Coronavirus destination impact update

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A quick update on general activities and actions being taken by colleagues in various destination, based on a small number of responses since the original request for information was issued yesterday:

The general situation is dire and since the advice to avoid travel and social contact, specifying a range of discretionary leisure based venues to avoid was issued on Monday, business and business confidence has largely collapsed, with a number of mainly entertainment venues and attractions already voluntarily closing largely on the basis that the advice made continuance both morally and financially unsustainable.  More bad news is almost certain to follow in this respect.

The advisory nature of the social distancing has prompted a call for mandatory closure notice from businesses who believe that they are being denied access to their commercial curtailment insurance.  We and others have raised this concern Nationally. This afternoon I have been sent a quote from the Association of British Insurers, which states that curtailment insurance is generally limited to physical causes (flooding, fire etc.)  and that specific insurance for the impact of infectious disease is normally purchased, typically by larger companies, as an extension of cover. In their estimate very few businesses would be covered, even if closure was mandated. Cover will vary on a case by case basis and business are urged to check the detail directly with their insurers.

I can’t confirm or deny the accuracy of the ABI’s statement but from general experience I would tend believe that it is likely to be true. I will confirm the position as soon as possible,

Those few destinations that have so far reported specific actions have in general made the decision to curtail any paid for advertising for the coming spring season and potentially beyond in order to avoid wasted effort/resource and, critically, to create a recovery marketing fund. Major events due to take place in the next 1 to 8 weeks are being cancelled with scenario planning taking place on later events. A couple of coastal destinations have reported, delaying the appointment of temporary operational seasonal staff.   The other main focus appears to be on trying to accurately assess the likely costs and penalties both internally to the DMO and externally to local business and businesses, based on various difference assumptions on the length of the crisis.  That information will inform further actions.

Next critical stage will be the Chancellor’s announcements latter to day of measures to support the economy and it is hoped specific actions to support individual businesses sectors.  Once that support is understood we may have some greater clarity around the scale of the issues faced and the likelihood of wide spread business failures within the visitor economy.

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