Clouds gather over VisitLondon

VisitLondon, the body charged with attracting tourists to the city, faces the biggest shake-up in its five-year history. Just weeks after the capital became the official Olympic city, VisitLondon has lost its high-profile chief executive and, say observers, faces becoming a victim of credit crunch cost-cutting at precisely the time it needs to spend more.

The departure of James Bidwell as chief executive after three years, announced last week, comes as serious questions are being raised about the ability of the body to persuade tourists to come to the city. Its chairman Tamara Ingram will also step down. The resignations are already sending tremors down the spine of the industry, which feels the Government’s fund-crunching strategy for tourism blights the industry’s future. While the funding bodies vow to inject more cash, some feel that Mayor Boris Johnson is relying on a payback from tourism during the 2012 Olympics.

Yet, they say it is foolish to expect the so-called “Olympic effect” to pay dividends up to the Games, and that more, not less, needs to be done to promote the city to all visitors, especially as the tourism industry is likely to feel the effects of the global economic downturn.

As one observer suggests: “There is a well-known phenomenon called the ‘pre-Olympic dip’. People put off going to an Olympic city for two years before the Games because they know they will visit it while they are on. You need a lot of marketing support to encourage visitors during these lean years.”

Such suggestions have led to speculation that Bidwell, a former Selfridge’s marketing director, quit because he sees little future for VisitLondon. There have been strong rumours that the London Development Agency’s (LDA) strategy to review and overhaul smaller agencies, such as Think London, Film London and London Unlimited, has already been scrapped. It is thought the LDA may merge them into an umbrella organisation, potentially under the VisitLondon banner, although the authority denies this.

Three-quarters of Visit London’s funds are from the LDA, the remainder is derived from other streams of income from the private sector. VisitLondon works in partnership with the Mayor of London, London Councils and the tourism industry. The body markets the city as a leisure destination for domestic and overseas visitors as well as business travellers.

The body, formerly known as the London Tourist Board (LTB), received fresh impetus from former Mayor Ken Livingstone, who reorganised its board and roped in top marketers, such as Bidwell. Under Livingstone’s tenure, VisitLondon launched the London Unlimited programme, aimed at building business.

In July, under the leadership of Boris Johnson, the LDA axed London Unlimited, which was overseen by Bidwell. London Unlimited was a £5m-a-year body responsible for building London as a global brand. The idea was to create economic benefit for London by positioning the city as an international destination across a range of sectors to multiple audiences.

The LDA insists that it brought London Unlimited’s function in-house to “ensure delivery” of London’s presence at the Beijing Olympics and this was not done on the mayor’s orders.

Sources say that under the new mayor, LDA has already cut £1.5m from VisitLondon’s budget with more to follow. But VisitLondon vehemently denies that Bidwell’s departure is related to either cost-cutting from LDA or the abrupt winding-up of this programme.

Miles Quest from the British Hospitality Association (BHA) says that the future of VisitLondon will depend on the leadership that will follow and the funding it receives. While he feels that the body might survive in its existing shape and form, its impact will be restricted and limited. He says: “The general level of funding for VisitLondon and VisitBritain [which promotes the country as a tourist destination] is shrinking at a time when London has to fight for itself in a more competitive global tourism market.”

Furthermore, he says the Government in fact began the process of stealth cuts in 2000, despite evidence that spending on promoting tourism reaps economic rewards. “The funds remained the same for quite a few years. And now we expect it to shrink further for the next four years,” he says. According to BHA, if the Government has such a complacent approach, then London will start falling back.

And it is not just VisitLondon that has been affected. VisitBritain, which receives its funding from the Department for Culture, Media and Sports (DCMS), has also seen an 18% shrinkage in funds committed up to 2012. “This funding strategy will result in reduced marketing. It is foolish to cut marketing investment when the industry is actually facing a crisis,” Quest concludes.

Bob Cotton, chairman of Tourism Alliance, a body that encompasses holiday, hotel and travel companies, says the industry is waiting for Johnson to reveal his stance on tourism. He says: “The LDA funding is driven by the Mayor, and the new Mayor has not yet made a single comment on the strategies for tourism.”

Tourism Alliance has been vocal in applauding initiatives such as the O2 Arena and the Tour de France, which it says have been “particularly effective” in drawing visitors to the city.

But Cotton criticises the Government for cutting financial support to an industry that supports over 350,000 jobs. Tourism in London is worth over £16bn to the local economy, he suggests. “Yet there is no direction from the mayor and they have not even appointed a tourism adviser in the past five months to deal with these bodies and their policies,” adds Cotton.

The industry players feel that tourism in the country is particularly under pressure and that now is the time for active marketing strategies. One insider suggests that much of the promotional work for the city will be led by those involved in staging the London 2012 Olympics, but its remit is too narrow, and too focused on a finite amount of time just before and during the Games.

Tourism Alliance says that already there have been “far fewer people travelling to the city and fewer domestic tours” this year. Cotton says that the level of frustration within the industry is particularly acute because London Unlimited was wrapped up and “there was no communication or reasoning on why £5m to £6m was withdrawn from promotional activities”.

Yet, the LDA claims it is increasing its tourism budget in 2008/09. “This includes increased funds for VisitLondon in recognition of the organisation’s strong performance and important role in the marketing and promotion of the capital,” a spokesman says.

LDA’s funding to VisitLondon has “increased from £15.2m in 2007 to just short of £15.5m” this year, he adds. But, this equates to just a 1.8% increase compared to a far steeper rise in inflation during the same period.

The LDA spokesman also says that the marketing and promotion of London as a visitor destination remains “a key priority for the LDA, in particular to capitalise on the opportunities presented by London 2012”.

The VisitLondon board meets in October to discuss Bidwell’s replacement. Even as its two key personalities stand down, the body refuses to believe their departures will raise serious questions about its success and, indeed, its very existence.