Research and analysis

Blackpool - connectivity and tourism case study

Published 17 October 2022

1. Executive Summary of Local Level Outcomes

In summer 2021, social researchers in Building Digital UK (BDUK) conducted a series of interviews with representatives of Blackpool Council, hotel proprietors in Blackpool and their guests. The interviewees represented direct beneficiaries of Local Full Fibre Network (LFFN) funding and indirect beneficiaries of the programme through access to an improved internet connection. The findings, presented in this report, provide valuable emerging evidence of the value of the infrastructure to the local authority and how this supports their local strategies around economic growth, tourism, public service delivery and local connectivity. It also provides strong examples of the benefit of the connectivity to those local businesses and service users enabled by the asset and sets out a clearer local picture of how the digital infrastructure project is contributing to improvements in connectivity and local outcomes. The key findings from this research are listed below and explored in greater detail in the findings. The scope of these findings is limited to potential, early and emerging benefits of the LFFN asset in Blackpool. A quantitative evaluation of these benefits is required to quantify the impact of the LFFN programme in Blackpool.

1.1 The emerging benefits of LFFN funded infrastructure upgrades in Blackpool are in part due to the combination of LFFN funding and a local digital strategy.

The emerging benefits of digital connectivity in Blackpool, that are described in this report, are in part managed and directed by a  combination of LFFN investment and a targeted local digital strategy. The ‘Digital Vision’, developed by Blackpool Council, charts the planned digital upgrades in their local area. It takes into account the increasing number of local digital assets, how digital investment can be leveraged to increase economic growth and improving the international competitiveness of Blackpool whilst serving the needs of all residents. A digital strategy has been vital for ensuring the socio-economic benefits of the LFFN fibre upgrade are measurable, monitored and beginning to be achieved. Benefits and subsequent outcomes are closely tied to the simultaneous upgrade of local infrastructure such as transport and public health.

1.2 The asset re-use model is a viable method of FTTP delivery in Blackpool.

There is emerging evidence that the LFFN asset and cooperative model delivery method in Blackpool has had tangible monetary, learning and connectivity benefits. The asset re-use model uses assets owned by the public sector to stimulate the market to increase the supply of Fibre-to-the-Premises (FTTP) connectivity. The model has provided monetary savings on the cost of upgrading areas compared to the traditional commercial procurement. Furthermore, the cooperative model adopted has provided a beneficial support structure to the delivery of FTTP connections and promoted a culture of collaboration between the local authority, suppliers, residents and businesses. Evidence is beginning to emerge that the LFFN asset in Blackpool has begun to stimulate the broadband market. This could enable benefits to the local area of bringing digital jobs to Blackpool.

1.3 LFFN funded connectivity upgrades can improve hotel productivity.

Hotel proprietors benefitting from LFFN enabled connectivity improvements at their hotels in Blackpool reported greater efficiency in running their businesses. The ability to use digital technology in business admin processes such as booking apps to communicate with customers has reduced the amount of time spent undertaking admin processes. The adoption of digital technologies to run hotels was enabled by the fast and reliable internet connection and has supported other UK businesses. In addition, the use of digital technologies and automated systems increased efficiency has led to a reported reduction in errors such as double bookings. These measures improved the customer experience.

1.4 The LFFN programme has enabled opportunities and investment that has the potential to provide local economic growth.

The establishment of the Digital Nomad Hotel can be directly attributed, in part, to the LFFN programme and the local authority’s support through their digital strategy. LFFN upgrades have brought the ability to establish a business that is based on fast and reliable internet in Blackpool. Collaboration between the local authority, businesses and academics following the upgrade have encouraged the establishment of digital, data and technology companies in Blackpool, with an emphasis on green technology. An example of recent investment in connectivity is the Winter Gardens Conference Centre in Blackpool.  A potential long term consequence of the growth in digital opportunities these bring is a diversification of the local economy and a reduction in the ‘brain drain’ to cities such as London as local residents can find skilled, professional jobs in their local area.

1.5 Demand for fibre connectivity in the hotels we interviewed is primarily driven by customer connectivity expectations.

Society has undergone a digital transformation in which digital infrastructure has become increasingly important in facilitating daily life. With this, customer expectations have shifted towards an expectation that there will be fast and reliable internet at a hotel. Furthermore, demand and usage of the internet by owners and customers has risen in the last 20 years. This is reflected in multiple hotel proprietors reporting that previous internet connectivity had become insufficient in serving their own and their customers’ connectivity needs as increased demand and usage of digital devices had left several proprietors reporting slower internet speeds, less reliability and internet blackouts at times of peak usage before their upgrade.

1.6 Fibre upgrades have facilitated the adoption of new smart technologies in hotels.

Since the hoteliers that we interviewed were mostly run by individuals or couples, the time saved through admin efficiencies combined with a fast and reliable internet connection facilitated the exploration of other ventures that were previously too time consuming such as the adoption of smart technology in hotel rooms. There was a range in the type of smart technologies adopted by hotels such as voice activated lights to virtual assist technology in every hotel room. This reflected the ranging priorities that different hoteliers had.

1.7 Following the upgrade the hoteliers we interviewed reported increased customer satisfaction.

For all of the hotels that we interviewed, those that benefited from an LFFN enabled connectivity upgrade from a previously slow and unreliable connection had received very positive feedback from their customers. This is important as one hotelier described repeat customers as essential to their business due to the reliance on weather and subsequent uncertainty of the tourism industry. Furthermore, one hotel stated that the new upgrade had become a central part of how they advertised their hotel.

1.8 The impact of Covid-19 is complex and monitoring the take up of gigabit-capable internet offers an opportunity for LFFN to inform other BDUK products.

There is no simple way to characterise the impact of Covid-19. The rise of the ‘staycation’ and subsequent increase in domestic tourism in Blackpool provided periods of high demand. However, long periods of uncertainty and closure made business planning difficult. The timing of the internet upgrade could also have an impact on whether businesses were able to capitalise on their improved connectivity due to repeated closures due to Covid-19 causing one hotel to have an extended period between installation and use.

1.9 There have been wider community outcomes beyond lowering cost of connection following the LFFN programme upgrade.

In Blackpool’s LFFN bid, one of the key focuses was using the infrastructure to revolutionise tourism. Measures taken to revolutionise their tourism include using fibre to create a ‘smart promenade’. Beyond improvements to the immediate tourist experience the wider community has benefitted from transport upgrades, connecting schools and a digital transformation of the health economy. To increase the benefits of the LFFN funded infrastructure upgrade to the wider community, conversations have begun around skills in education.

2. Background on Blackpool

2.1 The Blackpool LFFN Project

The LFFN programme used several demand aggregation methods to stimulate local delivery of lightning fast, gigabit-capable infrastructure. The Programme chose areas based on a Challenge Fund of business cases and the ability for these to set out how the intended project would address market challenges and lead to improved outcomes in the area enabled by better gigabit-capable broadband availability.^{[footnote 1]} The LFFN Programme was delivered in 3 waves so that it could learn from preceding projects and fully test the range of different approaches in different areas of challenge. The Programme prioritised projects that had a clear link to addressing local areas of slow internet speeds or unreliable connection. In 2018 Blackpool local authority was awarded £3.1 million to deliver gigabit-capable infrastructure as part of Wave 2 funding.^{[footnote 2]} Using the Tameside LFFN project as a precedent, they used the Public Sector Asset Re-use (PSAR) delivery method.^{[footnote 3]} The PSAR ‘Thin Layer Model’ was used in order to commercialise spare capacity in the ducts and the data centre, making this available to the telecoms market to expand gigabit-capable infrastructure into local areas.The project involved the installation of over 50km of fibre optic cable (spine) and delivery of the asset was completed in early 2021. The hotel proprietors interviewed represent successful commercial take-up following LFFN funding.

Interim evaluations have been published on LFFN Wave 1 projects.^{[footnote 4]} However, this study represents an opportunity to gather early localised findings on the source of demand for gigabit-capable internet, how the improved connectivity is being used, barriers to full utilisation and the benefits of fibre connectivity to the local area. Using the LFFN benefits evaluation framework, this research will contribute towards evaluating the impact of LFFN and inform the delivery of future localised BDUK products.

2.2 The Challenges Facing Blackpool

Blackpool faces a number of social and economic challenges. The majority of Blackpool falls in the most deprived areas according to the index of multiple deprivations and has subsequently been identified as an area in need of ‘levelling up’.^{[footnote 5]} This section will briefly explore some of the challenges facing Blackpool and provide further context to the LFFN intervention. Socio-economic context is vital to understanding the potential benefits, risks and opportunities that improved connectivity may bring.

Graph 1a and 1b: Economic Performance - Blackpool vs National Averages

Graph 1a (top graph) shows the percentage of individuals with at least NVQ4 education compared to the national average, which remains much lower for Blackpool (pink line) than the national average. Graph 1b (bottom graph) shows unemployment of economically active individuals in Blackpool compared to the national average.^{[footnote 6]} Whereas this has dropped below national averages in 2021, this has returned to above in 2022.

Both of these indicate Blackpool is a city that could still benefit from further investment in jobs, skills and people. Digital skills and high quality digital jobs have the potential to unlock economic growth in Blackpool, and the LFFN Project should have provided improved accessibility to gigabit capable infrastructure to enable this.

3. Background on Research Project

3.1 Research Aims and Objectives

The aim of this case study was to understand more about the ways in which Blackpool is using improvements in digital infrastructure and connectivity locally to drive local area benefits. This research may be used to help with the design and delivery of further BDUK local level projects and indicate where lessons can be learnt on mitigating barriers to realising benefits, avoiding disbenefits and duplicating success.

To achieve this objective we will assess the evidence for how connectivity is being used in relation to the BDUK benefits framework. The benefits framework includes 5 key benefit areas. These include:

• driving growth in the economy

• enabling public sector efficiency

• reducing the digital divide and providing public sector value

• reducing impact on the environment

• stimulating the broadband market

For the purpose of this case study, we will be focusing on the indirect outcomes of the Blackpool LFFN project that rely on the take up of FTTP connectivity. The benefit areas that we primarily explored in this research are driving growth in the economy and providing public value. Table 1 explores the relevant benefit areas in more detail.

Table 1: Excerpt from the BDUK Benefits framework

Benefit area	Specific areas of benefit investigated
Driving growth in the economy	Local economic growth: • the establishment of new businesses • increased business productivity (and employee productivity) • business Innovation (development and promotion of new/evolved products, processes and services online across wider geographical markets)
Providing public value	Social effects: • improved communication, entertainment, shopping and  learning • population demographic changes (economic migration) • improved quality of life and wellbeing

Source: LFFN Benefits framework (2018)

3.2 Research Methods and Limitations

The evidence compiled for this report includes:

1. Semi-Structured Qualitative Interviews with Key Project Stakeholders and Indirect Beneficiaries:

Analysts in the BDUK Analysis and Evaluation team conducted 8 interviews in Summer 2021 to understand how the LFFN asset was being used by:

• hotel owners in the local area
• the local body to improve outcomes for residents and businesses

Stakeholders interviewed included:

• representatives of BlackpoolCouncil

  • Finance and Commercial Director
  • Head of ICT Services and Digital Strategy Lead
  • Business Analyst Manager
• the developer of the BLP transport app
• hotel and BnB owners based in Blackpool that had recently upgraded their internet connectivity
• guests staying at hotels with recently upgraded internet connectivity

2. A Review Project Documentation

Documentation held within BDUK that describes the design and operation of projects. This includes the business case, project proposal and management information collected by BDUK.

4. Research Methodology

This case study took a deductive logic, with the benefits framework, as shown in Table 1, providing the basis from which topic guides were developed for the semi-structured interviews. Semi-structured interviews were chosen as they facilitate rich exploration of participants’ experiences using improved connectivity. Furthermore, the flexibility provided by interviews enabled BDUK social researchers to explore new and unexpected benefit areas. The interviews were conducted in person in Blackpool and in spaces and venues that were familiar to participants. This ensured the environment was comfortable and accessible for all participants.

The analysis of interviews was done through manual thematic coding, with analysts in BDUK extracting key themes and concepts. The ontology of the research was that of critical realism, with findings reflecting observable characteristics constructed from the perspectives and experiences of interviewees.

4.1 Sampling

This study used strong working relationships between BDUK and Blackpool Council through purposive sampling. Purposive sampling is characterised by researchers’ judgement about which potential participants will be most informative. This sampling technique was chosen because it is time and cost efficient. The choice of purposive sampling aligns with the purpose of this case study in providing early and emerging findings rather than a generalisable statistical study.

The local body acted as a gatekeeper identifying hotels and guest bedrooms recently connected to gigabit-capable infrastructure. The use of a gatekeeper was beneficial in this study as the local council had long-established relationships with the target population and could, therefore, aid with identifying and recruiting participants.

The sampling criteria was defined at the outset of the project in consultation with the local body. The resultant interviewees reflect the aim of BDUK to understand how the improved connectivity provided through the LFFN asset is being used by indirect beneficiaries in the tourism sector. BDUK analysts interviewed contacts in the local body involved in the delivery of LFFN and in the use of the LFFN asset. This was combined with interviews of four hoteliers and various hotel guests.

A consequence of utilising purposive sampling and gatekeepers is that the resulting findings can have a limited perspective. This is compounded by potential volunteer bias that can arise from the difference between the interviewed volunteers and the non-volunteers. To mitigate the risk of over generalising these findings we have gone into further detail on the limitations of this case study in section 4.2.

4.2 Limitations of the Study

Representativeness

Blackpool has approximately 69,000 hotel and guest bedrooms.^{[footnote 7]} This case study does not aim to and will not represent the perspective and experiences of all hoteliers in Blackpool. The interviewees reflect the experiences of a limited number of hoteliers that are early adopters of gigabit-capable connectivity enabled by the LFFN programme. Due to the small sample size, these findings should be used to infer potential and emerging benefits that can be monitored and investigated in future socio-economic evaluations.

Generalisability

There is variation in the size, scope, rurality, delivery method and socio-economic status of LFFN projects. The extent to which this may be applicable to other LFFN projects is limited and will vary. The use of asset re-use as a delivery method in Blackpool may not be replicable in other local areas, in particular rural areas. As BDUK increasingly seeks to connect hard to reach areas, asset re-use projects may not be suitable as they require existing infrastructure such as CCTV cameras and lampposts. The infrastructure required is more likely to be present in urban areas. Further case studies exploring the experiences of those in rural localities could add to this evidence base.

Attributing Outcomes

This case study cannot and does not aim to establish causality between the outcomes described and the LFFN intervention. The paper assumes that the presence of the LFFN asset has contributed to the outcomes described by interviewees.

4.3 Ethical Considerations

This project followed the standards set by the ESRC research ethics framework and the six principles of ethical research. The main ethical risk during this project was ensuring we recieved informed consent from participants. To mitigate the risk of participants not giving informed consent, the analyst team provided both gatekeepers and interviewees with information on the purpose of this research project prior to meeting and reiterated again prior to the interview:

• the purpose of the research

• the role we as researchers will play and our background

• what taking part would entail

• the rights of participants over their participation and information

• what we intend to use their data for

• how we will store their data and for what time period

5. Research Findings: Local Level Outcomes

The findings section of this report explores the impacts and benefits referred to in the executive summary in greater detail. The findings take a holistic approach to demonstrate how all of these characteristics of Blackpool’s LFFN project came together to create local level outcomes. This section also provides suggestions on how future connectivity outcomes can be measured and lessons learnt that can be applied to future BDUK products. Given the limited number of interviews conducted, these findings should be interpreted as potential and emerging benefits of improved connectivity experienced by early adopters of gigabit capable connectivity in Blackpool.

Demand for fibre connectivity in the hotels we interviewed is primarily driven by customer connectivity expectations.

It’s not the case of do you need fibre, it’s you know, can you afford not to have it?

- Proprietor of Arlingtons Hotel

This statement from the hotel proprietor of Arlingtons Hotel demonstrates the shift in customer expectations towards seeing good connectivity as a requirement rather than a luxury. One hotel owner faced repeated complaints by regular customers about the slow internet on the old connection during times of peak usage. The importance of fast and reliable internet connection is reflected in proprietor recollections of customer enquiries about internet speed prior to booking their stay.

The first thing they get asked when guests arrive is “Where can I park my car?” And second “What’s the code for the wifi?

- Proprietor of Arthingtons

The importance of good connectivity in hotels in Blackpool is not fixed, but varies by business model and target demographics. For the Digital Nomad Hotel, which offers long term stays to professionals seeking to work remotely in a new location, a strong internet infrastructure is critical.

I asked if the room was alright and she said “as long as the internet works, I don’t give a ‘[expletive]’

- Proprietor of Digital Nomad Hotel

Researchers from BDUK interviewing guests at the Digital Nomad Hotel

The customer driven need for fast, reliable internet was further supported by direct customer testimony. A guest at the Digital Nomad Hotel stated: “my first question (when enquiring about the hotel) was, how fast is the internet?” A variation of this type of statement was stated by all hotel customers that we spoke to staying at the Digital Nomad Hotel. However, these customer testimonies are likely not representative of the ‘traditional’ hotel guest seeking a place to primarily go on holiday rather than work. The Digital Nomad Hotel guests likely represent some of the most digitally focused customers as they will require a fast and reliable connection to facilitate their working life.

The increasing use of digital platforms to serve the administrative needs of hotels has also left several hotel proprietors finding their internet connection insufficient. At one hotel the speed was previously sometimes insufficient for certain basic admin tasks, such as using a card machine. This was because card machines need to connect to the internet to communicate with banks. The subsequent extra administrative burden is seen within proprietor testimony, with at least one proprietor having to walk around the building until they found a spot where they had connectivity or asking customers to pay at a later date.

You may ask why does this matter? Understanding the source of demand for fibre connectivity is especially important when considering the impact of demand-side BDUK products. This is because the greater our knowledge of both public and private sector demand for fibre broadband, the more effectively that we can target our interventions.

LESSON LEARNT - To understand the impact of connectivity researchers must assess why demand exists for gigabit-capable connectivity and how improved connectivity can increase productivity. For businesses in Blackpool LFFN enabled fibre connections clearly served the connectivity needs of both hotel owners and their customers. This relates to the benefit area ‘Driving Growth in the Economy’.

The asset re-use model is a viable method of FTTP delivery in Blackpool.

Early evidence indicates that the asset re-use model of fibre delivery through a cooperative has been successful in Blackpool as it provided monetary savings in the rollout of fibre infrastructure, used existing local resources and provided a support structure for delivery.

The process involved reinventing their own assets rather than the traditional method of spending on the wider area network. This has provided Blackpool with monetary savings.

There have been further unique benefits to being a part of the cooperative model including:

• brokering agreements

• exchanging information

• preventing overbuild

• suppliers working in collaboration, not competition

However, there are also many considerations when it comes to allowing suppliers to join the cooperative. For example, the interests of local residents and suppliers seeking to join the cooperative may not align. Measures have been taken by Blackpool local authority to minimise the disruption to local residents through digging and building works and prevent overbuild by suppliers. The local body has a role in developing new build projects through collaboration with suppliers that have a proposed project. Testimony from the local authority has suggested that this has reduced the number of infeasible projects put forward for consideration. An unexpected benefit of this approach was the development of a culture of “collaborating instead of competing” as the local authority has taken on a problem solving role when the interests of residents, businesses and residents have not aligned.

The suitability and extent to which the success of asset re-use in Blackpool can be replicated in other areas is questionable. The need for local assets such as CCTV cameras in local areas receiving an upgrade using the asset re-use model may make the FTTP asset re-use delivery method more suited to urban areas compared to rural areas.

CCTV mast with gigabit-capable connectivity

When considering the benefits of a particular delivery method we must consider how it is used in practice. The connection of the hotel Hillary by the Sea to fibre is a result of BDUK products working in combination. The combination of LFFN and vouchers made the fibre connection financially viable for at least one hotel.

Had it not been for the government grant to help me out a little bit with it. It would not have got done.

- Hilary, Owner of By the Seaside

LESSONS LEARNT - The asset re-use model of fibre delivery should be considered by other local authorities that have significant existing assets and resources that could be upgraded. When assessing the impact of BDUK interventions further research on how BDUK products interact with one another could be of use to establish how they are being used in practice.

The emerging benefits of LFFN funded infrastructure upgrades in Blackpool are in part due to the combination of LFFN funding and a local digital strategy.

LFFN funding was used in Blackpool alongside a local digital strategy. The Blackpool digital strategy or ‘Digital Vision’ is a nine year roadmap of the planned digital infrastructure upgrades that are tailored to the needs of the local area. This is in combination with a plan on how to realise the full social and economic benefits of improved connectivity. The ‘Digital Vision’ coordinates investments from multiple sources to maximise the economic benefit to the local area, including the DCMS LFFN investment, the installation of the North Atlantic Loop, a subsea fibre-optic cable connecting the UK to New York and mainland Europe in Blackpool and infrastructure upgrade funding awarded as part of the Government’s Towns Fund. The digital strategy places emphasis on digital inclusivity, reducing the digital divide and empowering citizens to ensure opportunities are accessible to all.

Blackpool’s ‘Digital Vision’ infographic

In the LFFN bid, one of the key focuses for Blackpool was using the infrastructure to revolutionise tourism. Examples of planned/completed development include:

• a Smart Promenade enabled by free public wifi across the tramway

• a ‘Resort App’ and complimentary ‘Resort Pass’ that will use data to enhance the experiences of residents and visitors

• enabling digitally reliant businesses such as the Digital Nomad Hotel in the tourism sector and beyond this businesses such as data centres and fintech

A specific innovation worthy of further assessment is the ‘Resort App’ which has been developed with inclusivity in mind and tailors the tourism experience through utilising travel patterns and creating social travel maps. An upcoming E-Voucher feature will allow targeted advertising and drive further growth in the local economy based on places tourists visit.

What unites all of these developments is the aim of driving growth in the local economy, The targeting of interventions can make them more effective, with tourism a significant industry in Blackpool. In the year 2018 the value of Blackpool’s tourism industry increased 4% to £1.58billion compared to the year before.^{[footnote 8]}

It is predicted that the positive effect on tourism through enhancing the guest experience will have a knock-on effect from a levelling up perspective and become an example of how digital growth can drive the economy. The success of the targeted investments and innovations should be measurable in multiple metrics. These include the creation of digital jobs in Blackpool, increased demand for fibre in hotels as more hotels experience the benefits of an improved connection and a growth in the number of national and international tourists following an improvement in visitor experience.

LESSON LEARNT - Government interventions should be combined with a local connectivity strategy that is rooted in the needs of the local area for a local area to realise the full benefits of a fibre connection when taking a place-based approach to improving national connectivity.

RISK - Tailoring connectivity investment to the needs of a local area is important for realising the full benefits of improved connectivity. The presence of a local digital strategy in Blackpool ensured local knowledge was combined with the BDUK intervention. This learning could be of use in any programme taking a place based approach.

LFFN funded connectivity upgrades can improve hotel productivity

To understand how access to gigabit-capable broadband can lead to improvements in business productivity we must consider how the internet is used in hotels. The description provided by the proprietor of Arlingtons, an 11 bedroom hotel, echoes common uses stated by the owners of other small hotels that we interviewed. The internet at this hotel was used for both business and personal use. For example:

• sending and receiving emails

• guest wifi use

• using an internet booking system

• looking after their web page

• maintaining a social media presence

• enabling the use of smart TVs and virtual assistants in hotel rooms

• ring smart doorbells to enable them to see guests arriving even when they are out

• using virtual platforms to keep in touch with family and friends through the the pandemic

Following the upgrade to gigabit-capable internet, there has been a digitalisation of both Arlingtons’ business and the customer journey. Processes previously done via telephone such as room booking are now done over the internet. The use of a booking app in particular has increased efficiency as the app used also increases the speed of communication compared to traditional means such as telephone. The belief that the digitalisation of business processes has improved productivity was also expressed by hotel owner Hilary, who stated that the business operated more efficiently as less time was spent doing administrative tasks.

Furthermore, the use of digital platforms and automated systems reduced losses through error. One hotel owner described how digital platforms provide a form of customer vetting as it can spot unusual behaviour much sooner than using traditional modes of communication. The real-time updates provided by a gigabit-capable connection was also reported to have reduced double bookings causing further administrative efficiencies.

Looking beyond hotels, productivity benefits to hotels arising from a gigabit-capable connection derive from time saving and possible subsequent technological innovations. There is scope for improved digital connectivity to have a real impact on productivity in Blackpool, with Blackpool’s GVA per hour worked 27.1, whilst the national average was 35.2 in 2019.^{[footnote 9]}

It should be noted that the benefits of improved connectivity are already reflected in an immediate improved customer experience and a reported longer term increased turnover from a growing number of repeat customers. These benefits are limited to the individuals that we interviewed. However, since all of the hoteliers that we interviewed were small family businesses, many of the productivity benefits deriving from an improved connection were personal, including reclaiming time in their day and facilitating more time spent doing leisure activities.

LESSONS LEARNT - A gigabit-capable connection, when used by hotel owners, can increase business productivity and enable hotel innovation.

The LFFN programme has enabled opportunities and investment that has the potential to provide local economic growth

The opening of the Digital Nomad Hotel is an LFFN success story as it exists in part because of the investment in fibre broadband in Blackpool. The proprietor, Duncan Ridgley, attributes his decision to locate in Blackpool in part due to the connectivity benefits of the LFFN programme.

I saw the opportunity… I read about the three million and that was a big part of it, hearing about BDUK’s £3 million investment in fibre infrastructure

- Duncan Ridgley, Proprietor of Digital Nomad Hotel

Fast and reliable internet is essential for the Digital Nomad Hotel as its business model relies on attracting ‘digital nomads’ and providing an experience that results in long stays. Digital nomads are “people who choose to embrace a location-independent, technology-enabled lifestyle that allows them to travel and work remotely, anywhere in the Internet-connected world” (BBC Remote Control, June 2021). The importance of fast and reliable internet is demonstrated in the fact he has a back up connection in case the internet falters for his customers to ensure there is no disruption to their service. This venture has been viewed as a success as the owner is looking to expand by franchising the business.

The economic impact of the establishment of hotels like the Digital Nomad Hotel in Blackpool may vary from that of a traditional hotel. In contrast to the traditional hotel model that hosts those seeking short term holiday stays, they seek to attract professional customers requiring long term stays. Since these customers are living in Blackpool for extended periods and how they interact with other local businesses likely differs and thus, further research is required to understand the local economic impacts of the digitally enabled businesses such as the Digital Hotel.

Semi-structured interviews with customers at the Digital Nomad Hotel indicate that the longer stays for digital nomad customers enables the benefits of tourist expenditure to be spread further afield than traditionally popular day trip areas such as the beachfront and promenade. A customer at the hotel, Jennifer, refers to her choice of Blackpool stemming from its ideal location and proximity to other areas such as the Lake District, Peak District and Wales to facilitate her love for hiking. For the customer, Kia, the ability to explore her love of roller coaster riding was a major benefit of staying in Blackpool. The testimony of hotel customers points to a wider need for a good transport infrastructure to facilitate the expansion of the beneficiaries of tourism beyond the main attractions.

It’s [Blackpool] a very strategic place to go to, for the hikes and also not far from Liverpool.

- Jennifer, guest at the Digital Nomad Hotel

There are unintended economic benefits stemming from the increasing digitisation of hotel administration. For example, the automotion of booking processes at Arlington Hotel led to the support of other digital UK businesses through the use of a Glasgow-based booking app. A further example of increasing digitisation is the Winter Gardens Conference Centre that has the latest audio and visual technology and can host thousands of connected users at one time.

Blackpool Winter Gardens Conference Centre

There is emerging evidence that the competitiveness of Blackpool from an investment perspective and its ability to attract investment beyond the tourism sector has improved following the LFFN investment. One of the most substantial build outs from an LFFN asset was from the tramway south of the town. The establishment of the City Enterprise Zone at the airport and subsequent interest from digital companies and data centre companies can be directly related to the presence of local LFFN enabled fibre connectivity and the international fibre from the intersection of the transatlantic fibre cable in Blackpool. The increasing competitiveness of Blackpool in the digital, data and technology industries is not purely a by-product of the LFFN asset, but a purposeful direction underpinned by the local digital strategy.

Transatlantic fibre cable in Blackpool

There is an emphasis on promoting Blackpool as an opportunity space for digital enterprises to innovate and develop green technologies. One of the most recent partnerships developed by Blackpool Council was an ‘Innovation Catalyst’ with Lancaster University. The Innovation Catalyst brings together key stakeholders in connectivity in Blackpool with academics and aims to combine fibre and renewable energy assets to build an ecosystem around ethically powered data, ultra low latency, energy storage and energy reuse through collaboration.^{[footnote 10]} It is expected that these partnerships will drive further growth in the economy in the coming years. An important by-product of the promotion and investment in green technology in Blackpool could be a diversification of Blackpool’s economy over the next 5 to 10 years.

Potential outcomes as a result of the increased competitiveness of Blackpool as a prospective place to establish a digital business in the long term include:

• a reduction in the ‘brain drain’ (the loss of highly skilled residents to areas such as London)

• local economic growth

The impact of economic growth on the local area could include an increase in the number of businesses operating in Blackpool, an increase in average wages and reduction in unemployment. The lack of retention of skilled professionals in areas like Blackpool is a real issue that is seen in the working age population with high level (NVQ4 and above) qualifications over 10 percentage points lower than the national average.^{[footnote 11]} Benefit metrics that could be used to monitor this emerging benefit include gross value added (GVA) and the local unemployment rate. To establish a causal relationship, a rigorous study, ideally including counterfactual analysis, could be undertaken.

However, there is a risk that the benefits of economic growth will not be shared across the local area. A consequence of a lack of access to digital opportunities could be rising local inequality. To mitigate this risk, the Blackpool digital vision includes an emphasis on digital skills in primary and secondary education.

LESSONS LEARNT - There is emerging evidence that Blackpool has successfully leveraged their improved connectivity to attract investment in the local area.

To capture the full benefits of investments in digital infrastructure across a local area in the tourism sector, a strong local transport infrastructure is vital.

RISK - Increasing inequality in the local area if the emerging opportunities are not accessible to local residents.

Fibre upgrades have facilitated the adoption of new smart technologies in hotels.

A consequence of the improved connectivity in the hotels that we experienced was the ability to support various smart technologies such as smart televisions, virtual assistants and voice activated light technology. The type of technology that was adopted ranged and was dependent on the ambitions of the hotel owner. The ambitions of hoteliers that we interviewed ranged from enabling guests to download and stream films in their hotel rooms to supporting multiple working professionals requiring a fast and reliable connection. This finding can be viewed as related to the finding that there was an improvement in business productivity following the installation of the upgraded fibre connection. This is because the increased efficiency of business administration, following the digitalisation and automation of some processes, was said to have freed up more time for exploring and introducing new technologies by one hotelier that we spoke to.

However, there is testimony that indicates regardless of hotel digital ambitions, access to fast and reliable internet have led to an improvement in proprietor digital literacy following their upgrade. Knowledge of broadband terminology also ranged from centring around the terms of ‘fast’ and ‘slow’ to specific speeds and the capabilities of those speeds for hotel owners. This is supported by one hotelier describing themself as “not a big internet person”. Despite this, the switch to fibre has enabled the adoption of new smart technology in the form of a virtual assistant ‘Alexa’ in hotel rooms. When looking at the benefits framework, the growth in hotelier use of smart technology could drive growth in the digital economy. To measure any economic benefit from this, an economic impact study focusing on spending could be used.

LESSON LEARNT - Smart technologies have become more accessible to hotels following the LFFN programme funded improvement in connectivity.

Following the fibre upgrade the hoteliers we interviewed reported increased customer satisfaction.

Prior to upgrading their internet connection, Hilary, the owner of By the Seaside, faced repeated complaints by regular customers about the slow internet on the old connection during peak times. The improvement in customer satisfaction following the upgrade is particularly true for Hilary, who told us of extremely positive feedback on the fibre connection, with one guest describing the experience of using their new connection as “superb”.

I don’t think we’ve had one complaint since we upgraded.

- Mrs Fazakerley (Co-owner of Arthingtons Hotel)

The importance of positive feedback is particularly important for small hoteliers, with one proprietor stating that they rely on regular and repeat customers, who they have built a strong rapport with, to sustain their business. The growing importance of wifi and subsequent rising of customer expectations is likely related to the growing digitalisation of our daily lives.

The improved connection has enabled By the Seaside hotel to expand their customer base to include those on corporate trips who require fast and reliable internet. The upgraded connection now forms part of how they advertise the hotel. Therefore,

LESSON LEARNT - Fast and reliable internet has improved the customer experience in the hotels that we interviewed.

The impact of Covid-19 is complex and monitoring the take up of gigabit-capable internet offers an opportunity for LFFN to inform other BDUK products.

The impact of Covid-19 on the hotel proprietors that we interviewed in Blackpool was complex, varied and is only beginning to become apparent. The extended periods of closure due to Covid-19 restrictions meant that there were periods in which few visitors were staying at multiple hotels that we interviewed beyond essential workers. Subsequently, one hotel did not initially test the capabilities of their upgraded internet connection and receive the benefits associated with improved connectivity. Although Covid-19 may have increased the reliance on digital technology for some sectors and industries, the impact on tourism was incredibly mixed due to periods of closure combined with influxes of tourists following the easing of restrictions.

Like everyone in this industry we were closed for 11 months so severely impacted and then obviously now you’re open, you’re going 150 miles an hour!

- Co-owner of Arthingtons Hotel

The growth of the ‘staycation’, a holiday spent in an individual’s home country, following the introduction of international travel restrictions was seen in both the testimony of hotel owners and increased foot traffic in the area. The newly developed tourism app has allowed Blackpool to measure the tourism boom over the summer of 2020. Blackpool Council are measuring patterns in bus and tram use through the BPL Transport app. The introduction of the BPL Transport app is part of a wider move towards digitising Blackpool’s transport sector. The app can be used to purchase bus and tram tickets in the form of QR codes that can be scanned when boarding. The data on when and where individuals use the QR codes can be aggregated to provide live information on emerging travel patterns. This provides travel information quicker than traditional measures of transport usage, such as the Department for Transport’s Public Service Vehicle Survey. High usage of the BPL Transport app could enable Blackpool Council and bus operators to tailor services to the requirements of customers.

It’s just bookings coming out of your ears.

- Hotel proprietor of Arlingtons Hotel

A hotel proprietor described how a surge in bookings due to the increased demand for domestic holidays placed extra pressure on their previous wifi connection. The increased usage highlighted the inadequacy of the connection prior to the LFFN enabled upgrade. The growing digitalisation of our lives led to this hotel finding their existing connection inadequate during periods of increased usage. The experience of this hotelier could be replicated across other hotels that currently do not have access to a gigabit-capable connection as we emerge from restrictions. Continuing to monitor demand and take-up of gigabit-capable connections in Blackpool following their LFFN enabled upgrade is key to informing other BDUK demand-side products.

Covid-19 has also changed how some hotels function, with one hotel stopping single night stays due to the cost of the increased cleaning required following a stay. However, once again the impact of Covid-19 is mixed as the change in business behaviour towards endorsing remote working and the emergence of digital nomads has provided opportunity for one hotel.

With COVID, I had the opportunity to live [and] to work anywhere in the UK.

- Jennifer, Digital Nomad Hotel guest

This testimony echoes the experience of other digital nomads interviewed, with more remote jobs accessible than ever before. Discussions with proprietors of the small hotels that we interviewed indicate that the impact of Covid-19 was personal and not homogenous across the sector.

LESSON LEARNT - The impact of Covid-19 on the tourism sector in Blackpool is still emerging and evidence so far indicates experiences were mixed, with the pandemic bringing both challenges and opportunities.

Sector specific demand for a gigabit-capable connection may vary and within this the challenges and opportunities facing SMEs may vary from that facing large companies.

RISK - Knowledge, awareness and accessibility of BDUK upgrades and products is required for a successful take up of a gigabit-capable connection by customers.

There have been wider community outcomes beyond lowering cost of connection following the LFFN programme upgrade.

The ‘Digital Vision’ proposed by Blackpool Council placed an emphasis on inclusion to ensure that the connectivity benefits of an improved connection is shared across local residents and businesses. Below are examples of planned and completed infrastructure upgrades that have improved both visitor and community outcomes and experiences:

• upgraded public address system that facilitates Covid-19 announcements to the community

• connecting schools

• car parks connected with fibre connectivity

• CCTV upgrade from analog to IP based technology

• linking the LFFN Asset with the Trust to connect their health economy

• live departures at tram stops

• wifi enabled tram stops

Blackpool tram stop that has wifi

At the core of enabling all residents and businesses in the local area to benefit from the LFFN programme was making the LFFN asset available in the co-operative to enable additional build in the local community. Looking beyond the availability of a gigabit-capable connection, it is vital to monitor take up of fibre connectivity and accessibility to ensure that there is not a growing digital divide.

LESSON LEARNT - Wider socio-economic benefits cannot be assumed to occur following the installation of fibre. Rather, the LFFN asset must be managed in accordance with business and community needs.

RISK - That the full benefits of the LFFN asset are not realised across the whole community. Monitoring of take up and accessibility is required to mitigate this risk.

6. Conclusion

Early insights from the Local Full Fibe project in Blackpool has suggested the fibre asset has functioned as an enabler of further developments in connectivity, tourism, the local economy, transport, public services and infrastructure. The examples provided in this report suggest that the local authority’s ability to leverage the LFFN fibre asset and connectivity to provide public value and drive growth in the local economy is directly linked to the digital strategy or ‘Digital Vision’ that maps the digital needs of local residents and businesses and areas of opportunity. Quantitative monitoring of the expected benefits of the LFFN programme in Blackpool would be beneficial to mitigate against the risks of a lack of shared prosperity across the local area and a digital skills gap.

The hotel owners and guests interviewed as part of this research have indicated that fast and reliable broadband has become vital for the functioning and future of their businesses. As indirect beneficiaries of the LFFN asset in Blackpool, multiple hotel owners have now been able to adopt smart technologies and improve their business productivity. Testimony from both business owners and their guests has indicated that the availability of fast and reliable broadband has also resulted in greater guest satisfaction.

The generalisability of this report to other Local Full Fibre Network projects remains limited as there is variation in the geography, existing infrastructure, local economy, delivery method and aims of other LFFN projects. However, BDUK can use these findings to further understand the benefits, impact and uses of digital connectivity and to inform other BDUK products.

7. Annex A - Research Tools

7.1 Interview Guide: Blackpool tourist sites

Introduction and consent

Thank you for agreeing to take part in this interview. The research intends to explore the impacts of gigabit-capable connectivity in the tourism sector.

We would be keen on hearing your views on the impacts of the upgraded connectivity to your business. The interview should last about 30 minutes but may be a little shorter or longer, depending on your responses.

Your participation in this interview is voluntary and you can change your mind and withdraw your data at any time during the interview or for one month after the interview has been completed. We would like to record the discussion for analysis purposes, these recordings will be used to help us with the findings of the research. The recordings will be securely stored and retained by us and destroyed at the end of the evaluation. Are you happy to proceed?

During this interview there is a possibility that some things discussed may identify your organisation (e.g any unique features as a result of the connectivity). The findings will be shared across DCMS and other government departments. Although we may want to report our findings publicly, any concerns over anonymity and confidentiality are regarded as priority. Are you happy for the name of your organisation to be used in any public facing material?

Business and role context

• Can you describe your role?
• How long have you been in the role?
• Can you describe your (insert tourist site eg cafe, hotel, BnB) ?
  • Size, amount of staff, type, amount of visitors, any unique features
• At what point did you become aware that you could upgrade your connectivity?
• How did you find out? (Source of information - word of mouth, social network websites, Government website, flyer etc)?
• Why did you decide to upgrade your connectivity?
• How does your [business] use an internet connection?
  
  • Do any of the people using your [business] rely on being able to connect to or from you?
  • How much use? How important
• What, if any, has been the impact of the Covid-19 pandemic on your organisation?

Prior connectivity

• Could you describe what you were able to do with the internet connection you had at your premises prior to the upgrade?
  • (What were you unable to do, that you would have wanted to be able to do for work, life or business development?)
• Did guests or visitors ever comment on the connectivity? What did they say?
• Was the connection speed sufficient for the tasks that your business needed to complete? If not, what type of tasks did the internet connection speed hamper or prevent?
  • Probe around administrative tasks
  • Probe around rough estimate for time wasted
• What was the impact on your organisation? Inability to provide services? Inefficiencies? Lack of flexibility etc?
• Can you estimate how much you were paying for your internet connection?
  • Package, speed, supplier

Current connectivity

• What type of connection do you have? Is this the fastest connection that is available to you?
• Can you estimate how much you are paying for your internet connection now? What is included in this package?
• What has the improved internet connection allowed your organisation to do?
  • Probe: around estimates of time saved.
• How has the internet connection supported your organisation in introducing new services or enhanced existing services?

Prompts: What is the nature of these services? What is driving these changes? How do the changes link to wider organisational priorities? Who are these services aimed at? Are any other technical components or infrastructure required to deliver these services? What has the take-up of this service been? What are the benefits of this service? Has the introduction led to any challenges or negative impacts? If enhanced, how were the activities delivered in the past? What difference has the enhanced connectivity made?

• What, if any, has the impact of the upgraded connectivity been on staff?
• What, if any, has the impact of the upgraded connectivity been for guests/visitors?
• Have there been any barriers to utilising the new connection? How have these been overcome?

Probe: around technological equipment (age, quality) preventing utilisation of connection, around staff knowledge / skills, any other barriers

• What factors have enabled you to exploit the enhanced internet connection?

Probe: around engagement, resources available,  other enablers?

• Do you have any plans to diversify the business or offer new services now that you have the new connection?

Closing

• Is there anything we have not discussed that you think is relevant?

Acknowledgements

The research reported here was carried out by the Building Digital UK (BDUK) Benefits Realisation and Evaluation Team (Demand Side Products), with special thanks to Sreemoyee Roy Chowdhury, Louise Morales-Brown and Anas Abu.

We are grateful to Tony Doyle and Blackpool Council for facilitating this research and the hotel owners and guests that participated in the interviews.

1. For more information on the LFFN Challenge Fund see the published programme prospectus. ↩

2. For more information on Local Full Fibre Network (LFFN) see published programme guidance. ↩

3. For further information on the Tameside asset re-use model, see the interim evaluation report. ↩

4. Local Full Fibre Network Programme Wave 1 – Interim Evaluation Report (2021) ↩

5. The index of multiple deprivations ranks small areas in England from most to least deprived. There are 7 domains of deprivation, which combine to create the Index of Multiple Deprivation. For more information see [The English Indices of Deprivation 2019 (IoD2019)] (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/833959/IoD2019_Infographic.pdf). ↩

6. Unemployed is defined as without work, currently available for work or seeking work ↩

7. Blackpool LFFN Closedown Report ↩

8. VisitBlackpool, “Another Year of Growth for Blackpool’s Tourism Economy” October 2019 ↩

9. This uses the measure labour productivity at the Local Authority level. For more information see Subregional productivity: labour productivity indices by local authority district. ↩

10. For more information on the Innovation Catalyst partnership see Innovation Catalyst - Blackpool. ↩

11. For more information on Blackpool’s socio-economic status see the City Factsheet for Blackpool. ↩