EnglandNet-
Unanswered Questions, Answered...
Gilbert
Archdale FTS, is a former BTA executive who is both an e-commerce
expert
and an active tourism practitioner, operating
his own 5-star self-catering business. He has followed the development
of EnglandNet from its earliest days and has sent the following
article. We also asked VisitBritain to respond to his comments,
hence the responses within the article which are highlighted in
red. Both the article and VisitBritain’s responses are reproduced
verbatim.
What
is happening with EnglandNet, the Government's and VisitBritain's £7
million flagship e-tourism project?
On
December 9 VisitBritain issued a coyly worded Stakeholders' circular
entitled "Important changes to the ownership, governance
and strategic direction of the EnglandNet project". The full
statement is available on the Visit Britain (VB) corporate website
but its essence was that many of the central themes and ambitions
that have characterised EnglandNet to date have been quietly abandoned.
So what is happening? And will these changes make any real difference
to what has been to date both a highly publicised and yet also
a peculiarly puzzling and secretive venture?
VisitBritain
response: The charge that the ambitions of the EnglandNet
project have been quietly abandoned are without foundation. Establishing
the technical infrastructure to support the development of the
highly complex EnglandNet platform has taken some time. Now that
the EnglandNet project is moving further into its operational phase,
the changes are simply a part of VisitBritain’s regular reviews
of its policies, strategies and services.
A Short History of EnglandNet
The
EnglandNet project was launched in a flurry of publicity in March
2002 with
a £3.6 million grant. Tessa Jowell stated
at the time "This is yet another red letter day for tourism.
I am delighted that we are able to announce another £3.6
million boost for the EnglandNet tourism project."
EnglandNet
was grounded in the then ETC's E-Tourism in England Strategy,
published in July 2002. This envisaged a centrally co-ordinated
framework of public sector-led information and reservation systems
providing "E-commerce services to enable end-consumers and
re-sellers to access the whole tourism product of England, search,
book and pay for it through a single transaction".
A key aspect of the EnglandNet strategy was its reliance on the
development of local reservations services via regional, county,
metropolitan borough and district councils. These bodies were effectively
required to establish and operate so-called Destination Management
Systems (DMSs) to be connected to EnglandNet, holding availability
data and processing reservations.
VisitBritain
response: Destination Management
Systems have been a part of the global tourism industry for some
time – long
before EnglandNet was established – to provide customers
with the opportunity to plan and book their trips online or through
a central reservation point.
NetworksforTourism, and now VisitBritain, have declared their intention
NOT to become an agent of sale, consolidator or operator and that
EnglandNet is NOT a booking system in itself. We must, therefore,
work with existing destination management organisations (DMOs),
regional tourism bodies and commercial agencies (all referred to
as consolidators), through their systems, to channel the information
about tourism products to customers.
Also clearly documented in the ETC's (now VisitBritain's) strategy
was the establishment of EnglandNet as a legal entity. Indeed by
early 2003 NetworksforTourism Ltd (N4T Ltd.) had been established
by VisitBritain and England's Regional Tourist Boards. N4T Ltd.
was set up as a private, for-profit company and as recently 23
January this year still stated on its website on that it was "the
proud owner of EnglandNet National Distribution System".
VisitBritain
response: NetworksforTourism was legally established as a limited
company, with England’s regional tourist boards
and VisitBritain as shareholders, to manage the EnglandNet project.
From its inception, it had a specific public service obligation
to plough any profit back into the development of the platform.
A
launch conference for EnglandNet was held in London in December
2003. Reams of
glossy promotional material were distributed by
N4T Ltd. Much of this material implied that N4T Ltd. and EnglandNet
were already providing commercially services that did not then
exist (and indeed have never been implemented), a quite surprising
prima facie breach of Trading Standards and the Prevention of Misleading
Advertising regulations. By March 31, 2004 N4T Ltd.'s published
accounts showed it had already received over £6 million of
public subsidy.
VisitBritain response: The promotional material distributed at
the December 2003 launch conference established the fuure plans
for EnglandNet once the core functions were in place and the system
was fully developed. It did not imply that commercial services
were already available.
In
March 2004 at BTTF, Tourism Minister Richard Caborn announced
the provision
of a further £1 million to N4T Ltd." to
support the development of e-commerce on EnglandNet, enabling consumers
and businesses to buy and sell a wide range of English tourism
products – from accommodation to attractions - online."
The Gathering Storm
But what was actually happening? The original strategy had given
December 2003 as the target date for the launch of e-commerce
services - but their launch seemed to be further and further
away. Even N4T Ltd. didn't seem to have much idea either. In
November 2004 its EnglandNet.co.uk website was still stating
that its e-commerce services would begin the previous September!
As
for VisitBritain, its Customer Contact Services Framework for
Action document,
dated October 2004, says EnglandNet's "full
e-commerce service is due to be available from January 2005".
Now, after three years, the plans for these e-commerce services
appear to have been dropped and N4T Ltd. is to cease trading. Why?
VisitBritain
response: E-commerce remains an essential element of the EnglandNet
service, customers want to be able to research,
plan and book their trip online and ideally through a single portal.
In no way has this service been ‘dropped’ from our
ambitions.
Several factors were in play. Confidence among destinations -
required to invest heavily in the mandatory DMSs - was weakening
rapidly. Where did EnglandNet actually add value? A survey in February
2004 revealed that few had any real confidence that EnglandNet
would benefit their local tourism businesses.
VisitBritain response: The importance of the Internet cannot be
ignored by the travel and tourism industry. The number of people
using the web to research and book their trips is ever-growing
and many competitor destinations are already working to attract
their custom. English tourism businesses can no longer afford to
trail the rest of the world in drawing these web-users attention
to their products.
Research
has shown that potential visitors prefer to ‘surf’ as
little as two or three favourite portals for their travel information.
Our award-winning websites www.visitbritain.com and www.visitengland.com
remain among the most popular choices with 11 million visits every
year, rising to 20 million as we finalise distribution deals with
third parties such as wanadoo.co.uk.
While
we can acknowledge that there has been some confusion about the
process
by which tourism businesses connect to EnglandNet,
every part of the industry recognises the indisputable value that
the project will bring in raising the value of British tourism
towards £100 billion by 2010.
Even
more worrying, the operational basis proposed for EnglandNet
required tourist
officers throughout England to "animate product
suppliers" to sign up to a service about which few had any
real understanding. Leaving aside the use of such absurd jargon,
the proposed approach wholly ignored the realities of small business
practice.
VisitBritain
response: While the technical aspects of EnglandNet can appear
complex, the benefits to tourism businesses and the
wider industry are not – more customers being able to learn
about and book your products and services. With our strategic partners – RDAs,
regional tourist boards and destination management organizations – we
have stepped up our work with tourism officers throughout England’s
regions to raise awareness of these benefits within the industry.
A new national awareness campaign will explain how, together, the
industry can ‘connectEngland’, and a series of roadshows
will further demonstrate our commitment to addressing businesses’ questions
about EnglandNet.
From an industry perspective, as the intention of N4T Ltd. to
provide a range of trading and e-commerce services in competition
with existing private sector suppliers became clearer, there was
growing pressure on VisitBritain.
A group of some 45 companies, principally self-catering agencies
representing over 40,000 properties, made continuing representations
to VB during 2004, expressing concern that N4T Ltd's. proposed
trading services would destabilise a highly successful sector of
the English tourism industry. This culminated in a formal complaint
to the EC's Competition Directorate in Brussels over the provision
of potentially illegal state aid to a private company, N4T Ltd.
VisitBritain
response: EnglandNet will not replace the role performed by self-catering
and other booking agencies. Its function as a
marketing medium is to provide information to end-users on England
and parts of England as a destination. As such it actually drives
more customers, who have found information about tourism products
on visitbritain.com, visitengland.com or one of our distribution
partners’ portals, to consolidators and thus to the product
providers.
As
with any strategy or project of this size, VisitBritain will
continue
to maintain an open dialogue with all interested parties
to ensure that EnglandNet’s tremendous importance to this
country’s tourism industry is supported by all sectors.
Finally
N4T Ltd. seemed to be running out of cash. As a private company
it could not trade while insolvent and yet it had no income
other than government subsidy, either directly or via VB. The
company's 2003/4 accounts showed that its salary bill (for just
nine staff)
was over £500,000. During the early part of 2004 fifteen
additional staff from VB were seconded to it. VB Board Minutes
reveal regular expressions of concern about the 'risk' that VB
was incurring. HM Treasury was reluctant to pour yet more money
into what was fast appearing to be a black hole. In an attempt
to recapitalize the company Richard Caborn appealed to the RDAs
in July 2004 to take an equity stake in N4T Ltd., an approach
which was quickly rejected.
At
around the same time a Gateway Review of the project and its
structure was
undertaken by the Office of Government Commerce,
a Treasury body responsible for reviewing public sector investment
in new projects. According to N4T Ltd.'s accounts this was requested
by the company itself. This was clearly a masterstroke since VB's
own EnglandNet Fact Sheet attributes its decision to take the EnglandNet
project in-house and for N4T Ltd. to cease trading as "building
on the recommendations from the Office of Government Commerce".
What of the Future?
VisitBritain's December announcement appeared therefore to be
bowing to the inevitable. It has indeed resolved two key issues:
1) that of the validity of part -owning a private, for-profit company
which would be competing with private sector businesses in the
marketplace and 2) the temptation for VB to distort its own marketing
and promotional activities in order to drive transaction income
through the books of N4T Ltd.
VisitBritain
response: The review of EnglandNet’s governance
and ownership was undertaken solely to ensure that best value and
considerable economies of scale are offered to the industry and
that the project is fully integrated into VisitBritain’s
wider engagement with the industry. EnglandNet is now clearly positioned
as a distinct, priority project sitting within VisitBritain with
effective stakeholder involvement from the RDAs, regional delivery
partners and industry.
However many issues remain outstanding and many questions go unanswered.
Among these are:
The future financial viability of local authority operated DMSs.
Many DMSs have been established with significant capital assistance
from a variety of sources to support the overall EnglandNet strategy.
But future revenue costs are substantial and rising, at a time
when local authority expenditure is under increasing pressure and
tourism support is not a statutory requirement. However DMS establishment
and operation countrywide remains an integral part of the continuing
EnglandNet concept, irrespective of whether it can be justified
by local requirements.
VisitBritain
response: Destination Management Systems are a reality today
and an integral part of the tourism industry – a fact
that the larger chains have recognised with long-established centralised
reservation and booking systems. Many local and regional reservation
and booking systems already exist, but EnglandNet is the pipeline
that draws together these disparate booking systems into a single
point of contact – the one-stop tourism high street – which
can then be used on visitbritain.com, visitengland.com and third-party
portals. It will therefore help create a level playing field, offering
smaller businesses a marketing force equal to that of national
chains.
Small
business access to national tourism portals. Although continually
promoted
as being a project in support of the SME sector, the latest
information from VB clearly states that "individual tourism
businesses cannot provide data directly to EnglandNet and must
be registered with a consolidator who has a reservation, booking
and distribution system that is compatible with EnglandNet." The
implications from this statement is that SMEs, will only be able
to be included on VB's websites in future if they use so-called
'consolidators', a new term which includes DMOs and RTBs in addition
to commercially operating firms. My own RTB has been unable to
clarify the position and have referred me to VB who have yet to
reply. If such a situation were to arise it would reduce SME exposure
to the marketplace significantly.
VisitBritain
response: Individual businesses, particularly SMEs, can – as they have always been able to – provide information
about their products to regional delivery partners or tourist boards
and be included free of charge on the National Tourism Product
Database. EnglandNet connects the information on this database – for
attractions, accommodation and events – to potential customers
around the world.
However, bookings can only be made via the booking systems of consolidators,
either in real time, by ‘clicking through’ from visitbritain.com
or visitengland.com to a consolidator’s website, or by telephoning/faxing
a consolidator’s call centre. VisitBritain works with existing
and future local and regional booking and information systems to
provide such services to the customer. Therefore, if SMEs want
customers to be able to book their product online, their business
must be registered with a consolidator who has a reservation, booking
and distribution system that is compatible with EnglandNet.
Unrealistic business case and lack of understanding of the industry.
Neither the original ETC e-tourism strategy nor any of the subsequent
work undertaken by N4T Ltd. appears to have reflected real industry
requirements or any proper business case analysis. The golden rule
of IT investment is that technology should support business requirements
- not the reverse. The tangled history of EnglandNet to date reveals
little understanding of the industry's requirements, whether in
the private or the public sectors.
VisitBritain response:
The importance of EnglandNet accelerates as the global tourism
industry moves increasingly
online. To compete
on the world stage, Britain’s tourism product must be represented
in its full depth and breadth, in particular Small and Medium-sized
Enterprises, and customers must be able to easily find and access
bookable product.
Can
any tourism business deny that it would like access to millions
more customers
with money to spend? Whatever their size, England’s
tourism industry requires a service that will help them gain access
to these customers and VisitBritain, through EnglandNet, is supplying
that service.
Conclusion The only realistic conclusion to be drawn is that while
the changes recently announced by VB are welcome the jury is still
out on EnglandNet and its future remains uncertain.
Gilbert Archdale, ASW Consulting Ltd. 01747 854 844 gilbert@aswconsulting.co.uk
For the full text of the VisitBritain statement and the associated
Fact Sheet see
http://www1.visitengland.com/visitengland/presscentre/press_releases/current/2004_12_09_01.htm
VisitBritain response: Preparing a platform that will enable the
thousands of tourism businesses in England to reach millions of
potential customers around the world already searching for their
holidays online has been a highly complex task. With this technical
development phase now almost complete, VisitBritain continues to
raise awareness of e-commerce, e-marketing and e-distribution in
the broader industry in support of regional strategies and help
achieve a critical mass of product, evenly spread across the variety
of small businesses, while at the same time engaging national suppliers
across all sectors.
What is certain, is that without a system such as EnglandNet to
connect the huge variety of tourism businesses, products and services,
our industry cannot compete for the attention of millions of potential
visitors already demanding a single, consistent source of travel
information.
We welcome an open dialogue with the industry to ensure that every
business can understand the benefits that EnglandNet will bring
as we work towards building the value of the industry towards £100
billion by 2010.
Look out for updates at www.visitbritain.com/ukindustry and register
for the monthly Industry Update with the latest news and information.
VisitBritain's
presence at the British Travel Trade Fair (2 & 3
March) will focus on raising awareness within the industry of the
benefits of EnglandNet and membership of the National Quality Assurance
Standards and explain how businesses can 'connectEngland'.
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