Tourism bosses predict £1.8 billion loss to local economy as situation reaches ‘critical’
- Credit: Archant
Tourism chiefs in Norfolk and Suffolk have given their bleakest view yet of the future of their industry – calling for more government support.
The forecast is of hundreds of job losses in tourism and venues closing in the next four months alone. These ‘cold, hard facts’ of tourist attractions losing £26m in profits and many struggling to see it even to October have been revealed in a stark report, just published.
The new report states less than 10pc of more than 2400 people employed in tourism’s peak season last year are currently still working. And as furlough support reduces, businesses fear up to 22pc of staff – more than 500 workers – will lose their jobs between July and October. The loss to the region’s economy would be £1.8 billion, the report claims.
It comes as many tourist attractions are preparing to reopen but with severe restrictions in place and having lost a season which should have begun just before Easter. The survey showed businesses are having to fork out £160,000 in total to adhere to new guidelines.
One tourist boss said the sector was “on the floor, winded, bruised...and in no shape to lead the economy back from the cliff edge.”
The bleak forecast for tourism in the region has come as a result of an intensive survey of 38 venues in Norfolk and Suffolk prepared to divulge confidential financial information and their own private business forecasts to give an accurate, overall view of just how damaged the sector has been by coronavirus.
Out of just under 50 businesses approached, some were so badly hit with losing staff, they did not want to take part. But out of those which did, a picture has been formed that shows vital government support is needed to get businesses ‘through to the other side’ into 2021.
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Ian Russell, who runs Wroxham Barns in Norfolk and chairman of Where to Go in North Norfolk, said: “Will we be able to save all businesses? No. Will everyone keep their jobs? No, all businesses will not survive and there will be redundancies.
“We need to keep businesses going so they can rehire at the earliest opportunity and keep skilled staff furloughed and off the dole.”
Andy Wood, chairman of Visit East of England and chief executive of Adnams, in Suffolk, said: “This is as realistic an assessment with what we know today as is possible.
“These businesses could be facing a nuclear winter.”
The results of the survey are so bleak it has prompted a call for action to Downing Street that urges the government to extend the furlough scheme through the winter months, to reduce VAT dramatically for the tourism and hospitality sector to just 5% and to extend loans over a longer payback period.
If not, the figures speak for themselves with the turnover of the businesses surveyed anticipating a plunge in income in 2020 by £97m. More than half the businesses in the survey did say the furlough scheme had helped stop some redundancies however also showed some 20% of the workforce, being seasonal and zero-hour labour, were exempt from the scheme.
Mr Russell said the problem was there was a ‘high degree of nervousness’ among the public with research showing a third of people who would go to a tourist attraction in the region pre coronavirus would not now visit before a vaccine had been found. Another third would only return ‘when they felt it was safe to do so.’
“We are reopening and we are going to give it our best shot but a third of our audience won’t be coming back, that is a big chunk. At Wroxham Barns, we can’t open our indoor play areas and capacity needs to be at just 30pc.
“The cold reality is that we (the sector) are on the floor, winded, bruised and running dangerously low on fuel. We are not in the shape we need to be to lead the economy back from the cliff edge. But being the optimists that we are, I believe that with some specific interventions we can fight back; we have the spirit, the self-belief and we have our loyal teams and communities on our side.”
The tourism, leisure and hospitality survey conducted by Larking Gowen researching the likely outcomes over the next nine months went out to businesses only a week ago to get the most up to date insight into the sector’s position as possible.
Chris Scargill, partner at MHA Larking Gowen, authors of the report, said: “The tourism sector is in a critical situation, it needs people to come and support it.
“These are the cold, hard facts, businesses are on a cliff edge. The local impact has not been measured before, and the numbers are quite frightening. Extrapolate these results – which in themselves represent just over 4% of the direct economic impact of Norfolk and Suffolk – and the numbers become quite scary.”
Mr Wood said: “It is completely understandable that the owners and leaders within these businesses are sending this very strong message that the hospitality sector needs specific support from government as the reopening phase is the period of maximum danger as the businesses start to spend money without any guarantee of demand being there.
“The safety nets are being taken away.” He did offer some hope, however, adding “I see the leisure and hospitality industry as very resilient and full of entrepreneurs who can innovate and develop their offers but they do need the customers there.”
To see the full report click here