Tourism sector in East Anglia showing "a sense of cautious optimism"

More than half of tourism businesses in the east of England are anticipating turnover growth this year, according to Larking Gowen's Tourism, Leisure & Hospitality Business Survey 2025 published today.

The survey outlines a sector where 55% of businesses projected income growth for 2025, compared to 25% anticipating a downturn.

The sense of optimism is tempered by worries about a backdrop of financial pressures including the state of the economy, inflation, rising employee costs and the loss of business rate relief.

With challenges in the economy, respondents were asked about plans for investment. 52% said they would be investing in site improvements (compared to 59% last year) and 53% said they would put additional investment into marketing and PR (36% last year).

Responding to increased costs in the sector, 56% said they would increase prices, 40% would reduce operating costs, while 26% said they would spend more to increase their offering. 

Jo Burton, Tourism, Leisure and Hospitality Director at Larking Gowen, said: "As we entered 2025, a sense of cautious optimism seemed to return. But behind this optimism lies a shared reality, with many businesses having to raise prices to manage rising costs."

"While 37% of participants enjoyed a rise in profitability - up from 23% in 2023 - an equal number saw a decline. Still, confidence shone through, with 43% expecting profits to rise, 31% predicting a fall, and the remainder expecting no change," she said.

Changes to the National Minimum Wage and National Insurance have hit hard. UK Hospitality has calculated that the average cost per full-time employee will increase by £2,500 per annum with increases of 18% for employing under-18s and 16% for 18-20-year-olds. 

25% of businesses are considering staff reductions, and 25% said they had no plans to increase salaries for employees above the statutory minimums.

Wellbeing came through strongly in the survey, not just for staff but also for business owners and visitors, with 45% saying they had made changes to improve visitor wellbeing, and 48% saying demand for these changes is growing.

Chris Scargill, Tourism, Leisure and Hospitality Partner at Larking Gowen, said: "The sector continues to operate in a period of instability and uncertainty caused by factors beyond its control. 

"While there clearly are challenges, there remains an underlying resilience and a hard-core work ethic which means there is still optimism and a focus on investment."

Regional business leaders in the tourism sector attended a seminar yesterday at Prospect House, Norwich, to discuss the findings of the survey. 

The survey results are presented in a brochure which includes interviews with business leaders and heads of Destination Marketing Organisations, covering a range of subjects including optimism, staffing, investment, marketing, collaboration, AI and the impact of Sizewell C.