Household spending. On 26 July ONS issued a report entitled “Making ends meet: are households living beyond their means?”. Its key findings have since featured in a number of financial articles. The report states that UK households on average spent £900 more than they earned during 2017, the first time that average household expenditure has exceeded average income in 30 years, on this occasion creating a £25 bn deficit in the year, contributing to the worst level on record.
This worrying news isn’t brand-new, the figures coming from the ONS household expenditure survey 2017 first published at the beginning of 2018. It was also subsequently referenced by the Governor of the Bank of England in his discussion of the recent base rate rise which was, in part, aimed at reducing unsustainable levels of sending and discouraging the accumulation of household debt. As a national average the overspend and associated debt isn’t evenly spread, it is greater away from London and the South East of England and far more concentrated in lower income groups and the under 30s.
What are the implications for UK tourism, if any? Experience suggests that tourism and the wider visitor economy are some of the first areas of discretionary spending to be curtailed and can be the slowest to recover when the economy improves. A squeeze on UK household expenditure will definitely hit discretionary spending, if it isn’t already doing so. Lower income groups are likely to be hit hardest, as are those destinations and visitor economy products that are relatively more targeted towards them. Some of those loses may be mitigated by other groups trading down as all but the highest income groups are likely be affected in some way by this squeeze on disposable income. There is also a question mark over the degree to which “holidays” have become a life style essential for many, rather than a discretionary item in recent years, hence in part perhaps the recent increased levels of household debt? It may be too early in this summer season to assess and too near the recent base rate increases to see marked changes resulting from it yet but there is still good reason to be concerned about the likely negative impacts on domestic tourism and the wider visitor economy now and going forward in to 2019 and beyond.
Exchange rates. In other financial news the “plummeting pound” and its predicted continuing BREXIT inspired volatility is said to be having potentially positive impacts on this year’s domestic holiday taking and on international visitor numbers. The British are said to be choosing to stay at home in larger numbers (but are they all holidaying and/or day tripping at home?) and overseas visitor numbers continue to increase as more international visitors exploit their greater buying power (albeit much of it still London focused?). The weak pound is also said to be hurting the late booking UK summer outbound market and major travel operators who still have quantities of increasingly distressed, stock to sell. Whether the exceptional good weather in July had as much to do with the suggested continuing domestic boost, as the poor exchange rates remains to be properly assessed; as does both the GB Tourism Statistics and UK International Passenger Survey figure for the main summer season that, for very good practical reason, are produced several months in arrears. Only when the data for the full summer is published (December?) will we know for certain whether the anecdotal evidence is supported by national survey results.
More domestic holiday taking and more international visitors could be viewed as a significant success, but success that is predicated on poor exchange rates and economic uncertainty is a rather hollow success that is ultimately unsustainable for the Nation as a whole. This is well illustrated by today’s reports of a resurgence of interest in Turkey as a UK popular summer holiday destination based largely off the back of crash in the value of the Turkish lira; nice for the tourists, OK for tourism businesses but desperately bad news for the majority of the Turkish population.
Potentially the impact of exchange rates on domestic and international tourism may pale into insignificance against the possible immediate impacts of other potential BREXIT related uncertainties. Is post March 2019 currently, really the best time to be planning to visit the UK, or to leave it on a foreign holiday? Several travel commentators currently think not. Much now depends on what develops in the coming few months and what actually happens post-midnight on 29 March 2019 and how quickly the tourist industry and prospective tourist then respond to it.
Over tourism. Anecdotal evidence, including media reports of a 20% increase in visitors to Cornwall this summer, supports the view that domestic tourism has had a significant welcome boost. That said not everyone, everywhere is being as optimistic about their own destination’s performance and many of the same reports on Cornwall 20% boost, have also contrived to misrepresent Visit Cornwall’s very sensible attempts to deal with “over tourism” at two small and relatively isolated locations. So, what is the truth behind the headlines?
Good weather and the “Poldark effect” have meant that Porthcurno and Kynance Cove on the adjoining peninsulas on the toe of Cornwall have become unexpectedly overcrowded and, at times, almost inaccessible by car, particularly during busy weekend periods. Consequently, Visit Cornwall have suspended promoting them and instead are encouraging current visitors to visit one of the other 400 plus beaches on Cornwall’s other 400 plus mile coast and return to see Porthcurno and Kynance Cove on another day, preferably on a subsequent visit, perhaps even one made out of main season; all of which seem to be very sensible marketing messages in face of an otherwise difficult situation. In parallel Cornwall Council as the asset managers are pondering how best to manage the physical situation locally. Some of the reporting of this and the media headlines in particular, might suggest to the casual reader that Cornwall is full or that Visit Cornwall are actively discouraging visitors from going to beaches in general, neither of which is true.
Visit Cornwall’s central point is that there is no benefit to either visitor or resident if the volume of visitors exceeds carrying capacity and as a consequence the visitor and the visited both have a bad experience, that neither will wish to repeat. As yet routinely managing tourism volumes, so they don’t exceed carrying capacity isn’t a mainstream destination management or destination marketing organisation function in the UK but it could well become one, during peak periods in an increasing number of urban and rural hotspots, if domestic and international tourism and day trip volumes continue to grow. We should be thankful that we have yet to reach the levels of “over tourism”, for example, experienced in Rome or Venice where at peak periods visitors can’t actual experience what they come to visit because of the density of the crowds being channelled past international travel icons like the Trevi Fountain.
It is to be hope that in the UK as a whole we will take a common-sense approach like Visit Cornwall’s and encourage physical dispersal to equally attractive but currently, less populated alternative destinations or place of interest within them, rather than going down the alternative route of corralling, controlling and traffic managing the excessive flow of visitors in situ. The latter approach may retain immediate volume and value locally but in doing so it can give the visitor a manipulated, half-baked, tourist version of the genuine experience. That, I would argue, seriously threatens the longer-term volume and value and sustainability of the destination, as most people go to experience the place, not to experience being an obvious part of the tourist scrum.
What of course Visit Cornwall couldn’t reasonable be expected to do, had it been necessary, was to suggest that visitor disperse to say Devon instead of, or as well as the rest of Cornwall. Managing occasional peaks by a policy of much wider regional or national redistribution can only conceivably be managed at a regional or national strategic level, by regional or national bodies. Even then these bodies are likely to be precious about trying to retain as much as possible of any redistribution within their own, albeit larger, administrative boundaries. If we genuinely think that: politics, international finance, effective marketing or even some guaranteed better weather might somehow contrive to continue to sustain ever-increasing tourism volumes, then it may be prudent to start discussing with the National Boards what their policies are, if any, on the management of point or wider area, over tourism? For example, do they see this as a purely local management issue or one they should be prepared to engage in, perhaps for the very reason that dispersal by local management interests beyond local administrative boundaries isn’t currently a practical proposition, especially in the face of local, often paying, business partner’s opposition.
Can you help? If any of the membership have anecdotal evidence on the main season’s performance so far, I would welcome it. Views on the local policy or national strategy on the management of over tourism, something I know many of you would love to have the need to face, would also be welcomed. It’s far from a mainstream topic yet but it one which is starting to appear somewhere, every main summer season and if nothing else I would like to be in a position to start offering an informed destination-based view on how best to handle it.