Written evidence submitted by Dr Dionysius Ang, Dr Alessandro Biraglia and Dr Maximilian Gerrath

 

Promoting Britain abroad – Inquiry

 

Supporting the Tourism Recovery Plan: A Consumer Research Perspective

 

Authors:

Dr Dionysius Ang, Lecturer in Marketing, University of Leeds

Dr Alessandro Biraglia, Associate Professor of Marketing, University of Leeds

Dr Maximilian Gerrath, Lecturer in Marketing, University of Leeds

 

About the authors:

Dr Dionysius Ang is a Lecturer in Marketing at Leeds University Business School. Dr. Ang focuses on cancellation policies, returns, and consumer psychology. She has published in academic journals such as the Journal of Applied Psychology, Psychology & Marketing, and Personality and Individual Differences. She is an expert in choice regret and reversibility research – with a strong focus on cancellation policies.

Dr Alessandro Biraglia is an Associate Professor of Marketing at Leeds University Business School. In his research, Dr Biraglia has focused on topics such as tourism marketing, consumer psychology, sponsorships, and authenticity. His work has been published in academic journals such as the Journal of Travel Research, Annals of Tourism Research, Journal of Consumer Research, Psychology & Marketing, and the Journal of Business Research. In 2020, Dr Biraglia acted as an academic member of the UK Government policy initiative “Rebuilding a Resilient Britain”, focusing on local and national economic development in the aftermath of the first wave of the Covid-19 pandemic. Dr Biraglia is working on several research projects in relation to Covid-19, particularly in the domain of tourism, collaborating with leading international bodies such as the International Council of Museum of the UNESCO and the Network of European Museum Organisations.

Dr Maximilian H. E. E. Gerrath is a Lecturer in Marketing at Leeds University Business School. In his research, Dr Gerrath focuses on topics such as tourism marketing, consumer psychology, and brand sponsorship. His work has been published in academic journals such as the Journal of Travel Research, Annals of Tourism Research, International Journal of Research in Marketing, Psychology & Marketing, and the Journal of Business Research. Dr Gerrath is working on several research projects in relation to Covid-19, particularly in the domain of tourism, collaborating with leading international bodies such as the International Council of Museum of the UNESCO and the Network of European Museum Organisations.

 

Introduction:

In this document, we follow the Call for Evidence by the Digital, Culture, Media and Sport Committee in regard to the topic of “Promoting Britain abroad”. We aim to answer the first aspect of the call from a consumer research perspective. Specifically, we inform the committee about our latest research findings related to corporate sponsorship of cultural and heritage site and cancellation policies and provide actionable implications for the involved stakeholders.

 

What will the impact on the UK’s hospitality, cultural and heritage sectors be if inbound tourism is slow to recover to pre-pandemic levels?

As the Department for Digital, Culture, Media & Sport pointed out in their Tourism Recovery Plan, the UK’s hospitality, cultural and heritage sectors were impacted dramatically by the Covid-19 pandemic.

Due to this economic shock, cultural and heritage sites, many of which were already struggling financially prior to the pandemic, were seeking new ways of funding their operations during the pandemic. One such alternative funding source could be corporate sponsorship—defined as the financial support by corporations.

Even before the pandemic, a joint report of the Organization for Economic Co-operation and Development (OECD) and the International Council of Museums (ICOM) (2018) provided guidelines for local governments to encourage and facilitate the cooperation among the public and private sector to support museum and tourist attractions. Such cooperation was deemed to trigger economic benefits not only related to the potential increase of tourist flows, but also related to a general regeneration of urban areas and improvement of well-being of local communities. 

Anecdotal evidence suggests, nevertheless, that due to environmental, social, and ethical considerations, corporate sponsorship may not always be favourably received by potential tourists. Indeed, our research demonstrates that corporate sponsorship may have a negative impact on perceived authenticity of a cultural or heritage site and, as a result, reduce tourists’ intentions to visit the site (Biraglia, Gerrath, & Usrey, 2018).

Such corporate sponsorship deals can take multiple forms and differs in terms of altruism demonstrated by the sponsoring corporation:

The Italian fashion house Tod's, for example, exemplified high altruism by offering to restore the Colosseum without asking for anything in return. When American Express decided to contribute to the repair of the Statue of Liberty, the business requested promotional rights. Finally, following their involvement in the renovation, the ticketing agency Eventim renamed the Hammersmith Apollo (now Eventim Apollo) in London, pursuing more strategic rather than philanthropic purposes.

Our research showed that corporate sponsorship has a negative impact on cultural and heritage sites if a corporate sponsor acts less altruistically. This is the case if the sponsor asks for too much in return for the financial support. For example, our findings show that the perceived authenticity of a cultural site (such as a museum) suffers if a corporate sponsor demands a rebranding in return for their financial support. Moreover, this authenticity loss then reduces tourists’ intentions to visit the tourist destination. Finally, we find that this effect is particularly strong for heritage sites and less strong for newer cultural sites. Heritage attraction managers should be extremely cautious about permitting firms to alter the nature of the site for non-altruistic motives.

Our findings can also help policymakers develop new initiatives that include private investors and the potential benefits they could receive in exchange for their participation. A tax break for businesses who give to cultural and heritage sites in need could be one way to promote investment. A second option is to encourage local private investment. The inauguration of these new attractions may go together with the rehabilitation and gentrification efforts of neighbourhoods. These projects could then benefit not only the tourism sector, but also the broader economy and welfare of local communities, by providing new jobs and establishing new locations as possible incubators for cultural activities.

A recent project focuses on the impact of Covid-19 on tourists’ perceptions of corporate sponsorship (Biraglia & Gerrath, 2021). The goal of this study is to see how the present COVID-19 health problem affects tourists' authenticity perceptions of corporate sponsorship. The Covid-19 crisis may increase the demand for more genuine CSR activities that are not only acceptable but also expected by consumers. While huge organisations are expected to contribute to society and support local issues, smaller businesses are seen as more genuine and supportive of their communities. Furthermore, consumers believe that smaller businesses put more effort into their charitable initiatives, which may lead them to believe that their efforts are more authentic.

The results of our latest study suggest that tourists will be more receptive to corporate sponsorship due to the Covid-19 crisis, particularly if the money comes from smaller businesses rather than larger corporations. We hypothesize that tourists will perceive a reduced loss of authenticity, have a higher post-lockdown visiting intention, and are more willing to pay higher entrance fees.

We recommend that museums seek—and governments incentivize—corporate sponsorship from a variety of smaller businesses to attract more tourists while maintaining the museum's authenticity, particularly during times of crisis.

 

What should Government and the tourism board be doing to support the inbound tourism industry in its recovery?

According to the Tourism Recovery Plan, large-scale cancellations have caused significant disruption across the tourism sector. The Guardian reports that hotels have experienced an increase in cancellations over the Christmas period amid concerns of the Omicron variant. 75% of Best Western hotels have seen an increase in cancellations, while UKHospitality reported that some venues were facing cancellation rates of 10%. Despite the cost of cancellations, our research shows that British consumers overwhelmingly prefer accommodations offering flexible cancellations over strict. Thus, what sort of cancellation policies should hospitality businesses adopt?

Our analysis of 40,000 Airbnb listings in pre-Covid London provides some clues. Specifically, changing cancellation policies from flexible to strict increased occupancy rates. This effect is especially pronounced for listings that highlight objective attributes. Thus, the type of cancellation policy one should adopt depends on the nature of the listing (Ang et al., 2022)

We suggest that hotel providers vary their cancellation policy depending on the nature of their accommodation. When the listing excels in more objective attributes, such as proximity to transport hubs, excellent business facilities, the provider could adopt stricter cancellation policies.

 

References:

Ang, D., Maesen, S., Liu, Y., Davvetas, V., & Inman, J. (2022, March).  Keeping options open: How decision reversibility dampens satisfaction with choices based on quality [Paper presentation]. Society of Consumer Psychology, Virtual venue

Biraglia, A., & Gerrath, M. H. (2021). Corporate sponsorship for museums in times of crisis. Annals of tourism research, 88, 103056.

Biraglia, A., Gerrath, M. H., & Usrey, B. (2018). Examining how companies’ support of tourist attractions affects visiting intentions: The mediating role of perceived authenticity. Journal of Travel Research, 57(6), 811-823.

OECD & ICOM (2018). Culture and Local Development: Maximising the Impact - Guide for Local Governments, Communities and Museums. Available online at: https://www.oecd.org/cfe/leed/
venice-2018-conference-culture/documents/OECD-ICOM-GUIDE-MUSEUMS-AND-CITIES.pdf