With dreams of foreign beaches dashed on the rocks of the credit crunch, many Britons are heading to seasides nearer home this year. The enforced vogue for holidaying at home promises to deliver a shot in the arm to the domestic tourism industry, which had been left behind by the boom in low-cost air travel.
Last year Gordon Brown swapped Cliff Richard’s Barbados villa, as per Tony Blair, for the pleasures of Southwold in Suffolk. The choice sought to show that he was in touch with a hard-up electorate. However, the holiday snaps looked awkward, much like the government’s relationship with UK tourism chiefs, who question why their funding keeps being cut at the expense of other industries.
But with the country on its knees, the £114bn tourism sector hopes to be seen as more than a right-on mini-break this year, as the government looks to replace lost jobs. “The traditional view has been that tourism could look after itself,” says Colin Dawson, chief executive of the British Association of Leisure Parks, Piers and Attractions (BALPPA). “But it is a very responsive industry and would react very quickly to a stimulus.”
Tourism already supports 2.7m jobs and 200,000 small and medium-sized firms, and its leaders argue that another 160,000 jobs could be created if the government took an interest. The weak pound means Britain is already more attractive for foreign visitors. But the global recession means other countries are also working extra hard to attract holidaymakers. Visitor numbers to the UK fell 10% in the first four months of the year, whereas the number of Britons travelling abroad fell 16%. VisitBritain, the national tourism agency, is facing stiff competition from Spain and France, as well as long-haul destinations such as New Zealand and Australia.
Sandie Dawe, VisitBritain’s chief executive, points to a “major missed opportunity” because it cannot co-fund as many promotions as it would like. “We have more money on the table than we can match. We can’t do a follow-up campaign in Asia because we can’t match AirAsia – these are foreign airlines that want to pay to promote Britain!” she adds.
Tourism minister Barbara Follett has already indicated that there is no extra money, so VisitBritain is looking for other quick fixes such as lowering the cost to foreign nationals of securing a holiday visa.
The industry is enjoying mixed fortunes and tour operators enter a critical period this week as they decide how to shift unsold breaks. According to estimates, around 35% of August capacity is unsold compared with a more usual 20%, raising the prospect of a damaging price war in the school holiday season.
Profits are also being squeezed in the hotel trade, where occupancy rates are under pressure. It was possible to secure a night’s stay in a London Hilton for £80 during the Whitsun half-term holiday, compared with £200 last year.
After a grim start to the year, Travelodge managing director Guy Parsons says like-for-like sales are improving, with the summer outlook “reasonably buoyant. Volume seems to be coming back but the rates people are willing to pay are dramatically down year-on-year.”
He adds that its new hotels in places such as Blackpool, where rooms can cost as little as £9 a night, have been virtually full since Easter.
Restaurateurs are also feeling more cheerful, with Des Gunewardena, the chief executive of D&D London, reporting an uptick since April. He says that covers at some of his London venues are running at pre-credit-crunch levels as Britons move off austerity rations – though corporate business remains 20% down.
Dawson says the fortunes of BALPPA’s 300 members are hindered more by rain than recession, with most companies enjoying a bounce after last year’s washout. However, he says, families are watching their spending, bringing picnics and forgoing souvenirs on day trips – high-margin extras that are crucial to an operator’s profits.
Analysts say tourism is overlooked because it is a dispersed industry employing often low-paid seasonal workers. But with economic migrants returning home, it is Britons who are applying for summer jobs. Parsons says Travelodge has “zero” labour turnover in some areas, while Alton Towers received 11,000 applications for 2,500 summer posts.
France is already looking to leisure companies to create jobs and will slash VAT on restaurant meals from 19.6% to 5.5% this summer. The majority of EU member states already levy a reduced rate of tax on tourism industries and Dawson argues that cutting VAT on attractions and accommodation here to 5% would more than pay its way: “Tourism is a price-sensitive industry and a VAT reduction would create jobs and provide a real signal from the government that it values the industry and the contribution it can make.”