Independent Survey shows East Anglia’s tourism industry shines brightly, against a backdrop of rising costs and longer hours for owners can it be sustained?
Thursday, 19 April 2018
- 62% of tourism businesses grew turnover last year
- 67% anticipating turnover increases in 2018
- 52% working longer hours than 5 years ago
- 58% feeling more pressured than 5 years ago
A select group of businesses met Tuesday at Le Talbooth to attend a prelaunch event. Yesterday the region’s tourism leaders gathered in Norfolk to hear the results of East Anglia’s largest Tourism and Leisure Business Survey at Thursford Steam Museum which revealed that businesses are still optimistic about the future despite facing a number of challenges, including rising costs, added legislative changes increasing wage costs with increases in National Minimum wage, National Living wage and the introduction of Auto Enrolment.
Some 300 tourism businesses completed the Tourism and Leisure Business Survey, co-ordinated by Larking Gowen - Chartered Accountants and Business Advisors. The survey enables voices from Norfolk, Suffolk and Essex’s tourism sector to be heard.
Speaking at the seminars, Chris Scargill, Larking Gowen’s Tourism Partner highlighted how 62% of tourism businesses grew turnover in 2017. This was down on the previous year although 67% anticipate improved turnover in 2018.
Chris said: “This is great news for the sector. We have heard anecdotally how some businesses have done well but these statistics highlight how as a collective the sector has benefited.”
“Of course turnover is not the full story and increased costs have had a real impact with only 44% of businesses reporting improved profits in 2017, while nearly one in three saw profits decrease, which is up from one in five last year. But with over half of businesses anticipating improved profits in 2018, it is clear changes in organisational practices have been implemented and will help things.”
“Profits are the security of the future and enable businesses to invest in developing their businesses. It is critical for the long term that profits remain strong”.
The survey shows 57% of respondents say they will make site improvements to grow their business going forward while 31% plan to invest in training and 39% plan to increase spend on marketing in 2018.
Brexit is continually in the news and one in five businesses fear a reduction in staff from overseas will impact the sector, but the costs of buying goods from abroad impacted 42% of businesses in 2017 with 47% fearing further increased costs in 2018 as suppliers find they can no longer keep margins down. However it was not all bad news as 15% of businesses anticipated seeing an increase in overseas visitors before EU membership ends.
Other challenges last year included the legislative increases in National Living Wage and National Minimum Wage and saw the introduction of Auto Enrolment across the board. While 13% planned to increase pay for all staff in line with the legislative changes, some 20% looked to make savings by planning a pay freeze (6%) or a below inflation increase (14%).
Chris adds; “Nobody I speak to has a desire to undervalue the significant contribution of their staff but they see the rises taking place too quickly to allow for price increases that their customers will accept. It is not just wage increase, but these on top of direct cost increases, and other costs, such as higher rents and rates is having an impact. You only have to look at Jamie Olivers Italian, Prezzo and the like to see the effect of consumer squeeze on the sector.”
Future worries for businesses include more expensive legislation and red tape, but nearly half are concerned about the UK economy.
“This ties in with general market forces, as there have been several years where wages have not kept pace with inflation and, with utility costs, domestic rates combined with staff seeing their own income squeezed with a further increase in auto enrolment contributions, there is a lot of competition for the consumers pound” added Chris.
It is certainly not all doom and gloom as optimism is still strong in the sector. While four in five businesses said they were optimistic last year, 19% were even more optimistic now about their own business with 13% more optimistic about the East Anglian Tourism sector as a whole.
The survey also covers TripAdvisor trends, Staff wellbeing benefits, consumer habits along with social media and interaction with local Destination marketing organisations. The results are published in a booklet and online with a number of stories from around the region bringing the trends and statistics to life.