I believe this is going to be the hot topic in 2007. One of the problems with Jersey's tourism industry is that it is led by civil servants. I met a civil servant once - he wrote a report about it. Seriously though they may well be bright and committed, but would they recognise a balance sheet if they tripped over it in the street? I think not. The buzz phrase now is 'integrated partnership approach' or a public private partnership to you and me. Merging the entrepreneurial skills of the commercial world with government funding to create a dynamic marketing organisation that can literally take on the world. Just look at New Zealand, who with 100% Pure have created one of the most successful destination marketing campaigns of the new century. They operate as a formalised public private partnership.
A PPP is nothing new for Jersey - The Jersey Conference Bureau has been operating along these lines for years now, and Jersey Finance goes from strength to strength operating as a PPP. OK it might cost the private sector a bit more, but having a stake in Jersey Tourism plc means a greater opportunity to hold the managers to account and take action if 'the business' is not performing.
Rita Rudner said 'Men who have a pierced ear are better prepared for marriage. They have experienced pain and bought jewellery.' I haven't been brave enough to have my ears (or anything else!) pierced, but I think I'm ready to get hitched to government. We work better as a team.
To PPP or not to PPP? That is the Question.
The Chief Minister's Prodigal Child
What's this? Senator Walker accused of ignoring his eldest child, Tourism whilst opening his arms to give the baby of the family, The Finance Industry, a nice big cuddle? "But I give Tourism more pocket money than Finance!", Daddy Frank cries. "And I need both children to survive and do well for the sake of all our other relatives".
The problem is that the older Tourism child went to State School, got a few GCSE's and as a result does not earn very much. Whereas, little (well, quite big for his age!) Finance was clever enough to go to Grammar School, got a degree at Oxford and now earns huge sums. Daddy Frank finds it easier to relate to the better-educated Finance child - whereas he regards his older child as a bit of a pain in the a**e and wishes she (for yes she is a girl) would go back to school and re-educate herself in the winning ways of the Finance Industry.
What The CM needs to remember is that once upon a time, his eldest child was the one earning all the money, while Finance was still a baby. What's more little Finance may get fed up with Jersey one day and decide to travel the world. Then good old, reliable Tourism (which will never go anywhere else) will be the main provider again. Let's hope she's not so old that she's died.....
Oversupply in Jersey's 4 & 5 star hotel market?
2007 will herald the opening of a 190 bedroom Radisson Hotel on Jersey's Waterfront along with a rebuilt Royal Yacht Hotel and a refurbished Grand Hotel. These join the recently refurbished Hotel de France, Pomme d'Or Hotel and Club Hotel & Spa to compete in the 4 & 5 star market. By the end of next year nearly a quarter of the island's beds will be in this range and the key question is will there be enough business to go around? The hotels are going to compete in 3 key markets - business, short break, meetings & conference. So let's look at each of these markets in turn.
1. Business visitors. Following 9/11 corporate organisations dramatically cut back on business travel & in the four years following 2001, business visitors to Jersey fell by a total of 24% to 56,640 in 2005. After an initial reduction due to the terrorist threat, businesses realised that in many cases travel had become unnecessary as modern systems allowed more cost-effective communication. At the same time the average length of stay for those still making a business trip to the island fell by almost 13% to just over 2 nights in 2005. This trend appears to have flattened out in 2006, but nonetheless these figures must be of some concern to the new hotels seeking to carve out a share of an at best flat market. The business visitor market is created to a large degree by the Finance industry. A downturn in this sector could spell disaster.
2. Leisure visitors. The leisure market has also declined sharply, but much of this has been at the 1 & 2 star end of the market. As consumer expectations have risen, so 4 & 5 star properties have benefited. There is no doubt that this is where the future growth for leisure breaks is going to be focused, as the so-called 'Cosmopolitans' seek modern & comfortable higher-end accommodation providers. The problem is that the market is predominantly for short breaks, travels at weekends & acts on impulse booking within a few days or weeks of departure . Anyone who has tried booking an air seat in or out of Jersey on a Friday & Sunday will know that the cost is prohibitive and with so many other short break destinations available, Jersey will find it very hard to compete, unless more capacity is added at weekends on key routes.
3. Meetings & Conference. Again a market that has seen decline in recent years, although this was partially due to the temporary closure of the island's key conference hotel - the de France. However the lack of a modern, attractive conference centre (Fort Regent is no longer acceptable) the opportunity to attract larger association events is virtually nil. There is also the on-going issue of access - the airport's location dictates that on a certain number of days a year fog prevents any aircraft movements. Organisers of large conferences simply cannot afford to have the risk of a major event being completely written-off due to weather. There is evidence that conferences are getting smaller & certainly the new properties are well placed to take advantage of this market.
So the huge investment (c. £140 million) in high-end hotels, entirely undertaken with private investment is seen as testament to the industry''s belief in the future of tourism in Jersey. With almost 1000 additional beds entering the 4 & 5 star market next year, investors will be holding their breath to see whether their dream turns into a nightmare.
