6 Apr 2010

iVisitorGuide - a Local Solution to a National Problem

The importance of Tourism to the UK is exceptional; Deloitte's estimate that the wider worth of the visitor economy is £114bn, it attracts £20bn a year in foreign earnings, employs 8% of the workplace and represents at least the fifth largest sector of the economy*. Deloitte's report also identifies...
'future challenges facing the Visitor Economy and identifies key market failures.'
The UK's Visitor Economy is not only trying to flourish during a global economic recession - it is trying to do so despite the hugely negative impact of these market failures.

Two of the identified key market failures - Information Gaps [Asymmetries] and Free Rider Problem are presented as being difficult to resolve unless there is public sector intervention.

However the work we have been pioneering in Cheshire over the last 2 years proves that these Market Failures are simple to resolve with minimum public sector intervention.

'Despite being a large industry with significant potential to grow further on the back of investment, there are market failures that need to be addressed with that investment - these failures could prevent the Visitor Economy from optimising its potential. With respect to market failures, these issues include:

  • Information Gaps [Asymmetries] - Information is imperfect, and there are significant failures where both consumers and businesses in the Visitor Economy suffer from information gaos and potential visitors (both overseas and domestic) do not have the relevant information to use in their decisions.

  • Free Rider Problem - A major market failure within the Visitor Economy is that there is likely to be no equivalent provision of marketing and coordination by the private sector due to the free rider problem. Due to the fragmented nature of the industry, individual business or group of businesses are unlikely to market a place (country, city or region) to internation or domestic tourists. In addition, many tourism providers perceive themselves in direct competition with the immediate neighbour rather than with other destinations and products.'

The iVisitorGuide service directly addresses these two major issues and creates a solution that with widespread adoption could create significant and measurable benefit to the visitor economy as a whole.

From a simple pilot that involved 11 different Tourism Providers we now have a Cheshire-wide extended network of businesses all willingly participating in cross-promotional activities. Furthermore these businesses are financially contributing to the service because they are seeing tangible benefits in the form of increased enquiries and new business as a consequence of being involved.

*In September 2008 the consultancy firm Deloitte, commissioned by Visit Britain, produced a report entitled 'Economic Case for the Visitor Economy'.