Leaders voice fears over a future skills shortage in East's £10bn tourism sector
PUBLISHED: 07:30 26 April 2017 | UPDATED: 17:55 26 April 2017
Archant Norfolk 2015
From the tranquil Broads to the coastal hotspots of Southwold and Cromer, the value of the tourism industry in East Anglia has topped £10bn for the first time this year. But business leaders believe the winds of change may be blowing in.
The chance of losing both high- and low-skilled EU workers post-Brexit, combined with a lack of skilled labour in the UK to replace them, could put paid to steady turnover growth in the sector, now worth £10bn a year in the region.
Accountants Larking Gowen’s tourism and leisure business survey 2017 showed 68% of firms had seen their turnover grow in 2016, with 66% anticipating further increases this year – but it also revealed waning optimism about the sector’s future.
The survey of 331 businesses in Norfolk, Suffolk and Essex – including hotels, holiday parks, museums, pubs and shops – showed 21% were less optimistic about the coming year than they had been a year earlier.
It also showed three-quarters (77%) do not think central government is doing enough to support the industry.
Chris Scargill, tourism partner at Larking Gowen, said there were concerns about the sector’s “long-term profitability”.
“There is positivity and we continue to see turnover growing in more businesses, but what is interesting is that optimism seems to be tailing off. It is difficult to know whether that is long-term.”
Concerns around staff were prominent in the survey, particularly the rise in the national living wage and the future of free movement of labour from the EU.
One in ten businesses said they were worried about a potential reduction in overseas staff caused by Brexit, while the same percentage believed a lack of skilled UK workers would leave them unable to fill the gaps.
Mr Scargill said: “The hospitality sector has a high ratio of non-UK employees. Many of them are career professional who treat hospitality as a progressive career, which in the UK we don’t.
He added that low unemployment could hamper the sector’s expansion. “Tourism is continuing to grow, and that growth needs to be staffed. It would be a shame if the lack of staff curtailed those opportunities.
“With the seasonality there are opportunities, but we are seeing a widening of the normal holiday period. People are coming all year round so we need staff all year round.”
Pete Waters, executive director of Visit East Anglia, told Larking Gowen that easy movement of economic migrants between the UK and the EU must be facilitated post-Brexit, to help the tourism sector and others maintain their flow of seasonal workers.
Around 40% of participants also said the national living wage was having a negative impact on their business. In mitigation, 22% said they may raise prices, 11% were considering cutting staff numbers and 8% said they many employ more on zero-hours contracts.
However the anticipation of the rise did not stop firms hiring, with 33% increasing their part-time staff in 2016 and 25% increasing their full-time staff.
The results of the survey, the 11th conducted by Larking Gowen, were revealed during an event at Hunters Hall in Swanton Morley yesterday with a second event scheduled at the Swan Hotel in Lavenham today.
Tourism survey 2017 – the figures
Inevitably, thoughts on Brexit were a new addition to the tourism survey for 2017.
The biggest worries for businesses around leaving the EU were increased costs such as heating fuel and petrol (28%), an increase in the costs of buying goods from abroad (27%) and a loss of consumer confidence (18%).
However, 73% of businesses believed Brexit would increase the number of UK residents holidaying at home in 2017/18 (a trend 65% expected to continue past 2018) and 49% thought it would increase the region’s number of overseas visitors.
Use of technology – for businesses and customers – is still hampered in the east by poor connectivity.
Promotion through social media is on the rise – 96% of businesses surveyed now have a Facebook account, 78% are on Twitter and 48% use Instagram. But less than half (44%) said they got good mobile phone signal where they were based and a third (34%) said their broadband speed was poor.
Keys to continuing tourism “success story”
Pete Waters, executive director of Visit East Anglia, said tourism is still a “huge success story” for local employment and the region’s economic development.
“The visitor economy looks in a good position to continue that growth, with many businesses investing considerable sums in enhancing their product, particularly in weather-proofing,” he said.
“The objectives remain to convert day trippers to stay visitors and develop the region as a year-round destination – we’re open 12 months of the year, not just 12 weeks.”
Although 73% of respondents to the tourism survey said Brexit would increase the number of UK residents holidaying at home in 2017/18 – a trend 65% expected to continue beyond 2018 – with region is still looking to broaden its international appeal.
With 2017 marking the 75th anniversary of American servicemen coming to Britain in the Second World War, Visit East Anglia has launched The Friendly Invasion campaign with Visit Norfolk and Visit Suffolk to encourage more tourists from across the pond.
Positivity from new company
Gin Wilson-North and her husband Mark are new to the tourism game but are optimistic about the upcoming season.
Their walking and glamping holiday business, MarGins, runs breaks based around walking the Norfolk Coast Path and is due to start its first season in May.
The couple, based near Aylsham, said their bookings were about a 50/50 split between East Anglian holiday-makers and tourists from elsewhere in the UK.
Mrs Wilson-North said: “There is a niche in the market for this: it is a true Norfolk experience.
“We have the most amazing country in England and it would be nice for people to explore it more, so the staycation is something we would advocate.
“People are looking for something more adventurous to do in their time off now.”
She added that while there had been no bookings from non-UK nationals yet, their website has had “interest” from overseas.
Regional firm advises flexibility
Adaptation is the key to survival in a changing tourism landscape, according to Suffolk brewer Adnams.
The Southwold-based company is moving forward with a two-pronged strategy – to increase and improve its product range, including its popular spirits, and grow its network of managed pubs alongside its 50 tenanted properties.
“We are very much a consumer-led business, and they are telling us that they want variety,” said head of marketing Victoria Savory.
“Pubs are now in competition with a broad array of businesses. The industry lines have blurred and pubs have to view themselves as a hospitality and entertainment venue.”
Adnams is also planning a major refurbishment at its flagship hospitality venue, The Swan Hotel in Southwold.
Ms Savory added: “Investment is a very relative thing. Whatever level you can do it at, investing in your product or property is very important.”