Tourism and Planning. Part 2: Tourism Development and Planning
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The planning system is the cornerstone on which the tourism sector is based – it has a significant impact on the sector’s ability to grow in response to future demand and to protect natural and historic assets. Part One of this article (March 2010) provided an overview of planning policy and management and how this affects the tourism industry. Part Two examines Planning Policy Statement 4 (PPS 4): Planning for Sustainable Economic Growth, which was introduced in December 2009. This new policy planning statement is the principal guidance that planning authorities will now use to assess proposed tourism developments. It is vital that tourism businesses and destination managers are well-acquainted with it. This includes new provisions relating to the sequential approach, the need for site impact assessments and provision of evidence on demand, so that sustainable tourism growth can be achieved. This article provides a clear and concise overview of the subject.
Planning Policy is set at a national level with Planning Policy Statements and guidelines. Part One showed how the planning system introduces policy and is responsible for managing development. The most recent change introduced towards streamlining the planning process is the new Planning Policy Statement 4: Planning for Sustainable Economic Growth. The following looks at opportunities available for tourism development, how this is affected by the new policy and why it is important for the industry to interact with the planning system.
There is not a specific PPG/PPS for tourism, however the principal guidance is included in the recently introduced PPS4: Planning for Sustainable Economic Growth, where it is seen as part of broader economic activity and development.
As part of the government’s streamlining process, PPS4 , published on 29 December 2009, replaced the following policies :
- PPG4: Industrial, Commercial Development & Small Firms
- PPG5: Simplified Planning Zones
- PPS6: Planning for Town Centres
- the economic development elements of PPS7: Sustainable Development in Rural Areas.
It sets out the Government’s comprehensive policy framework for planning for sustainable economic development in urban and rural areas. On publication, the Government highlighted that PPS4 will combine:
'…town centre and economic development policy into a single streamlined statement that supports sustainable economic growth, protects local markets and small shops and will help Councils make the decisions to speed up economic recovery in our towns and rural communities.'
Tourism is seen to have a role in promoting the viability and vitality of town centres and supporting the night-time economy. Consequently town centres will often be seen as the preferred location for tourism development. Within rural areas local authorities are urged to help deliver the Government’s tourism policy by supporting:
- the provision and expansion of facilities
- reusing existing buildings and locating new buildings in or close to village or service centres
- extensions to visitor accommodation
- minimising the intrusion of caravan and chalet developments
- managing tourism development in sensitive places to conserve their qualities.
Although many PPSs have some impact on tourism and leisure, at present, the Good Practice Guide on Planning for Tourism  (GPG), published in May 2006 arguably has the most important role to play in helping to determine planning decisions relating to new tourism developments.
The GPG superseded PPG21 (Tourism) and aims to provide guidance to both developers and local authorities, to ensure that strategies and plans for tourism, as well as planning and development decisions, are based on the most robust evidence possible.
The value of local tourism is well recognised and, as the GPG states, tourism can bring broader benefits to the economic and social wellbeing of local communities. It can:
- be the focus of the regeneration of urban and rural areas, as has been demonstrated by its success in Birmingham and in many seaside resorts
- provide a catalyst for growth in an area, raising its profile and stabilising migration
out of the area
- provide opportunities for retraining for the resident workforce and help to diversify over-specialised economies
- help maintain and expand underused sports and recreation facilities in urban areas.
Furthermore, the revenue generated by tourism can help to:
- support and enhance local services and facilities such as shops and pubs, particularly in rural areas
- secure the retention or upgrading of public services such as public transport, health centres and libraries
- support a broader and more vibrant and active community by attracting arts, sports or cultural events
- aid diversification within the rural economy
- underpin the quality of the local environment and facilitate further enjoyment of it by residents and visitors.
Just two examples of tourism and leisure developments and events playing a major part in local economies include the following.
- The economic impact of the 2003 British Open golf championship at Sandwich in Kent. Research undertaken by HLL Humberts Leisure found that the tournament resulted in additional spending within the East Kent economy of around £17.6 million.
- More recently, the impact of the fifth Center Parcs village in the UK (at Warren Wood in Bedfordshire – construction due to start in late 2010/early 2011) is estimated  to have a direct local impact of at least £10 million and the creation of at least 900 full-time equivalent jobs.
No doubt with this in mind, the GPG states that planning authorities should:
- develop and maintain a thorough dialogue with representatives of the tourism industry
- ensure that this dialogue helps to support a sound database on the characteristics and needs of tourism in the area
- use that data in applying effective techniques designed to ensure that those needs are met as fully as possible.
There is often a perception that planning damages the tourism industry by frustrating enterprise and innovation. In practice sound planning is vitally important to the industry. Planning documents:
- are crucial and clear statements of local authority policy towards tourism
- assist in facilitating and managing the development of new facilities by allocating land and establishing general conditions that development must meet
- provide and control the public service infrastructure on which tourism depends
- provide certainty and a level playing field for all developers and operators.
- helps to conserve (protect and enhance) the environment on which so much of the industry depends
- provides a framework for destination and visitor management.
Tourism interests cannot afford to ignore planning. Unfortunately, many people working on the commercial side of the industry get involved with planning only when they make a planning application. They do not always realise that they need to engage with planning policy, which is vital for enabling development through both supportive policies and the allocation of sites for development. It is important for the industry to become a shaper of plans. It must:
- contribute towards the preparation of development plans by taking advantage of consultation procedures
- be aware of planning policies when applying for planning permission and shape and negotiate applications accordingly
- take advantage of the right to make representations on planning applications – to support proposals that will benefit the industry and object to those that will harm it.
The best ways to achieve this are by developing contacts and good relations with the planning departments in local councils, being proactive in assessing needs or future needs of the local area and opening dialogue on how appropriate development can help meet these needs.
In preparing new documents for the Local Development Framework (LDF), local authority plan-makers need to ensure that their policies and site allocations are predicated on a robust evidence base. This presents opportunities for tourism development.
For example, in terms of planning for new visitor accommodation this may extend to commissioning consultants to produce an Accommodation Study highlighting the current capacity requirements of the local area and the likely future prospects for the local accommodation sector. When such studies are undertaken by local authority planning departments it could offer opportunities for developers and operators to expand.
If, however, the local authority has not completed such a study, then tourism developers will benefit from producing a detailed Need Assessment highlighting the likely levels of demand for their new tourism development proposals.
Visitor accommodation is just one example of the opportunities that may exist for the private sector. Need Assessments can, of course, be applicable for a broad range of tourism projects including visitor attractions, marinas and caravan parks.
The draft PPS4 consultation paper advised that local planning authorities should:
'consider proposals favourably unless there is good reason to believe that the economic, social and/or environmental costs of development are likely to outweigh the benefits.'
However, this pro-development rhetoric has become somewhat diluted in the final published statement:
‘local planning authorities should adopt a positive and constructive approach towards planning applications for economic development. Planning applications that secure sustainable economic growth should be treated favourably.’
Policy EC11.1 advises that local planning authorities should:
‘(a) weigh market information and other economic information alongside environmental and social information; ’and ‘(b) take full account of any longer term benefits, as well as the costs, of development, such as job creation or improved productivity including any wider benefits to national, regional or local economies.’
At this stage it is difficult to assess whether this policy will herald greater favour for sustainable development in planning decision-making to meet the increasing demand for UK-based tourism. However, the requirement for local authorities to weight market and economic information alongside other factors is undoubtedly a positive step.
Clearly, though somewhat tempered between the draft consultation paper and actual publication, the new PPS4 does appear to highlight that planning applications for new economic development – including tourism development with suitably detailed supporting information regarding local economic benefits – should be treated favourably.
In addition, with regard to plan-making in rural areas, Policy EC7 provides specific guidance for tourism development, stating that:
'local planning authorities should support sustainable rural tourism and leisure developments…which utilise and enrich, rather than harm, the character of the countryside.'
One of the key points of note arising from the new legislation is the retention of the sequential approach for main town centre uses . This is applicable to tourism development such as hotels and conference facilities. The PPS places the onus on local authorities to establish the need for different tourism and leisure uses and identify appropriate development sites. Policy EC5.1 notes that local planning authorities should:
- base their approach on the identified need for development
- identify the appropriate scale of development, ensuring that the scale of the sites identified and the level of travel they generate, are in keeping with the role and function of the centre within the hierarchy of centres and the catchment served
- apply the sequential approach to site selection (see Policy EC5.2)
- assess the impact of sites on existing centres (see Policy EC5.4)
- consider the degree to which other considerations such as any physical regeneration benefits of developing on previously developed sited, employment opportunities, increased investment in an area or social inclusion, may be material to the choice of appropriate locations for development.
The new PPS4 includes the sequential approach to site selection that was contained in PPS6, but provides greater clarity on the sort of sites that will be appropriate. Policy EC5.2 states that local planning authorities should identify sites that are ‘suitable, available and viable’ in the following order:
- existing centres, where sites or buildings for conversion are likely to become available
- edge-of-centre locations, with a preference for those that are well connected to the centre
- out-of-centre sites, with a preference for those that are well served by a choice of transport and closest to the centre.
Policy EC5.3 repeats the preference towards sites that serve the needs of more deprived areas.
In reality, nothing has really changed in the implementation of the sequential test, although the new PPS4 makes it clearer as to what is required. However the danger, as with the former PPS6, is that the very different site requirements of tourist facilities will get swept into an overall sequential test that is primarily targeted at retail facilities.
The possibility of this suggests that it would always be preferable to undertake a separate sequential site assessment for new tourist facilities in the context of an overall market need assessment for the locality (a proposed new hotel development for example).
For applications for main town centre uses that are not in accordance with the development plan, Policy EC15 highlights a similar sequential approach to that of Policy EC5, which again does not appear to have changed from PPS6.
Furthermore, the Government has published detailed accompanying Practice Guidance on Need, Impact and the Sequential Approach  to assist local authorities, landowners and developers in preparing or reviewing these site assessments, and to help interpret town centre policies set out in PPS4.
PPS4 now makes reference for the need to assess the impact of out-of-town centre sites on existing town centres. This applies to developments, such as retail outlets or hotels, which are not covered by local policy and are not in accordance with the local development plan. This requirement has led to the scrapping of the retail needs test, despite opposition from the Commons communities and local government select committee .
The Practice Guidance  states that:
‘… an assessment will be required to identify the key impacts identified in EC16 focusing in particular on the first five years after the implementation of a proposal.’
But what is an impact assessment as determined by PPS4? It is described as follows:
‘the objective of an impact assessment is to measure and where possible quantify the impacts of proposals or policy options. This can be used to gauge their potential impact on the development plan strategy, their effects on planned new investment and their overall consequences on the vitality and viability of existing centres such as reduction in footfall, impact of vacancies, etc …it will be for the decision maker to determine what constitutes an ‘acceptable’, ‘adverse’ or ‘significant adverse’ impact, based upon the circumstances of each case, having regard to national and local policy objectives.’
Taking hotel accommodation as an example, this impact could be measured by visitor number forecasts highlighting the need for additional hotel rooms, a detailed business plan showing the commercial viability of the development proposals, or capacity analysis indicating the demand for additional accommodation, of what type, and the ability of the existing market to provide this.
The Practice Guidance goes on to assert further key principles:
‘the new impact test is particularly relevant to retail and leisure/entertainment proposals. Other main town centre uses (including offices and arts, culture and tourism) will require impact testing, but the scope and level of detail required will vary according to the local circumstances. Applicants and local planning authorities should seek to agree the scope and level of detail of impact assessments in advance of applications being submitted.’
From a developer’s perspective, this is relatively positive. It is clear that the level of detail required to measure the impact of a new hotel proposal is not intended to be as great as that for retail. Pre-application discussions are actively being promoted, and the detail level of supporting evidence can be clearly agreed in advance.
However, if a local planning authority has already completed a capacity and need analysis of hotel bedspace as part of its plan-making process (as required by Policy EC5), they will be aware of the capacity of the area to absorb new hotel accommodation, and of what type, without detriment to the existing town centre infrastructure.
Much of the new impact test is predicated on town centre retail use. But what effect is the new impact assessment and retention of the sequential test likely to have on tourism development?
The local planning policy framework is changing at a varying pace across the country as the changeover between Local Plans and the LDF gathers pace. As noted in PPS12: Local Development Frameworks, there is a requirement for local authorities to provide a detailed and sufficiently robust evidence base against which to set their local development documents and core strategies.
The new PPS4 highlights that local authorities should use evidence to plan positively. Indeed, Policy EC1.1 (a) notes that regional planning bodies and local planning authorities should ‘work together with county and unitary authorities preparing local economic assessments to prepare and maintain a robust evidence base to understand both existing business needs and likely changes in the market.’
From a tourism perspective this may include, for example, independently produced Visitor Accommodation Capacity Studies assessing the existing level of serviced and non-serviced provision within the district, together with an assessment of the current requirements and likely future needs set against changing visitor numbers. Where a current or future need is identified, such studies can be extended to examine the suitability of potential sites through the sequential test, as well as the effect of their development on the town centre through the new impact test.
Equally, the provision of such an evidence base to support local planning policy documents clearly has implications for tourism developers / operators in terms of the amount and type of additional supporting information that will be required when submitting applications. Evidence on market need / demand, site selection and impact on the town centre, for example, will need to be sound and reliable in order to prove the case for development within the local and national planning policy framework.
There are many ways to prepare tourism need and capacity assessments and interpret the available data – whether it be the volume and value of visitors or accommodation occupancy statistics, for example. Nevertheless, there are a number of key elements that any appropriate study should incorporate to ensure that the evidence gathered by, or presented to, the local planning authority is suitably robust. These are discussed below.
- What is the strategic context? Does the proposed development provide a good fit with local and regional tourism and economic development strategies? The regional tourism strategy for the South West of England, ‘Towards 2015: Shaping Tomorrow’s Tourism’ , for example, highlights the importance of driving up the quality of the product (ie focusing on the value of tourism rather than just the volume).
This should favour proposals to introduce new quality accommodation or attractions, or indeed the upgrading of an existing business/property.
- What is the catchment for your product? What is the age and socio-economic profile of catchment residents, and does this provide a good fit with relevant target markets? Consider the existing level of visitor numbers and interest in the area in question. This demographic and visitor context will help to demonstrate whether there is likely to be sufficient market demand for the development proposals.
Properly and effectively done, it will provide an overview of demand which can be set against existing and future supply to identify a surplus or deficit of product provision.
- Having established the market demand, is this met – in both quantitative and qualitative terms – by existing supply? Has research identified any market gaps and do the proposals meet this identified need?
It is unlikely that any right-thinking commercial developer would seek to develop a product in a particular location if they do not believe there is a market for the product. Nevertheless, this has often been shown to be a necessary step in achieving planning permission for tourism development in the UK – whether a major visitor attraction of international significance or a small campsite offering just a few pitches on a seasonal basis.
The above steps, whilst somewhat simplified, will help to form the robust evidence base that the local authority will require in plan-making, or in the determination of planning applications for new tourism developments. With regard to the latter, the exact content of such evidence can be agreed in advance with planning officers.
In this context, it is important to note that the sequential test and impact test are only required for main town centre uses  that are not in the town centre, and not in accordance with the relevant development plan. These tests are not, for example, required for a holiday village in the countryside or for a hotel in the town centre.
Planning processes involve a wide range of stakeholders, are medium to long term, are subject to economic, social and environmental appraisal, assess and reconcile capacity and demand, are based on evidence and must be monitored and reviewed.
From whichever angle your personal or professional standpoint may be, failure to provide a detailed evidence base to support LDF policy and site allocations or planning applications is likely to severely hinder new tourism-led development and regeneration proposals.
The streamlining of planning guidance set out in the new PPS4: Planning for Sustainable Economic Growth should assist operators and local authorities plan more effectively for tourism growth. A more evidence-based approach, together with a renewed focus on sequential tests and impact assessments, should offer developers and operators opportunities to demonstrate the potential of their proposals to local planning authorities.
Only time will tell if this approach will herald a more streamlined and positive approach to the determination of new applications for tourism development. However, PPS4 does appear to place some responsibility in the hands of local authorities to give equal weight, alongside long-held sustainability, social and environmental indicators, to local economic development through tourism and leisure.
Brian Human has worked in urban and environmental planning in England for over 30 years. Until 2008 he was Head of Policy and Projects at Cambridge City Council leading a multidisciplinary team dealing with planning, conservation, transport, urban design and sustainability issues. He is now an independent consultant taking an interdisciplinary approach to urban planning issues.
During his career Brian has built up a strong interest and knowledge in tourism planning and destination management. He was Chair of the Historic Towns Forum in 2006-2008 and is currently Vice Chair – the Forum promotes best practice and interdisciplinary working in historic towns and cities. Brian is also a Fellow of the Tourism Society.
Peter Sharp is a Senior Consultant at Humberts Leisure. After graduating in Tourism and Planning from the University of Westminster, he worked in the financial services and construction industries for a number of years prior to joining Humberts Leisure in 2004. Peter has worked with clients including regional development agencies and local authorities, major private landowners to small businesses and local entrepreneurs. He specialises in preparing detailed feasibility studies, business plans, need assessments, site options appraisal and economic impact across the leisure and tourism spectrum. Peter has recently completed a Post-Graduate Certificate in Local and Regional Economic Development.