent of the industry’s contribution to the island’s economy.

She said that it was very difficult for the tourism division to justify an increase in its marketing budget when the industry was seen to account for 2 per cent of GDP. Excluding motor sport, the tourism division has an annual budget of £1.1 million. This is larger than the budget for the e-gaming sector which accounts for 8 per cent of GDP.

Nevertheless, Mrs Byrne said that other government divisions and departments were starting to gain a fuller appreciation of the significance of tourism to the island’s economy and quality of life.

‘The whole of government is starting to understand that tourism is not the poor relation, that without it we would struggle to persuade high net worth individuals and entrepreneurs to relocate to the island.’

She said that since tourism fell under the DED umbrella, there had been greater interaction between it and other divisions such as e-gaming and the aircraft registry.

‘With these divisions having VIPs over to the island they are starting to understand just how important the quality of our hotels, restaurants etc is to getting companies to relocate to the island. They are beginning to appreciate that without the input from tourism the island’s overall quality of life would suffer.’

Mrs Byrne said that visiting Chinese delegations have been very taken with the island’s railway networks.

Mr Wilson noted most of the money spent within the broader ambit of tourism remained on the island and the multiplier effect was considerable. ‘Take a hotel company such as ours for example, we buy from local suppliers who are paying VAT and employing local people who are paying taxes and buying locally.

‘Visitors who are staying at a hotel, take taxis, eat out, play golf, visit heritage sites - that’s all money that washes back through the economy.’

Mr Wilson said the surveys of visitors at the airport provided a figure in terms of ‘top-line revenue’ but did not reveal the multiplier effect of that money in terms of creating jobs, supporting farmers, etc.

Mrs Byrne added that the quality of a destination and the quality of life was closely interlinked. ‘One can’t survive without the other. If you take away the quality of the destination, the quality it sells, the attractions, then the quality of life disappears as well.’

Mr Watt added: ‘The economic benefit of tourism extend well beyond the pure accommodation sector. For example, we have 300 staff employed on the Isle of Man - all of them are spending money here, paying taxes. And there are many other industries on the island which supply the tourism industry . . . this contribution is not reflected in the GDP figure for tourism.’

He added that if theoretically speaking the Steam Packet’s market was the island’s population of 85,000 alone, financial pressures would eventually force cuts to services and staff by around 50 per cent.

Mr Watt said that ferry companies servicing the Orkney and Shetland islands received around £40 million a year of taxpayers’ subsidy. ‘In the western isles of Scotland the subsidy is even greater - something like £100 million a year. In the Isle of Man we are fortunate that the visitor traffic is sufficient that no public subsidy is needed.’

Ms Dellar estimated that 90 per cent of local businesses involved in tourism are owned by people who live on the island. ‘So the profits stay here,’ she said.

Mrs Byrne said that to appreciate the consequences of any erosion of the tourism industry one only needed ‘to work out the multiplier effect in reverse’.

Mr Ogden said the collapse of the island’s tourism industry in the 1970s should be borne in mind.

‘There is evidence within living memory of what happens when your visitor numbers really start to fall. Fortunately, visitor numbers have plateaued rather than fallen in recent years. But we, as an island, have to work at growing them,’ said Mr Ogden.

Mr Wilson said the fact that the government had stepped in to rescue the Sefton Hotel was evidence that some in government were aware of the importance of tourism to the wider economy.

He added: ‘Also, there was a spike in unemployment as a result of the fire at the Mount Murray. Imagine the impact if the industry as a whole got into difficulty.

‘There has been a lot of focus - and quite rightly so - on other industries such as egaming and the air registry. But we shouldn’t forget about little old tourism, because if you lose it we’re all going to regret it.’

Ms Dellar asked if it was the job of the private sector or government to nurture the tourism industry.

The consensus around the table was that it was a shared responsibility.

Mr Power pointed out that government - which is funded by taxes from individuals and businesses - had resources and expertise which were beyond the reach of many companies.

He noted that government representatives who had attended recent trade shows had emailed him business leads. ‘It’s very much a team effort - Team Isle of Man. The unified stance the public and private sector has adopted on the island works.’

Mr Watt said: ‘There has to be a role for both government and the private sector. At least in the Isle of Man we can all talk to one another and therefore help each other and work together - it is one of the great benefits of living in a small community.’

Mr Ogden was in agreement but felt that the government should be coordinating the effort, which he said was being very ably done by the DED’s tourism division.

He also felt that the government should, in the main, be covering the cost of marketing the Isle of Man as a destination. He said that with a few exceptions, most companies on the island did not have big enough budgets to cover the cost of effective generic marketing.

Mr Wilson said it was essential that the public and private sectors work together. ‘It has to be a partnership; it’s up to the private sector to offer the ultimate products but there clearly is a role for government. And government has to have the budget . . . because it is in receipt of revenue via tourism.’

He said there was now a far better understanding of what needed to be achieved.

‘There is far more transparency, much more involvement of the private sector.’

Mrs Byrne believed it was the role of government to help attract visitors to the island, while the private sector focused on identifying the opportunities.

She said: ‘Possibly, in the past the old tourist board had a tendency to try to tell the private sector what to do, instead of letting the market determine the direction.

‘I don’t believe that the Isle of Man is a place that we should be building theme parks and the like. I think there is a natural evolution of what we’ve got.’

She said the growth of businesses on the island involved in cycling and mountain biking was an example of the multiplier effect and the success of an evolutionary approach which capitalised on the island’s inherent strengths.

Mr Wilson said that Isle of Man Golf Tours was a ‘shining beacon’ of innovative thinking in terms of harnessing existing facilities. Dark Skies was another example.

‘It’s a diversification of what the Isle of Man already has to offer. The Isle of Man is a magical product - it appeals to so many different sectors. Now we’ve got to get the message out there, make more people aware of the Isle of Man. It won’t be easy, there’s no silver bullet but it needs to be done.

‘In the past tourism was taken for granted, which is why it stagnated. The island has had to reinvent itself as a tourist destination and over the last few years there has been huge progress in that - but there is so much more to do.’

Mrs Byrne added that government investment in projects such as the regeneration of Douglas quayside and Ramsey town centre was encouraging the private sector to invest in new and existing businesses, which would benefit tourism.

There was much discussion at the Roundtable on how best to market the Isle of Man, given that large swathes of the UK knew very little about the island.

Mr Power advocated greater use of the internet, especially sites such as YouTube and Instagram.

‘With the online market you can reach out far and wide. By partnering up with some of the tour operators, our message can reach 500,000 golfers.’

Mrs Byrne said that public relations is proving very effective at the moment. ‘We are getting a lot of interest via articles appearing the UK national newspapers such as The Times and the Guardian - articles which were initiated by our PR agency.

‘Countryfile and Coast magazines are champing at the bit to come back. We’ve just had five pages in Coast magazine.

We’re also getting quite a bit of interest from TV coverage in the likes of shows such as ‘Come Dine with Me’.

But Mrs Byrne questioned the cost effectiveness of television advertising to promote the Isle of Man as a destination.

However, Mr Power said that television was working for his company.

‘We had a campaign with Your Golf Travel on Sky Sports. Just a 30-second cover of offers that we’ve got; the feedback and booking that we had were tremendous.

‘We also make our own videos for YouTube. For me, moving pictures do work. Print media may work better for certain groups - maybe for people with an interest in railways or heritage. But for young people, I don’t know. It could be that the mountain bikers the island wants to attract live their lives on Twitter and Facebook.’

Mrs Byrne said that the tourism division makes full use of social media sites to market the island.

‘We’ve building up “snapshots” of the activities and events the island has to offer on sites such as YouTube. And we will continue to do so as they are quite cost effective and you can measure the views which provides an idea of the interest in a particular theme.’

That said, there is strong demand for the Visitor Guide, the tourism division prints each year. ‘We produce 100,000. In the last two years all of them have distributed and the advertising in them is healthy. But we need to do a lot more marketing in the UK.’

Mr Wilson suggested that ‘a little bit of everything’ was the best option although he acknowledged that it was difficult to measure the cost effectiveness of all of the different media.

Mr Watt noted that PR and digital had ‘helped marketing budgets go further in the past five years’. The Steam Packet Company spends over £500,000 a year on marketing in the UK.

‘We have to market the Isle of Man as a destination rather than the ferry company as such because so many people in the UK just don’t know what the Isle of Man has to offer.

‘So a lot of our adverts in the UK press are actually selling the Isle of Man, not just ourselves.

‘Most of our marketing is in the North West - around 40 per cent of our customers come from there but significant numbers are driving up or travelling by train from the South East and from the Midlands, Yorkshire as well.

‘But in terms of growth potential, we feel that spending in the North West offers the greatest opportunity. There are 30 million people living within two hours of Liverpool.’

Mrs Byrne said that when talking to visiting journalists she described the Isle of Man as a small nation with a big story to tell.

The journalists respond by identifying the island’s two key strengths: its close proximity to the UK and the diversity of the island’s offering. ‘These are journalists who have travelled around the world - when they say that what we’ve got it unique we should take note.

‘We believe that 70 per cent of our visitors want to return to the island - a lot of destinations would love to have that sort of retention figure.

‘What’s changed in recent years is that the tourism sector - public and private - is now working in partnership. When I was working in the industry 20 years ago that wasn’t the case. It was private sector against each other and against government in those days.

‘I genuinely believe that we’ve got massive growth potential over the next three to five years - but we’ve got to work at it.

Mr Wilson concurred: ‘The progress the tourism division has made in the past couple of years has been phenomenal. But we are not there yet - it’s a slow process.’

But much progress has been made. As Mr Power noted: ‘Five years ago, who would have thought that there would be 17 cruise ships visiting the island, that we’d have a Dark Skies tour operator, diving tour operators or TT trike tour operators. All of these businesses have emerged because of imagination and energy that didn’t seem to exist before. I think a lot of people have woken up to this. The future is bright, we’re just scratching the surface.’

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The Roundtable participants thanked Sleepwell Hotels for hosting the event at the Claremont Hotel and for providing lunch.

 

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