Professional Documents
Culture Documents
Dr Brian Gibbons AM
Cardiff Bay.
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either discussed in meetings, or e mailed Nick Ainger MP, Stephen Crabb MP,
Paul Davies AM, Angela Burns AM, Nerys Evans AM; Joyce Watson AM to keep
them abreast of the situation and the height of feelings within the Pembrokeshire
tourism business sector in particular. In additional to this I am in daily contact
with Julian Burrell of the Wales Tourism Alliance.
Please bear in mind that members suffering from increases – some well over
100% will have to “put to bed” pricing strategies and marketing material very
early in the New Year, and need to be reassured that action is being taken to
minimise the impact of the 2010 revaluation process on their businesses.
The industry recognises that many businesses have benefited from the reduction
of the multiplier. Pembrokeshire Tourism would however urge:
One of the issues particularly concerning the self catering market is the lack of
clarity and understanding in the evaluation formulae used. In the words of the
VOA “a whole basket of evidence” is considered including quality, character,
location etc all of which can be considered entirely subjective. To actually
engage in a forumula for the evaluation of a single bed space which then gives a
derivative for multiplying per bed is not possible, and this is where the trade are
finding it impossible to understand where the revaluations have come from –
some equating it to a “black box” where the information goes in, but something
“incredible” comes out.
Whilst clearly the VOA now have a greater amount of evidence on which to
consider their valuations since the former 2003 process, despite completing the
mandatory forms businesses are experiencing huge increases some of over
250%, whilst their own returned forms have indicated a decline in their business.
The self catering sector is not alone in this matter, and again where turnover has
been used as a main criteria for revaluation, a number of hoteliers see this as
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unfair and unrepresentative of the considerable investment which they have
made in the industry over many years.
I understand from discussion with the VOA, that the zoning criteria used for the
retail sector has now left Narberth suffering with rateable values over and above
that of Cowbridge, which as you will understand enjoys a much greater
surrounding population density and road infrastructure/public transport network
than Pembrokeshire can ever hope for.
Member evidence:
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Whist I indicated that the methodology for rate calculation needs closer liaison
with the sectors, again the hotel based receipts system based on turnover seem
completely ludicrous, although I am told that the BHA have been involved in all
negotiations. I note from correspondence received from yourself to Stephen
Crabb MP that “Non domestic rates are a property tax based on the estimated
rental values of business properties, NOT A TAX ON PROFITS, TURNOVER OR
INDIVIDUAL BUSINESS PERFORMANCE”
As I indicated earlier the VOA has attended a number of member briefings clearly
indicating that both hotels, pubs and restaurants were a receipt based turnover
revaluation process. I note from the same correspondence that “The Valuation
Office Agency has held extensive discussions with organisations representing the
tourist industry such as Wales Tourism Alliance, WASCO, the British Hospitality
Association and The National Caravan Council, and in the main reached
agreement as to the methodology to be used to assess the valuations of
business properties such as pubs, restaurants, guest houses, hotels and leisure
caravans”.
I would indicate here that WASCO certainly is not happy with the revaluation
methodology, and has made this clear on a number of occasions, as has WTA in
attempting to negotiate a meeting with your office to discuss the current
situation.
In terms of percentage rises within the town of Narberth, I know that the
Chamber of Trade will have already been in contact with you making their
representations, together with Angela Burns MP and others and are forwarding a
petition for consideration prior to the Assembly’s Christmas Recess.
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Visit Wales, Tourism Investment Strategy 2008 – 2013 introduction states
“Continual improvement and investment in Wales’s tourism products will be
essential, firstly to maintain our competitive position, and more importantly to
attempt to gain a competitive edge in key product areas”.
Further, the strategy continues by indicating that the stock of 4/5 star hotels
within Wales are low in comparison to competitor destinations, but that 64% of
total graded stock in self catering within Wales has achieved 4 and 5 star, with
the sector profile stronger then competitor destinations. The previous
investment strategy operated by WTB also indicates that in Self Catering
objectives are : - to increase the penetration of branded products and to equip
sector to service year round demand.
Whilst it is easy to say that in 2008 property values were on the upsurge, in
terms of rental values they certainly haven’t been within the holiday sector.
More and more the trade is having to discount on product both within the
serviced and unserviced sector as third party booking agencies such as
lastminute.com, hotels.com become the preferred point of booking for many
visitors/short stay customers. This results in the constant narrowing of margins
for many tourism businesses and increasing commission pressures.
The South West Wales Regional Tourism Partnership strategy “Open all Year”
focuses on a sustainable, all year round industry in SW Wales, putting emphasis
on the shoulder season by developing niche products and events which will
attract visitors into the region.
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To improve tourism business practice in South West Wales creating
profits, ensuring future reinvestment and career opportunities and
supported learning to promote the right levels of skilled workers,
managers and owners.
The current revaluations however are for many businesses contrary to this
strategy. For many within the self catering sector being “open all year” is just
not realistic or sustainable. Indeed constantly rising fuel prices which will impact
severely in the
next few years as oil prices rise, will result in operators simply closing during the
shoulder period, which would be incredibly sad for the industry and revert back
to “how things used to be” – surely we have moved on from that situation – let’s
not revisit the 1980s and recreate the most fragile of economies for
Pembrokeshire.
The investment which the industry has taken with pride in their own individual
businesses, not supported often by grant packages, but own personal investment
or bank borrowings, has now penalised operators.
Cast your mind back not that many years ago, when Christmas and New Year
and early January were NOT peak booking periods. They certainly are now,
especially within the self catering sector, yet this hasn’t come about via national
media campaigns, moreover through sheer hard work, determination and
individual business market strategies by switched on, dedicated and professional
tourism businesses making fantastic use of digital marketing and all of the
advantages which it can bring.
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Pembrokeshire Tourism accepts that in terms of legislation, the revaluation
process has to go ahead, with the economic situation as we see it today
irrelevant to those assessments made on lst April 2008.
We understand too that Northern Ireland and Visit Scotland have postponed the
revaluation process until the economy picks up, yet your office does not appear
to be considering this as a viable option. With 60% of businesses resulting in a
similar, reduced or slightly increased revaluation, my members comment and I
clearly support them in this that the other 40% seem to be subsidising this
process.
I also note from recent articles, which I have read that a revaluation process
could be postponed as all powers for business rates contained within the 1998
Local Government Act were transferred to Welsh ministers in 2006. Therefore,
according to the terms of the Act, WAG should be able to “include such
supplementary, incidental, consequential or transitional provisions as
appears to be necessary or expedient” to deal with this issue.
I think that we would all agree that the product quality and delivery in
Pembrokeshire is paramount, as is the ongoing refreshment, refurbishment and
reinvestment in both capital and revenue elements year on year. Let us not
forget that we are talking here of a visitor economy, small businesses from your
pubs, restaurants, retailers, taxis etc depend on a vibrant tourism industry in
order for them to survive too – all of this has an immediate knock on effect. One
major attraction operator in Pembrokeshire comments “I know in my own
business that when Kiln Park, Tenby opens for the season, I need to put on at
least another 10 full time staff”.
Whilst accepting that the reduction of the multiplier by 20% has a positive
impact on many businesses, where do the self catering sector, with average
valuations increasing by over 55% get additional support, together with the
anomalies in revaluation suffered currently across the board. I have in front of
me for example a local public house with an increase in rateable value from
£15,000 currently rising to £38,500 in 2010. Similarly a two person business,
whereby two very similar cottages were previously rated at £900.00 for both,
now to be revalued at £2,400 each.
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Pembrokeshire Tourism would ask that greater importance is given to
the role of tourism within the Welsh Assembly Government, as a cross
cutting theme there appears to be many Ministers whose portfolio
impacts on tourism including of course the sustainability agenda,
agriculture in terms of the food product. It is interesting to note that
within Scotland and Ireland, tourism is seen as an integral part of
economic prosperity with the portfolio sitting within the economic
development agenda.
Member Evidence:
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The above comments comes from the owner of The Gower Hotel,
Saundersfoot who quite rightly at a Pembrokeshire Tourism member
event this week, indicating that in terms of turnover and how the
assessment has been analysed for the Hotel sector, his operational
strategy could be turned on its head.
REGENERATION
Whilst appreciating that the foregoing need financial assistance in this area,
Pembrokeshire has of course benefitted as outlined earlier from investment both
in the accommodation and attraction product over the last 10 years, including
Tenby TGA. My concern is that this investment and any continued Convergence
funding opportunities including Cadw’s “Defence of the Realm” and E4G bids are
fighting a loosing battle, as without high quality, profitable and sustainable
accommodation and retail attractions within towns such as Narberth, this future
investment needs the holistic and not broadbrush approach.
I have spent the last week developing on behalf of Pembrokeshire Tourism two
RDP projects “Pembrokeshire Green Destinations” and “Pembrokeshire Inside
Out” for the 2011 funding round, both of which look at carbon reduction
programmes for the tourism sector, and geographical groups aiming at
improving the tourism offer by working more closely in partnership and adding
value at each stage of the visitor offer.
Current investigations by the Wales Tourism Alliance have indicated that within
Self Catering that on average Ynys Mon has decreased by -2%, Gwynedd and
Conwy increased by 2%, NE Wales increased by 36%, Powys by 65%, Ceredigion
by 75%, Carmarthenshire by 62%, Swansea & NPT 16%, SE Wales 38%.
HARDSHIP FUNDS
I note from correspondence from your office to Stephen Crabb MP dated 5th
November you indicate: “The Local Government Finance Act 1988 gives local
authorities the power to grant relief to businesses on real grounds of hardship.
Local Authorities must be satisfied that the ratepayer would sustain hardship if
the relief is not granted, and that it is in the interest of council tax payers for it to
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do so. The Assembly Government funds 75% of all hardship relief granted to
local authorities”.
If this is the option which WAG is taking, turning the responsibility back on the
Local Authority to administrate and 25% fund in the face of projected budgetary
constraints, then I fear that many in the industry will just “call it a day”.
Hardship is extremely difficult to prove when sitting on a self catering property
valued at several hundred thousand pounds. However in the current climate, it
would be business suicide to consider equity release options, in order to cash
flow business operations and payment of rates demands!
As one member notes “Over the last 10 years that I have operated this
business, I have seen the imposition of higher licensing costs,
increased requirements for Health and Safety / Fire Prevention / Food
Hygiene and due diligence requirements with associated costs. Indeed
the imposition of a whole raft of beurocracy, which does
not produce anything, the burden of which we have to carry and pay
for. This rating revaluation is a further example of how out of touch
our elected representatives, who are involved in policy making,
governance and economic policy are”.
Not my words, but those out there doing the job, day in, day out, all year around!
REDUNDANCY
Consider further, what does 250% increase on rates actually mean: it means
redundancy, and cutting back even further on businesses, which are operating
leaner than they ever have before.
The tourism market simply can’t sustain these sort of revaluations. Visitors are
yes, looking for good quality, good value for money, but there is a ceiling at
which any purchaser will pay – the industry simply can’t raise that ceiling any
more – the market can’t support further increases. Should operators look to
visitors to absorb the costs, believe me, they will be looking to cheaper options
elsewhere, to Devon, Cornwall and Scotland perhaps, where such rate increases
haven’t had such a huge impact. England already supporting transitional relief,
and as noted earlier Scotland postponing the revaluation process.
Again, it’s interesting to note on your correspondence with Stephen Crabb MP “..
rate relief is one element of an extensive package of measures that the
Assembly Government has put together to support businesses – full details are
available on website http://www.business-support-wales.gov.uk…. “
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On the one hand WAG is offering programmes such as SIF (investment),
PROACT/REACT – both dealing with retraining and protecting jobs – on the other
hand again – conflicting policies at work, the revaluation process will result in
cessation of employment. Member experience indicates that both schemes are
difficult to access, onerous and paperwork driven. A statement by the Deputy
Minister “a total of £5.7 m has been committed to companies in Wales with
under 250 employees. This is around 63% of the total companies who have been
approved for ProAct and 32% of the funding”. I interpret this as 68% of the
funding allocated under Proact has gone to companies employing more than 250
people – over £12 m therefore going to large firms”. I would be grateful to
receive some data on how many small firms in Pembrokeshire have benefited
from this scheme. Feedback received from small business operators in
Pembrokeshire has been quite negative about accessing the funding – I would
add however that there are also glimmers of enthusiasm for the scheme!
If you have already drawn down funding on the Workplace Development Scheme
for example (up to £1,000 for 2 years for training of staff) then you cannot also
draw down PROACT/REACT support.
I sit on the Ministerial Task and Finish Group for the Single Investment Fund. In
past meetings it has been heartening to hear that the quality of applications
coming forward from the tourism sector has been positive – with the current
revaluation knock on business confidence it will be interesting to see at my next
meeting in early December, the effect of this process in Pembrokeshire.
Moving the argument onto the longer term, employment patterns within the
tourism sector need to be considered. As mentioned previously we talk of a
visitor economy, with local communities benefiting from holiday complexes,
caravan parks, hotels and attractions, not to mention our wonderful coastline
with it’s world-leading national trail.
All of these businesses employ local people – strategically again, policy after
policy has been developed looking at retaining our young people within the
county, giving them not just seasonal jobs, but long term sustainable careers;
which as a year round industry, tourism can now do. Traditionally not just
individuals are employed in the industry but families, generation after generation
who have been educated locally both at primary secondary and further
education levels.
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The tourism, leisure and hospitality sector works closely with schools, Colleges
and the industry to keep staff development at the forefront of business
strategies and ensure that Pembrokeshire is the type of quality destination which
visitors expect.
I make no apology for the length of this correspondence, but in closing, I would
say that whilst members have been told that April 2003 valuations were
depressed as a result of the country emerging from Foot and Mouth, the current
economic challenges are no less demanding of businesses. Understanding the
valuation date of lst April 2008 doesn’t make the pill any easier to swallow for a
significant number of Pembrokeshire Tourism members. Tourism puts back into
the economy – over £500m in Pembrokeshire, it doesn’t just constantly take
from it. We are an SME economy; money that is taken in Pembrokeshire is
circulated within Pembrokeshire, keeping families in employment year on year.
My fear is that the current situation is a recipe for mediocrity, whilst members of
Pembrokeshire Tourism have taken huge capital risks in investment; there are
many who feel like “giving up”. We can’t let this happen, Pembrokeshire is a
hugely special place. We haven’t got the big conurbations around us of Cardiff,
Swansea and Bristol, visitors have to travel to get to us, and they do in their
hundreds of thousands, not just for six weeks for the year, but for an extended
period, making the industry sustainable and “open all year”.
I would like to thank you for making the time to meet with me today, and would
invite you and your Advisors to come to Pembrokeshire, meet operators and
experience the fantastic product here, quality of accommodation, attractions and
activities which make the county so special.
Whilst accepting that the legislation is in place, and the process has to go
through the steps, it is the straw that broke the camels back, receiving such an
estimate after a tough year. Despite what banks may be telling the Welsh
Assembly Government during the 8 Economic Summits, this is simply not coming
to fruition – bank lending for capital expenditure within the leisure sector is at an
all time low and cash flow pressure is on.
Yours sincerely,
ALISON J BELTON
CHIEF EXECUTIVE
cc. Alun Ffred Jones AM, Heritage Minister, Nick Ainger MP, Stephen
Crabb MP, Paul Davies AM, Angela Burns AM, Nerys Evans AM, Joyce
Watson AM, Julian Burrell, Chairman, Wales Tourism Alliance, Jonathan
Jones, Director of Tourism and Marketing, Visit Wales, Gary Davies,
Regional Strategy Director, South West Wales Regional Tourism
Partnership, Pembrokeshire Tourism Board of Directors.
55 Main Street,
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Pembroke,
Pembroke Dock,
Pembs.
admin@pembrokeshire-tourism.net
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