East Anglia’s tourism sector still standing, but resilience is being stretched, new survey warns

Tourism, leisure and hospitality businesses across Norfolk, Suffolk and Essex remain operational, innovative and determined, but are now operating under structural pressure rather than short‑term disruption, according to the Tourism Business Survey 2026 from Larking Gowen, the region’s leading advisers to the visitor economy.

The findings reveal a sector that continues to attract visitors and grow turnover, yet is increasingly constrained by rising employment costs, taxation, business rates and regulatory change. Many businesses describe trading conditions as a “slow squeeze”, where resilience is maintained through endurance rather than recovery.

While around 60% of respondents reported increased turnover in 2025, margins are being eroded, with 40% expecting lower profitability, highlighting a growing disconnect between demand and sustainability.

Chris Scargill, Tourism, Leisure and Hospitality Partner at Larking Gowen, said: “Tourism businesses in East Anglia are still trading, still investing and still delivering exceptional experiences, but the nature of resilience has changed. This is no longer about bouncing back from a single shock. It’s about absorbing a permanent reset in costs, policy pressure and customer behaviour. Hospitality is resilient, but it is not invincible. Without greater stability, clarity and proportionate policy, even well‑run businesses will struggle to sustain themselves long‑term.”

Now in its 20th year, the Tourism Business Survey draws insight from visitor attractions, hotels, pubs, restaurants, holiday parks, cultural venues and retail businesses, making it one of the longest‑running and most trusted barometers of the East Anglian visitor economy.

Costs rising faster than confidence

Staffing remains the defining challenge. Nearly 80% of businesses reported increased wage costs, driven by National Living Wage changes and compressed pay differentials. Almost a quarter reduced staff numbers during 2025, while many more are considering further reductions, shorter hours or operational compromises to remain viable.

Business rates and taxation are now seen as existential issues. Future government tax changes, the state of the UK economy, energy costs and National Insurance are all cited as major concerns. Many respondents warned that rising rates liabilities, the return of full rates relief and uncertainty around VAT and proposed overnight visitor levies risk accelerating closures, particularly in the mid‑market, where businesses are neither budget nor luxury.

Experience still wins, but only with investment

Despite the pressure, optimism has not disappeared with around 43% of businesses expect increased profits in 2026, albeit modest and nearly half are increasing spend on marketing, technology and customer experience.  The survey highlights a clear shift toward experience‑led differentiation, with businesses investing in service quality, brand identity, digital capability and memorable guest experiences as the primary route to competitiveness in a crowded and cautious market.

Sector voices:

Iain Wilson, owner of Byfords, The Pigs and several of Norfolk’s best‑known hospitality businesses, said: “If you’re not reinvesting, you’re going backwards. Costs have reset permanently and busy no longer means profitable. People may go out less often, but when they do, they want something memorable. That means being absolutely clear about who you’re for, investing in experience and having the courage to stop doing what no longer works."

Samantha Prince, Deputy Director at the Food Museum in Stowmarket, added: “Museums and attractions can no longer rely on collections alone. We have to be confident brands, agile businesses and meaningful community spaces at the same time. Relevance and not just nostalgia, is what now keeps the doors open.”

Brian Keane, hospitality operator and investor, said: “The cost base has shifted permanently. Payroll, compliance and energy are not coming back down. The winners will be those who use technology to protect margins while redeploying people where they genuinely add value to the guest experience. Doing nothing is now the biggest risk.”

Nick Steven-Jones, Chief Executive, Jarrolds, “Retail is no longer competing just with other shops, it’s competing with weekends away, cafés, culture and experiences. Destinations that combine hospitality, retail and tourism will outperform those that don’t. If people are going to leave the house, the experience has to justify the time, as well as the spend.”

A warning and a call for stability

While businesses continue to adapt, the survey warns of a longer‑term risk: not fewer visitors, but fewer viable and distinctive businesses in five years’ time. Respondents were clear that they are not asking for rescue, but for stability, clarity and realistic policy that reflects how tourism and hospitality actually operate, particularly in labour‑intensive, seasonal and place‑based economies such as East Anglia.

Jo Burton, Tourism Director at Larking Gowen, said: “The visitor economy remains one of East Anglia’s most important drivers of jobs, identity and local pride. But resilience has limits. Without proportionate support and policy certainty, even the most committed operators will be forced into defensive decisions that hold back growth, investment and opportunity.”