How the UK can save its tourism industry

The coronavirus pandemic has left the sector fighting for survival, but hope lies in domestic travel.

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This year, British tourists will explore their isles more than ever before, but the £127bn UK industry remains on course for a tough period. With many people unable or unwilling to travel abroad in the coming months, Brits are likely to swap Mallorca for Margate, Santorini for Sutton Hoo, and the Grand Canyon for Cheddar Gorge.

Although Britons will soon be able to holiday in parts of Europe, most international travel remains strictly off limits. Moreover, people are nervous about the risks of flying and the uncertainties they face abroad, in terms of restrictions and wellbeing, says Patricia Yates, director of strategy and communications at VisitBritain. “The answer for most countries is to encourage domestic tourism, meaning even less inbound visitors to the UK. That's why getting Brits to go out and holiday is really crucial for industry survival. Now is the time to buy British and enjoy Britain,” she adds. 

The stakes are extremely high for the national economy. Tourism employs three million people in the UK, almost one in ten people, and accounts for a whopping 9 per cent of the country’s GDP. An April survey found that hotels, restaurants and pubs had furloughed 80 per cent of staff, according to the Office for National Statistics. 

According to the New Statesman's survey of business leaders, one of the sectors worst hit by the Covid-19 crisis is tourism, leisure and hospitality. Eighty-six per cent of respondents indicated their organisations were planning to reduce the size of their organisations; some 39 per cent intend to cut 21-30 per cent of roles. By contrast, just 32 per cent of organisations in the financial and professional services sector are planning to cut jobs. Nearly all respondents – 98 per cent  working in the tourism, leisure and hospitality sector expect to see revenues fall. 

“Already, 7 per cent of coastal tourism businesses have closed. Its value may halve. These are huge losses,” says Yates. In Cornwall alone, where one in three jobs in the private sector are in tourism, £655m will have been lost by the start of July, according to Visit Cornwall.

Though the number of people who go abroad each year is much smaller than those holidaying in the UK, they spend an equal amount as a group, according to British Destinations, a national trade association. It is now hoped that all this money will be spent at home.
 
The international competition to keep citizens spending locally is evident within the UK regions, too. A leading representative of Scotland’s tourism industry recently stated that the sector would lose £300m due to Scots spending their money  in England, where lockdown will be eased two weeks before north of the border.
 
Meanwhile, the airline industry is lobbying hard to get the international tourism market up and running, says Peter Hampson, chief executive of British Destinations. “Some of that is being portrayed as ‘we need to get overseas visitors to come to the UK’, but the reality for people like Ryanair is that they’re desperate to get to ship brits abroad,” he adds.

As things stand, tourists are starting to trickle into the UK. But, though travellers from a smattering of European countries will soon be able to enter without a 14-day quarantine, and vice versa, numbers are likely to remain subdued. And UK holidaymakers may not flock abroad en masse either once partial-European travel is resumed on the 6 July, as suggested by VisitBritain’s latest weekly consumer tracker. The general consensus in the sector is that international tourism will take a year or two to return to pre-crisis levels, meaning local tourism is set to play an even greater role than usual. 

Despite its low profile, domestic tourism accounts for a whopping 80 per cent of the worth of the UK visitor economy, a figure that is expected to rise to about 95 per cent in 2020, says Bernard Donoghue, director of the Association of Leading Visitor Attractions. 

The local market has already begun to resurge, with private gardens, zoos, city farms, and safari parks reopening their doors in June. While the hotel and lodging industry has remained shut, and public transport is still restricted to essential travel, day trips have become very popular, says Mr Hampson. Bereft of the overnight tourism market, the UK’s more remote locations have suffered a particularly harsh fate.  
 
It comes as a lifeline, therefore, that hotels, B&Bs, caravan parks and other accommodation will reopen on the 4 July, however, they will probably not be inundated with customers. Camping and caravanning are expected to be particularly popular, or any other form of self-contained and self-catering accommodation in which people can control their environment, contends Hampson.

In terms of where people want to go this summer, it’s the coast and countryside, show’s VisitBritain's consumer tracker.Demand for outdoor activities is extraordinarily high these days, which is why Komoot – a popular app providing hiking and cycling routes – has seen record high downloads across the UK since April, according to Appfigures.

Beauty spots near large towns and cities will attract large numbers of people this summer, says Hampson. Safely managing the influx of people and cars will pose obvious challenges to these locations, and the quality of peoples’ experience. Heritage sites and historic houses will also be hotspots, as is often the case during economic crises, says Donoghue. “When the future is so uncertain and unpredictable, the past in contrast is definite and reassuring.” For example, after the 2008 financial crisis, staycations boomed and demand for British history and culture blossomed through TV programmes such as Downton Abbey and The Great British Bake Off, he explains.  
 
Visiting local attractions will be the obvious, and only, choice for those without cars – one in two Londoners – until public transport restrictions are eased and confidence restored. If the reopening of the Netherlands’ museums and galleries is anything to go by, the UK’s major indoor attractions are likely to be oversubscribed, explains Donoghue. Like many public spaces and businesses, social distancing at museums will require pre-booked, timed tickets and crowd control at toilets, for example.

Measures such as these are key to rebuilding consumer confidence. Alongside the government, VisitBritain is aiming to provide businesses with a standardised online safety-training program, thereby accrediting them as “good-to-go” and Covid-19 compliant.

Prime Minister Boris Johnson specifically encouraged “staycations” when announcing that much of the hospitality, tourism and leisure industries could cautiously reopen on 4 July. However, considering that this was only decreed on 23 June, the news has come at the last minute. Attractions and businesses need time to prepare for reopening, and many won’t be able to welcome guests until mid-August, says Donoghue.

The new “one metre plus” rule provides businesses with much more flexibility, but many will still have to operate at something in the order of only two-thirds of normal capacity, says Hampson. Those with less financial reserves may find it less expensive to simply close for the year, despite strong demand for domestic tourism. 

“It was quite easy to shut tourism down. It's going to be really difficult to bring it back,” says Yates. Many attractions make most of their money between Easter and the end of September, half of which has already been lost. “There's a relatively small window to make the profit that will see people through the rest of the year. In effect, businesses have experienced three financial winters,” says Hampson. Add to this the fact that, though many Brits are keen to holiday, many are not and it could take months for consumer confidence to build mass momentum, shows VisitBritain’s consumer tracker.

Beyond finances, tourist attractions, complete with their surrounding pubs and restaurants, are essential to placemaking and the cultural fabric of their communities, says Yates. Keeping them alive, therefore, will be important in helping communities come together and recover. To do so, however, the sector will need more government support. “Extending the furlough scheme beyond the summer, and making it more flexible and part time, will be the key to survival.”

Extending the season through autumn and into the winter is another solution, with the industry already proposing that an additional bank holiday be given in October, explains Hampson. Government support to help companies defer loans will also be important, while the Financial Times has suggested a short-term VAT cut for the tourism sector. 
 
British consumers can also do their bit. “Not for the first time, we Brits will save the UK tourism industry,” concludes Donoghue. “Get to know what’s on your doorstep, appreciate it, love and put some money back into it.”

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