Back to basics: toilets, baby change facilities and the High Street

Continuing our review of factors that may influence town centre vitality and viability, we were asked to investigate the importance of toilets and baby-changing facilities by our partner towns.

There are a few sporadic comments about the needs of families for baby rooms, baby-sitting services and diaper changing rooms on the high street or in shopping centres (Jones, 1990; Cohen, 1996; Reimers & Clulow, 2000), but these factors are investigated as part of a centre’s infrastructural services/amenities or its overall convenience.

Outside the retail literature, the absence of decent quality public toilets and baby-change facilities has been suggested as making urban space unwelcoming to women (Greed, 1996). Children’s perceptions of and concerns about town centres, including the facilities they offer, appearance, maintenance and potential threats have also been explored by Woolley and colleagues (Woolley, Dunn, Spencer, Short, & Rowley, 1999; Woolley, Spencer, Dunn, & Rowley, 1999). The need to encourage town centre visits by the elderly through provision of facilities (toilets, benches, lighting etc.) has been researched by Gilroy (2008).

In our model, toilets and baby-changing facilities, on their own, have little impact on high street performance. Like (Gilroy, 2008) we find a whole set of amenities, that we term ‘necessities’, need to be provided – toilets, seating and even car-parking fall into this category.

In summary, studies of these necessities conclude “car-parking, toilets, cash-dispensers or guides cannot compensate for a suboptimal tenant mix or atmosphere” (Teller, 2008). However, whilst they are not ‘attractors’, their absence can repel potential visitors.

All 200 factors that influence the vitality and viability of the high street will be presented at a free half-day conference in Manchester on 10th July 2014. Please email c.parker@mmu.ac.uk if you would like to reserve a place before tickets become available on Monday 9th June 2014.

High Streets and their ability to change

As part of our High Street UK 2020 project we have asked our town partners to identify factors that influence the success of their retail centres, which they want to understand more about. Over the next few days we will discuss these factors.

We start with……….the ability to change.

“Many large retailers in Britain have been highly adaptive to regulatory change, able to alter scale, format, location, and branding” (Hall, 2011).

There is a lot in the literature about how adaptive retailers are to change, but less about how town centres etc. adapt to change. Whilst the symptoms of change may be studied (e.g. vacancy rates), the causes of change are less understood. “While rents represent demand and supply forces, they do not explain underlying economic fundamentals driving change” (Goetzmann & Wachter,1995).

This suggests adapting to change is difficult for towns if there is poor understanding of the factors causing change. Our research has identified over 200 factors which influence the vitality and viability of retail centres, so we know it is a very complicated area. Nevertheless, this doesn’t mean that a difficult problem should just be ignored.

One the outcomes of the High Street UK2020 project is a model that allows towns to understand what impacts most on their retail areas and what factors they can realistically influence.

As a rule of thumb the more influence a factor has on the town, the less they can do about it. Whilst that might seem a bit defeatist – our model will allow places to prioritise their very scarce resources – so their activities and interventions do result in actual change. In other words, they don’t waste time, money and effort trying to change things they can’t – like the popularity of internet shopping.

We will be launching our findings at a free half-day conference in Manchester on 10th July 2014. Please email me if you want to reserve a place before tickets are made available on Monday 9th June. c.parker@mmu.ac.uk

Improving High Street Performance: What are we trying to achieve?

 

We have just finished a review of the published academic retail, shopping and town centre literature so we can identify all the factors that affect high street performance.  We have read over 170 studies and identified a range of factors that affect performance (more of those in a future blog). However, what we have found really surprising is the number of different interpretations of performance.  In other words, what  researchers choose to study.  These are either factors they investigate because they may be changing (e.g.  levels of investment) or ones they think should be improved (e.g. visitor satisfaction).  Of course we have evidence that researchers use the ‘old favourites’ such as footfall, vacancy rates, vitality and viability. But we have found 98 others!

I have published the full list below, along with our definition (see * for exceptions) and an example of an article that refers to the factor. Our next step will be to identify the ones that have the most validity – or mean the same thing to both academics researching performance and practitioners who are trying to measure it. As always we are grateful for any advice, opinions and feedback.

Performance Measure Definition Example Reference
Accessibility Centre accessible by a variety of transport modes (walking, bike, car, bus etc.) Brockman, 2008; Clark, 2006
Achieving town centre business plan Achieving plan agreed by town centre stakeholders Paddison, 2003
Adaptability Centre’s ability to absorb or react to global economic and social change Hall, 2011
Amount of multiple retailers represented in a centre Measure to establish position in order of centres Schiller and Jarrett, 1985
Anchor stores Presence of anchor stores – which give locations their basic character and signify importance Thorpe, 1968
Attractiveness of centre How attractive centre is to consumer – how attractive they find stores and overall offer Dennis et al, 2003
Availability of sites for retail development Available of sites in in or near central locations for development Adams et al, 2002
BID’s Establishment of a Business Improvement District enabling local businesses, services and council to collaborate De Magalhaes, 2012
Business rates Business rates are related to rentable value Singleton, 2014
Carpark usage Occupancy rate of car-park spaces Hogg etal, 2004
Catchment area Area from which catchment is drawn – e.g. how far shoppers are willing to travel to centre Dennis et al, 2002
Centre choice The propensity of shoppers to choose one centre over others Thomas et al, 2007
Patronage Preference of centre – implies frequency and/or convenience Reimers and Clulow, 2009
Resilience Ability of a centre to absorb shock or reconfigure/restructure and adapt to it Wrigley and Dolega, 2011; Balsas 2014
Centre turnover/sales Usually measured in sales per m2 , so comparisons across centres can be made Mingardo and van Meerkerk, 2012
Centre image Merchandising, accessibility, service and atmospherics. Adapted from shopping centre image Sit, Merrilees and Birch, 2003
Commercial yields Level of return on commercial property investment Hutchinson et al, 2008
Concentration of retail Co-location of retail in a specific area. The opposite of retail fragmentation. Robertson, 1997
Consumer utility Pedestrian route choice, heavily influenced by entry-points, location pattern of shops and distance Borgers and Timmermans, 1986
Covenant strength risk The risk associated with the financial worth of a particular tenant Hutchinson et al, 2008
Cross shopping Visiting more that one store when visiting a retail centre Bodkin and Lord, 1997
Customer preference of one format over the other (mall vs street) % of catchment that prefer traditional shopping centres vs shopping centres (or have no preference) Reimers and Clulow, 2009
Customer satisfaction with centre The level of satisfaction with the global level of service offered by a centre Leo and Philipe, 2002
Customer/catchment views and behaviour (inc. patronage) The perceptions of the centre held by customers/catchment and use of the centre by customers/catchment Powe and Hart, 2008; Oppewal et al, 2007
Dealing with retail change Actively managing retail change Tomalin and Pal, 1994
Development of out-of-town centre Proxy measure for inability of local planning controls to restrict out-of-town development. Guy, 1999
Dissatisfaction with grocery-shopping opportunities Dissatisfactition with grocery-shopping opportunities is proposed to be a major factor in out-shopping Thomas and Bromley, 2003; Findlay and Sparks 2009.
Revitilisation Increasing activity, sales and property prices. Improving safety and public realm. Bringing in more customers. Hernandez and Jones, 2005
Entertainment orientation Amount and variety of entertainment offered by a centre De Nisco & Napolitano, 2006
Entry and exit of small retailers Rate at shich small retailers enter and exit centres Wrigley et al, 2009
Environmental quality Look’ of centre, cleanliness Bennison and Davies, 1980
Footfall Number of pedestrians counted over a specific time period, in a specific location Warnaby and Yip, 2005
Duration of trip/time spent in centre Length of time spent in centre. Teller, 2008
Frequency of visit Number of times shoppers visit centre Teller, 2008
Functionality The degree to which a centre fulfills a role – e.g. service centre, employment centre, residential centre, tourist centre. Powe and Hart, 2008
Structure Physical layout of centre, store location, external appearance (fascias etc.) Dawson, 1988
In-town spend vs outshopping Amount of money spent in the (nearest) centre compared to outside of it (e.g. in another centre) Sullivan and Savitt, 1997
Liveability Centres are accessible without a car and consumers can fulfill needs without travelling to another centre Rotem-Mindali, 2012
Living standards Level of personal prosperity Moseley, 1973
Loyalty Take-up of town loyalty scheme Hallsworth and Worthington, 2000
Market share Share of total catchment spend taken by one centre Kubis and Hartmann, 2007
Number of stops on shopping trip Measure of the number of attractions (shops, services, leisure) a visitor makes O’Kelly, 1981
Office, industrial and retail rental values The rental value of commercial property in a centre, across three sectors Jones and Orr, 1999
Order of centre/position in retail hierarchy Position in the retail centre hierarchy. Super-regional, regional, sub-regional, district, local. Teller, 2008
Pedestrianization The provision and type of pedestrian space (streets, open malls, ‘skywalks’ etc.) Cui, Allan and Lin, 2013
Perceptions of retail tenant mix Shoppers’ perceptions of the retail tenant mix Teller and Elms, 2012
Pleasure, arousal Emotional reaction to centre De Nisco and Warnaby, 2014
Probability of consumer at a given point of origin travelling to a given shopping centre Contours are drawn around the centre to show the probablity of a consumer in that zone visiting centre Huff, 1963
Public realm Quality of physical public space Biddulph, 2011
Public space Amount of space that is not in private ownership, that citizens can freely use Cohen, 1996
Public transport usage Usage of different modes of public transport Hogg et al, 2004
Range/quality of goods The range of goods on offer in a centre Thomas and Bromley, 2003
Regeneration Strengthening economic linkages, development attracting commercial investment and consumers Smith, 2004; Otsuka and Reeve, 2007
Repatronage Desire to revisit a centre DeNisco and Warnaby, 2013
Urban functionality Parking spaces, accessibility, pedestrian street maintenance and ease of pedestrian movement DeNisco and Warnaby, 213
Image Overall perception of a centre, based on its attributes (e.g. ‘fashinable’, ‘functional’ etc.) Wong and Yu, 2001
Centre managers’ views Perceptions centre managers hold about their retail tenants, and their willingness to work collectively Predergast et al, 1996
Marketing Town centre effort in marketing Stubbs et al, 2002
Retail centre ranking Ranking retail centres in order, within the retail hierarchy. Reynolds and Schiller, 2007
Retail centre survival The longevity of a centre; in other words, to continue as a functioning centre. Rogers, 1987
Change Entry of new retail and non-retail businesses Dabinett, Gore, Haywood and Lawless, 1999
Retail configuration Structure of retail in different locations, e.g. central place, route centre, industrial town, tourist town Davies, 1972
Centre convenience The amount of time, effort and distance a visitor perceives they have to expend getting to and round a given centre Clulow and Reimers, 2009
Decline Loss of trade and investment Collis, Berkeley and Fletcher, 2000
Retail density Number of retail establishments in a given area Schuetz et al, 2012
Retail innovation Representation of new forms of retailing (e.g. click and collect) Gibbs, 1987
Retail investment Amount of money retailers and property developers invest in retail Hogg et al, 2004
Retail offer Retailer representation, large/small, specilaist/generalist, high service/no-frills Brown, 1987
Retail offer quality Consumers’ perceptions of merchadise quality in stores Whitehead et al, 2006
Retail operational efficiency How efficiently retailers can receive goods Pickering, 1981
Centre power How attracted consumers are to the centre. Clarke, 2000
Retail provision (meets needs of catchment) The health and vitality of a centre is based on its ability to meet the needs of the local catchment Bennison, Warnaby and Pal, 2010
Retail rental growth rates The rate and amount by which retail rents are growing Jackson, 2002
Retail rents The cost of renting retail space (usually by m2) You et al, 2003
Retail saturation The inability of the centre to sustain another outlet of a certain type Clarke, Bennison and Guy, 1994
Retailer diversity A mix of multiples and independents, range of goods, a strong anchor. Findlay and Sparks, 2009
Retailer representation Types of retailers in centre (goods/services, independents/multiples etc.) Wrigley and Dolega, 2011
Retailers’ localisation Adoption of place-based differentiation strategies (e.g. linking with the local community) Coca-Stefaniak, Parker and Rees, 2010
Retailers’ views Retailers perceptions of the performance of their store and its location Predergast et al, 1998
Safety and crime A centre KPI measuring perceptions or actual crime including shoplifting Jones, 1990; Hogg et al, 2004
Service quality* (authors’ interpretation) Space layout, functionality, store external appearance. DeNisco and Warnaby, 2013
Share of hedonic consumers Pleasure-seeking customers spend more money and visit more often. Teller et al, 2008
Shop in more outlets Includes linked trips. Teller, 2008
Shopper circulation patterns How people move around the centre,  pedestrian flows Brown, 1991
Shopping centre development (in-town) Proxy measure for performance. Confidence of investors in location. Evidence of town centres first policy. Reynolds, 1992
Centre similarity The degree to which a centre replicates the offer of another centre Davies, 2012
Shopping centres survival i.e. not being demolished for land value Demonstrates the degree to which existing retail properties can be ‘turned around’ Feldman, 2004
Small shop decline Number of small, independent shops exiting the centre Coca-Stefaniak et al, 2005
Split between comparison and convenience Larger centres have a higher amount of comparison. Smaller centres have higher amont of convenience Thorpe, 1968
Tenant mix Range of goods/services and range of fascias Teller and Elms, 2012
Total retail floorspace Amount of centre floorspace dedicated to retail (m2) Thorpe, 1968
Tourism views Tourists’ perceptions of a location Selby, 2004
Town centre experience Customers experience of a town centre, in terms of convenience, functionality and social interaction Hart et al, 2014
Town centre management Decision of town to use town centre management to coordinate resources and activity Pal and Sanders, 1997
Trust in  centre management Tenants feelings of trust in management (associated with longer lease renewals) Roberts et al, 2010
Market analysis Propensity of type of place management structure to undertake market analysis Kures and Ryan, 2012
Unit size Larger units are associated with larger centres. Proxy for centre power. Clarke, 2006
Vacancy rates Number of retail properties that are empty at any given time Wrigley and Dolega, 2011
Vitality and viability Vitality is reflected by the number of people present; viability refers to ability to attract investment and adapt to changing needs Schiller, 1994.
Vulnerability of retail offer How near the collective offer is near a ‘tipping point’ after which it cannot serve the catchment needs Schiller, 1994.

Asda rolls forwards

Today, Walmart CEO Doug McMillon announced 12,000 new jobs would be created by Asda, over the next five years.

This expansion is in line with the 21% IGD-predicted growth in the food, grocery and drink sector, over the next four years. Asda has over 17% of the grocery retail market so if the market is growing it’s not surprising that ASDA expects to grow too. 12,000 posts only represents 6% of their staff base – which, in turn, will generate an extra £6bn in sales. Not a bad return on investment!

ASDA’s strategy to invest in different retail formats also mirrors the projected areas of major growth in the sector which are online, discounting and convenience.

There isn’t much growth predicted in superstores (8%), in fact Tesco has already announced it is scaling back its plans in this area. But ASDA are proposing 40 new superstores in their latest expansion plans. Coupled with their ambition to grow in locations they are not yet trading in, we can expect the superstores to be in the south or in areas where they can double up as Internet shopping fulfilment centres, with good access to the road network.

Bear in mind that despite the predicted growth in online shopping of 124% by 2014, this will still only represent 10% of the grocery market. The seismic shift that Walmart CEO Doug McMillon referred to earlier today is underway, but like other seismic shifts, such as the invention of the motor car, it will take a while for the full impact to be felt. Widespread car ownership meant retail shifted from town and city centres to out-of-town locations – but it was only in the 1990s that the full impact of out-of-town retailing on town centres was really acknowledged.

Asda is obviously gearing itself up for on-line shopping but I expect this is to ensure its can compete against another worldwide power, Amazon, who already has a slick logistics operation built for online shopping, and is starting to deliver groceries from Amazon vans in the US.

ASDA also needs to keep an eye on the discounters. In 2010 a quarter of shoppers said they would use Aldi, Lidl and the like more often, by 2013 this had risen to a third of all shoppers.

ASDA famously competes on value, so it feels the competition from the discounters more than say a operator like Waitrose. And three weeks ago Morrisons also moved into the discounting territory, taking it head-to-head with ASDA by announcing it was going to cut prices to bring back the shoppers it had lost to the value retailers.

But ASDA is owned by the biggest retailer in the world, Walmart, which has unrivalled economies of scale and power over supply chains. Morrisons may not survive a head-to-head price war against Asda. In which case some of ASDA’s projected growth may, in fact be existing Morrison trade. Exit Morrisons stage left; enter ASDA stage right.

IGD predicts ‘convenience’ to bring the biggest cash growth of any type of grocery shopping-an extra £10bn by 2018, representing a preference to shop ‘little and often’ – in many instances, to complement the big online shop. Only 1% of online grocery checkouts are valued less than £60. Not surprisingly, ASDA are planning to cash in on convenience with 250 new smaller format stores, such as supermarkets or forecourt shops in petrol stations.

The growth of convenience is good news for the high street as long as people can access top up shopping easily or food shopping can conveniently be part of a trip to the town centre for other reasons. Leisure, employment, accessing public services and public transport are all important attractors, which convenience retailing can complement and which, with today’s announcement, is an area ASDA is keen to expand into.

Macro, meso and micro environmental drivers of high street change – progress so far

An update on the #HSUK2020 project so far. We have reviewed around about 150 of the 250 retail centre studies. These are all research projects that have investigated the impact of a variety of factors on town centre performance. Factors reviewed are in three main categories.

Macro environmental
This includes planning legislation, the impacts of the economy, changes in supply chains and manufacturing, social changes such as the increasing car ownership, technological changes such as ability to shop online.

Meso environmental
These factors include anything relating to competition, be that from other size centres or out-of-town locations. It also includes customers, in other words the demographic and other factors inherent in the catchment as well as their preferences relating to centre attractiveness and accessibility. The category also contains suppliers. In this context, suppliers means those that supply ‘offer’ to the retail centre. This means retailers. The innovation in retail formats and structure is a major area of the review – and how this impacts town centres.

Micro environmental
These factors include anything that can be managed (or could be managed) at the town centre level. This includes retail mix, the availability and pricing of parking, whether town centre management is in place, the impact of branding or marketing etc.

We have been conducting a Realtime review of the major findings and tweeting these. This has resulted in around 600 tweets so far. You can read them by following @placemanagement

Next stage will be putting all these into some sort of model that explains all the different factors that impact on the town centre, and rates them in terms of importance. At the weekends, our MSc in Internet Retailing started to do this with 200 or so of the tweets created.

Some examples of the tweets are below

After Merry Hill opened, Brierley Hill’s lost 3% of retail space by 1992 compared to 1986 total (Roger Tym and Partners, 1993). Feb 25, 2014
The only regional out-of-town centre constructed in the UK prior to the 1980s was Brent Cross in north-west London, in 1976. Lowe 2005. Feb 25, 2014
More frequent shoppers spend less per visit. Marjanen 2000. But what about the concept of lifetime value? #HSUK2020 Feb 25, 2014
In general, those most critical of a town’s retail provision were the middle-aged, i.e. 35-55-year olds. Marjanen 2000. Feb 25, 2014
People do not seem to judge the retail supply in city centres and in rural areas according to the same standards. Marjanen 2000. #HSUK2020 Feb 25, 2014
Consumers place more importance on attributes that a large-format retailer emphasises in its market communication (Arnold et al., 1998). Feb 25, 2014
Large format retailers impact most on small town centres in sparsely populated areas and neighbourhood centres (Marjanen, 1998) #HSUK2020 Feb 25, 2014
Parking policies are of lower importance in determining centre choice than other factors -eg quality/breadth of retail. Marsden 2006. Feb 25, 2014
There are no legislative barriers to the development of car-free housing but very little has been constructed in the UK. Marsden 2006. Feb 25, 2014
In London retail centres, car drivers spend £64 per week, bus users £63 per week whilst those who walk spend £91 per week.(Sharp, 2005). Feb 25, 2014
There is no systematic evidence that lax parking standards encourage or strict standards discourage economic growth. Marsden 2006. #HSUK2020 Feb 25, 2014
Aggregate statistical studies find only a very weak relationship between parking provision and economic vitality. Still and Simmonds 2000. Feb 25, 2014.

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RETAILING IN 2013 & REVIEW OF TOWN CENTRES’ PERFORMANCE

Report on 9TH LDC RETAIL SUMMIT – by NIKOLAOS-FOIVOS NTOUNIS

How are our town centres performing? Which are the main indicators measuring the high street’s health? Which consumer trends influence retailing today? These were some of the questions that were discussed in the 9th Local Data Company Retail Summit which took place in London, where LDC’s director, Matthew Hopkinson, presented key findings from the 2013 LDC vacancy report, entitled “Divide and Rule”.

The 90-minute event, which included a review of town centres’ performance in 2013 and a discussion with retail and property experts, circled around vacancy rates, lease lengths, the divide/polarisation between North and South, and the continuous influence of technology on the retail industry.

The report’s key findings revealed that vacancy rates have dropped from 14.6% in February 2012 to 13.9% in the end of 2013, mainly due to the reoccupation of shops on the high streets. There was also a dramatic drop in retail and leisure vacancy rates (12.2% at the end of 2013). Overall, Scotland and England had almost equal vacancies (12.1% and 12.2% respectively) whereas Wales’s empty shops are at 15.7%.

The comprehensive LDC review revealed – not surprisingly – big differences in vacancy rates between town centres in the North and South of England. The North West seems to suffer the most from what seems to be a difficulty to sustain retailers on the high street. Vacancy rates in the region are 17.4%, more than double than the figure of Greater London (8.1%) and 3.5% more than the national average.

News is also not so bright for medium town centres (201-400 units) either. They are expected to continue to decline, as secondary towns are in the shadow of “super centres” and out-of-town shopping establishments. On the contrary, small centres seem to be quite vibrant, driven by specialised independent retail offerings and a sense of community spirit.

Whereas the report claims that 2013 had been a turning point for retail and leisure centres overall, it is evident that there is still a lot to be done to ensure the high street’s health in the UK and especially outside of London. A vibrant independent sector shows signs of promise for driving changes on the high street, but more retailers and property owners need to understand the relationship between “bricks and clicks” and consumers’ needs and wants, as retailing is constantly changing the way the high street should operate. Also, the car is still the king, and convenience will still be a no.1 priority for shoppers, therefore, it would seem, car parking needs to be on top of each town centre’s agenda.

The event’s panellists also showed optimism about the future of the high street, citing big retailers’ successes (e.g. Argos’s click and collect strategy). It is claimed that retailers still value the high street and might regret moving away from it once leases expire, but it is also unlikely that many businesses can survive under current business rates, rent costs, and outdated infrastructure.

Therefore, it is not about less demand for property but about the costs of having a shop in the high street and about the unsuitability of existent properties to cater the needs of today’s retailers and consumers. As technological developments rapidly change retailing, properties need to facilitate those changes. But as property changes are slow and clunky, there is a potential for this to harm the high street. Defragmentation of property ownership, privatisation of data, and collaboration with local councils and property owners might eventually ease the ways of doing business in the high street.

Footfall, and how it can enliven a town centre, was also discussed in the panel, and it seems that for small town centres, it is their biggest concern. A Witham MP who participated in the dialogue stressed the fact that her town centre is unknown to most people, and she claimed that the town’s retail offering is not the only solution for an increase in footfall. Towns need to try to bring people in their centres in ways that can have meaning to them.

Other interesting approaches were also discussed, from social media geo-locationally driven approaches to attract people in shopping centres to changes in planning and shopping hours in order to increase footfall and create demand for new shopping establishments. 2014 seems like an exciting year for the high street and one that might bring considerable changes to it. It will be interesting to see how retailers can cope with the increasing demand for click and collect stores and if collaborations between landlords, retailers, and local councils can deliver vibrant town centres.

Place Marketing Forum – 14th and 15th October

2 days for discovering and exchanging the best place marketing practiced worldwide

The Place Marketing Forum is an international conference hosted every year by the Regional Attractiveness & Place Marketing Chair. The aim of this major conference is to present, share and reward the best place marketing practices worldwide.

40 French and international leading experts and professionals of place marketing, will take part in the 2013 Forum, which will gather more than 300 professionals from public, private and non-profit organizations committed to advance knowledge in the area of regional development and place marketing. The forum will last two days and will take place at the Congress Center of Aix-en- Provence.

The best practices showcased will address key regional attractiveness sectors (economic, residential and touristic attractiveness, cultural, sport and business great events, M-I-C-E, urban regeneration projects) and key place marketing task areas (structuring and qualifying the offer, governance, branding and communication, global strategy, e-marketing, promotion, coordination of actors and citizenship).

The Institute of Place Management is delighted to be contributing to the conference.

You can download the programme and register here

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Manchester welcomes the visitor £

Against a back-drop of rather bleak news in the job and property markets, ‘business tourism’ is a beacon of hope – conferences and business events generate £822 million for Greater Manchester’s economy, attracting over 5 million visitors a year, supporting approximately 22,000 jobs 1

This week we have the Conservative Party Conference, but the ‘holy grail’ of business tourism is international conferences.  When people have to travel here from abroad they spend more money per head than national visitors (on souvenirs and sightseeing) or local visitors (who don’t need all those hotels or meals out). 

Whilst international conferences are seen as the most prestigious for a city, international conferences and meetings in Manchester only account for about 3%1 of all business events; local and regional conferences and meetings are the most common. 

All cities compete for mobile investment, such as conferences and events.  According to the International Congress and Convention Association Manchester is ranked 78th as an international conference venue in the world and 42nd in Europe, compared to Liverpool’s ranking of 134th and 71st2.  However, the city does not fare so well against its comparison group of “second tier” cities, with Amsterdam, Hamburg, Oslo and Zurich all attracting more international business events2

Many international conferences rotate their venue which means it is hard market to be in – as you are not necessarily going to get repeat custom from the various societies and associations that host events; so even though the spend per visitor may be lower from local and regional events, they may be worth a lot more in terms of ‘lifetime value’ to the city.  So Manchester may be better concentrating on its ‘loyal’ local and regional market – a great way to do this AND grow business tourism is to support local organisations host international events, something that Marketing Manchester does very effectively.

Supporting local organisations is a very powerful way to market Manchester City Region to the world, as they act as powerful and credible ambassadors in the networks they are in.  Manchester is known on the world stage, not just through the efforts of organisations such as MIDAS, Marketing Manchester, AGMA, Visit Manchester, Manchester City Council etc, but mainly because of things like the city’s industrial heritage, football clubs and music.  New Economy estimate that Manchester’s  football clubs boost the local economy by about £330 million per year4.  But they are not the only organisations that pull people into to the region.  The Universities attract thousands of international students – at a crucial time in their personal and professional development – whatever their experience of Manchester is, they will be telling their family and friends about it.

In terms of converting tourism and leisure (mobile investment) into inward (fixed) investment, research published in the Journal of Place Management and Development3 demonstrated that ‘warm city marketing’ was more effective than ‘cold city marketing’.  In other words, firms and residents demonstrate geographical self-preference and do not easily move.  Of course, coming to a conference or an event does allow you to ‘trial’ a city – but there is a big step between visiting somewhere and relocating there.  The type of investment that is more likely to come from business tourism is through purchasing goods and services from local firms that have become networked to new national or international suppliers through conferences, trade shows or conventions. 

You can see my comments in the context of a full supplement on growth and the Manchester City Region here.

References

 1http://www.marketingmanchester.com/media-centre/press-releases/28th-may-2012-(1).aspx

 2http://www.iccaworld.com/npps/story.cfm?nppage=3541

 3http://www.emeraldinsight.com/journals.htm?articleid=1889810

 4http://neweconomymanchester.com/stories/1858-manchester_hosts_the_economic_equivalent_of_an_olympic_games_every_four_years__says_new_report