Friday, March 16, 2012
Tourism businesses in Norfolk are feeling optimistic about the year ahead – but maybe once the Olympics is out of the way.
In the most comprehensive assessment of a sector which generates £2.6bn to the county’s economy, and is the single biggest employer, the EDP/Larking Gowen Tourism Business survey has found that 78pc feel positive about the future and most (40pc) believe that turnover will increase.
However, when asked to predict a decline in turnover, more than half (53pc) forecast a drop in revenue of between 6pc and 10pc.
But growth can be measured in many ways – from increases in revenue to numbers of heads on pillows, yet key to most firms’ success has been a willingness to invest – if they can get the cash to do so.
And that’s not easy.
The survey noted that a majority, 52pc, had found it either slightly more difficult to get access to bank funding in the last 12 months and 11pc had found it impossible.
But despite this, close to three-quarters of respondents said they had invested at least 5pc of their turnover back in their business – up from about two thirds a year ago.
Nearly one in five reinvested 20pc of turnover back in their business – a sharp rise on the year before.
Tightening budgets are also fuelling hopes of a boom in the staycation visitors to Norfolk this summer, but the survey also noted there was a surge in short stays (64pc), while the number of late bookings had increased by 66pc.
But not only are visitors leaving it later and making more fleeting visits, there are also signs that people are sticking to their pre-arranged budgets, and all eyes will be looking at whether they are splashing the cash as much when they do finally arrive.
Businesses, it seems were also increasingly sceptical about the benefits which the London 2012 Olympics will bring to the area.
While 40pc viewed the Games as an opportunity, 42pc felt it would make no difference at all on tourism in Norfolk, while nearly one fifth identified the Games as a threat.
The overwhelming feeling was that visitors will not come to Norfolk because it would take too long to get here and the county was simply too far away from where the Olympic action was happening.
Chris Scargill, tourism partner at Larking Gowen, and architect of the survey, said that the overall direction of travel for the industry was positive.
“The survey found that 55pc saw an increase in their turnover, and with inflation running at between 4pc and 5pc, 44pc saw an increase of between 6pc and 10pc,” he said. “About 40pc increased their profit in 2011.
“The reason I think Norfolk is doing well is that we are continually seeing investment in the product being offered, and some businesses which are suffering do not make that investment, so there may be a message in that.”
What this year’s survey also reveals is an industry that is hopeful of growth despite the still uncertain economic climate.
A remarkable 78pc of those who took part said they were optimistic about the prospects for 2012 – a higher proportion than last year.
The combination of recession, fragile upturn and good weather in recent years has seen Norfolk tourism benefit from the “staycation” trend, with foreign holidays falling a little out of fashion in favour of breaks closer to home. But what can be done to help?
The issue of VAT also drew a nuance response, most felt the biggest impact of the tax was on the bottom line with 51pc noting it reduced profitability compared to 13pc who said it reduced customer numbers.
The majority of those in the restaurant industry (31pc) favoured a 5pc rate, while those running visitor attractions or accommodation businesses supported a 10pc rate.
Businesses were also yet to be convinced by the benefits of destination marketing organisation such as Visit East Anglia, with 57pc stating it was too early to tell if they were any good for tourism.
However many, particularly smaller firms, said that they would be prepared to devote 1pc of their turnover towards funding such bodies to help promote the sector, which at 1pc of £2.6bn could be a healthy sum indeed and reinforces the point that with staycations rising, scepticism about London 2012 and little signs of government enthusiasm for a VAT cut during these austere times, the best form of support for the industry may well be locally sourced, and closer to home.
The new boss of the Castle Mall believes the shopping centre and surrounding businesses will see an upsurge in shoppers once its restaurant quarter is finished.