To compete with the best in the world, you have to match them

Tourism Minister Kim Howells launched the Government's Best Practice Forum this week. What benefits does he expect it to bring the industry.

A recent survey by the Government's Small Business Service showed some startling differences between the most productive companies in UK industry and the least productive.

For example, the bottom 25% are achieving profit levels one-tenth of those achieved by the top 25%. At the same time, the top 25% of companies need three times less overhead than the bottom 25% and require three times fewer indirect staff and half the number of managers.

If this is the situation in industry generally, then it is also true of the tourism, hospitality and leisure industry. With its fragmented structure of nearly 300,000 separate establishments, the industry's productivity is certain to vary just as widely. What we must do is to encourage the least productive to raise their efficiency to the level of the best and for the most productive to become even better.

We must make the industry world-class in every practical way - in the way it recruits, retains and motivates its staff; in the way it provides a value-for-money product and unbeatable service; in the way it invests for the future; and in the way it reaps the benefit of these improvements through higher profits. This is the Government's objective and, I am delighted to say, it is now the industry's objective through the work of the Best Practice Forum, which I launched this week.

The forum has developed from the Government's White Paper, Our Competitive Future, which argues that Britain's industries now compete in a global economy that is growing ever-more ruthlessly competitive. The recent outrages in the USA have made that competition to win customers even sharper. The only way the tourism, hospitality and leisure industry can survive profitably in this environment in the long-term is to raise its game by being more efficient, more productive, more aware of customer needs. In other words, by simply being better.

Thanks to the British Hospitality Association, which was the driving force in creating the Best Practice Forum, and with a £1.3m DTI grant the industry now has a strategic alliance of six trade associations all working towards the same aim. This alliance is welcome.

It is certainly high time that various organisations in the industry worked together for their common good and the alliance points the way forward to a greater degree of collaboration than has occurred in the past.

The forum's work will be based on spreading the concept of best practice throughout the industry. Good practices undoubtedly exist - practical ideas and methods of work which have been found to be successful and which can be adapted by other businesses, to their own benefit. If we can search them out, we can show the industry how to become more productive. In other words, everyone can learn from the best.

Why is this so important? Because our competition throughout the world is getting stronger and better, year by year. Both UK domestic tourism and overseas visitors numbers are under pressure. If we sit around doing nothing, complacent with what we have offered in the past, we shall be witnesses to a declining industry and only have ourselves to blame.

As I go around the country, I see examples of the good and the bad, at all price levels. Yes, there has been huge industry-wide investment in new facilities, but these merely enable us to keep pace with those overseas.

The industry still suffers chronic staff recruitment and retention challenges which are worse now than they were 40 years ago. It surely needs to introduce new work practices and spend more time training and motivating staff so that they match the best. It needs to invest more in improving existing facilities so that, for their grade, our hotels and restaurants and leisure attractions match the best. With many, there is a long way to go. And, it needs to adopt new developments in IT to take advantage of innovative sales and marketing techniques.

By learning from the best, the industry will be able to raise its standards to become truly world-class, and the Best Practice Forum offers a unique way of achieving this. I look forward to experiencing the results.