Last week I shared concerns about the potential much deeper impact of the headline failure of the Specialist Leisure Group and its nine brands and 40 odd major hotels in 30 odd destinations (see that here).
Conversation last week with approximately 20, mainly coastal resort destinations, confirm that the fear that many medium and larger hotel have business models predicated on the ready availability of business from companies within the SLG, David Urquhart the largest independent owner operator (now closed) and other equally vulnerable regional and local companies. To some hotels it is core business, to many more its filler when other business may be slack and thus critical to keeping the business viable regardless of seasonal and other ebbs and flows.
As promised, I contacted the coaching arm of Confederation of Passenger Transport and the Coach Tourism Association. They too are struggling to quantify, in precise terms, the scale of the loss of supply to group travel, other than to say that its big. Nor can any of us be entirely certain about the impact of convid-19 on confidence of their typical customer and, therefore, the impact on the demand side, other than to presume that in all likelihood it is very significant. Three points from CPT and CTA did strike me as immediately relevant to the debate at destination level:
- Coach business are classified by Government as a transport industry and even where the entirety of their business is tourism group travel, they are not entitled to access the tourism and leisure support mechanism. At the very least something to lobby on?
- Just like most other tourism businesses unless there is some movement on the 2m rule it is going to be almost impossible to reach viable passenger numbers. Restriction on numbers will impact on the costing formula and further limit the supply side; it isn’t simple going to be a case of fewer available coach, as each remaining coach may carry as little as a third of the pre-covid-19 load for the foreseeable future, adding to an already difficult situation.
- Some of the SLG brands only used third party coaches putting further financial pressure on some of the regional and local companies contracted to them. Moreover, even where the SLG company used their own fleets, for example Shearings, they were heavy reliance on smaller local companies for transfer and feeder journeys (or more to the point some companies were heavily reliant on SPG business). The collapse of SLG may well do far more to exacerbate the pressure on other coaching companies than we might have at first assumed and in turn the likely impact on future supply may be much bigger than we might have originally anticipated?
Conversation with colleagues also confirmed that the day trip market both from place of residence or within a staying/overnight coach trip or tour is likely to be heavily impacted and in turn impact on their local visitor economy businesses. The loss of that market and especially the unsung trips within an overnight package will hit a wide range of destinations, from small and quaint to the larger coastal and inland destination (of every type). It is also likely to impact on attraction and, especially on things like parks and gardens and historic houses which are particularly popular with the core, domestic group travel market.
I was also reminded by colleagues that group travel and coaches as a means of transport were often central to parts of the international market. A potential lack of UK coach supply could in due course impact on the international inbound tourism recovery too.
In essence what might on first glance have seemed like some other sector of the tourism industry’s problem, may turn out to be as much of an issue for destinations as it is for the coach travel and tourism industry.