Tourism study confirms Covid-19 ‘tectonic shift’ across the North

• Half of hospitality and leisure businesses across north of England were trading at a loss of over 60% for 10 weeks out of 16-week survey
• Businesses expect revenue to recover in January 2022, compared to previous outlook of July 2021 at start of study, as a third of businesses report forward bookings for first quarter of 2021 are significantly down
• A fifth of businesses surveyed unsure that they will be trading next summer
• Roundtable event saw North West tourism board leaders and NatWest representatives discuss the ‘tectonic shift’ confirmed by the study and need for collaboration to ensure sector recovers

After almost a year of severe disruption for the tourism, hospitality and leisure sector, a contingent of tourism boards across the north of England came together to discuss the findings of the NatWest North of England Tourism Barometer study.

Over the last sixteen weeks the NatWest North of England Tourism Business Barometer has taken the temperature of the North’s tourism business environment including changes in employment, trends in revenue and overall business confidence. The study commenced in mid-July when the UK was emerging out of lockdown and covered a period up to and including the introduction of the government’s three tier alert level in late October.

Led by Marketing Manchester, nine tourism boards – otherwise known as Destination Management Organisations (DMOs), including Marketing Lancashire, Cumbria Tourism, Marketing Cheshire and Marketing Liverpool from the North West – were involved and recruited businesses from within their tourism economies that consistently participated in a regular survey.

At a roundtable event held on Friday 20 November, leaders from across the north came together with businesses that participated in the survey and senior economists from NatWest. Together they analysed the journey that the north of England’s tourism, hospitality and leisure sector undertook throughout the study period, how it can learn from the study, and move forward through the challenging winter and into recovery next year.

One of several key findings across the north of England that the study revealed is that businesses have, and continue, to carry significant losses to revenue, with 31% of businesses reporting a revenue loss of over 60% even at the peak of resumed business activity in late August. This was when the visitor economy had largely reopened after the first lockdown and initiatives such as Eat Out to Help Out were having a positive impact. Overall, around half of businesses were trading at a loss of over 60% for ten out of the sixteen weeks of the study.

Businesses across the north of England have had to make significant reductions to permanent and temporary staff, and from the end of September and throughout October half of businesses reported that they were downsizing their permanent staff over the next month.

Other key findings show that: a third of businesses reported forward bookings for January to March 2021 being significantly down on where they would usually be; that business confidence in revenue recovery has shifted from July 2021 at the beginning of the study to January 2022 at the end of the study; and that overall concerns about business survival shows that 21% of businesses are unsure if they will still be trading next summer.

Commenting on the study Richard Topliss, Chairman of the NatWest Regional Board, North, said: “Tourism and the wider hospitality and leisure sector has faced and continues to endure unprecedented challenges as a result of the COVID pandemic. The tourism barometer has charted the ups and downs of businesses in the sector over the last four months and the final survey points to low confidence for the immediate future, and hence, the need for central and local government support, alongside business leaders and providers of finance, to work together to help the sector rebuild for the future when it becomes clear that widespread vaccination will permit a new normal to emerge for tourism.”

 Tourism leaders across the North West also reflected on the study’s individual findings and the situation in their own regions.

Rachel McQueen, Chief Executive of Marketing Lancashire, said: “In the early weeks of the study, it looked as though Lancashire was beginning to recover well. Businesses had worked hard to make sure that they were Covid-secure, and consumer and business confidence was growing as bookings came back. However, it is clear that the impact of additional restrictions and then the three-tier system quickly took their toll, and both forward bookings and business confidence slumped. The opportunity to claw back revenue over the widely predicted staycation ‘boom’ was so short, that many businesses are now facing the feared ‘third winter’ in a row, and a winter without the usual Christmas revenue.”

“It is critical that we gain some clarity as soon as possible on how we will be exiting this second lockdown, and what additional support will be available not just over winter, but in the medium to long term. Our businesses have done absolutely everything asked of them, and yet many are struggling to survive through no fault of their own. There will be no ‘bounce back’, we need to support them throughout 2021 and beyond to slowly rebuild, or these amazing assets that mean so much to residents and visitors alike could be lost forever.”

 Chris Brown, Director of Marketing Liverpool, said: “The findings from this study are crystal clear about the desperate state many of our businesses find themselves in, with confidence ebbing away the longer we are in this crisis. The figures around half of businesses downsizing and 21% being unsure if they will still be trading next summer are particularly depressing to hear, and underline why Government needs to provide proper support for this industry, which is so vital to the UK’s economy.”

 Gill Haigh, Managing Director of Cumbria Tourism, said: “These findings chime with our own research for the Lake District, Cumbria. The NatWest Business Barometer highlights business viability as Cumbria’s greatest concern; this reflects our own survey which shows that almost half of businesses are not confident about surviving the next six months, with many businesses finding themselves outside of government support. This is simply heart-breaking for hardworking, resilient people who have made monumental efforts to adapt, re-open and trade in COVID-safe way. Looking ahead, the strong partnership between Northern destinations will be vital as we continue to work together to re-build consumer confidence. It is now imperative that we capitalise on new markets alongside regaining traditional visitors, and build on the public’s renewed appreciation of supporting ‘local’ and collectively championing the North.”

 Sheona Southern, Managing Director of Marketing Manchester, said: “In Greater Manchester there are significant parts of the sector that have been closed since March and there’s no denying that Manchester – like other cities across the North – has borne the brunt of additional lockdown restrictions. The individual barometer data for Greater Manchester shows this, with the region having had the largest proportion of businesses trading with a revenue of over 75% down, as well as much lower footfall, a greater reduction to permanent staff and a more significant downfall in business on the books for January to March 2021 than we would have experienced pre-Covid-19.

“We must now get on with being as prepared as possible for recovery when restrictions permit it, and to this end we have recently launched Greater Manchester Tourism, Hospitality and Leisure Support and Recovery Plan to provide a roadmap for our sector. Alongside this DMOs need to be committed to rebuilding consumer confidence and need to deliver proactive marketing activity for both domestic and international markets to stimulate business, all the while shouting about and lobbying in support of the business events industry, sports fixtures and major events which are absolutely vital in terms of driving demand in cities such as ours.”