Month: October 2020

New hotel research available

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Two very useful piece of research published this week, both now available on our C-19 research tab on

The first from Hotel Solutions is the 6th update of their series of Survival to recovery reports. This is markedly more optimistic than the second report from PwC but understandably so, since it is looking at a much wider base, is written retrospectively and largely predates the very recent impacts of new factors like tiering in England and lockdown in Wales.

The PwC report by its nature appears to focus more on larger major national and international chains and, thus, to a degree leans towards Cities, particularly impacted by the catastrophic loss of international and business tourism (not exclusively a major City issue). PwC are not predicting a return to 2019 levels before 2023 and that assumes an effective vaccine becoming available in 2021. This broadly aligns with the view expressed in our discussions among senior destination manager and their thoughts on the prospects for full recover within tourism and the visitor economy in general.

Although different in tone, they are not at all contradictory as they are addressing different issues, over different timeframes a cross, in part, different constituent parts of the hotel and accommodation industry. It is well worth reading both in full (neither is long). Find them at the top of the list of research by date order at:


Lockdown in Wales restrictions in England

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As you will be aware the Welsh Government has announced a 16 days fire-break lockdown from 6pm Friday 23 October to Monday 9 November, which will embrace 3 full weekends and the half term period for the vast majority of schools in both Wales and England. The impact will be significant for tourism and hospitality industry in Wales, a nation where the visitor economy is a relatively more widespread and a relatively more important component of the total economy. Movement restrictions in Wales will also have an impact on outgoing leisure and tourism activity from Wales.

In addition to the UK wide support packages (for example, the remanence of furlough and, from 1 Nov, the less generous replacement job support scheme) the Welsh Government will be making £300m available to businesses impacted by the lockdown. The £300m, to cover the majority of businesses in Wales, for a short sharp 16 day period, in an Country of c 3.1m compares, with a sum of £40m made available in the Liverpool City Region, principally but not exclusively for the hospitality industry, for an indeterminate period, for an area with a population of c 1.5m.

Such a simplistic comparison isn’t necessarily that helpful, particularly as the devil will be in the detailed and differing situations and differing timeframe, The Welsh figure, for example, appears to include other ongoing national support funding and for a much wider range of businesses of all types forcibly closed. Regardless of the levels of support being made available, two weeks closure in Wales and an indeterminate, 4 week plus mix of closure and/or significant curtailment in some areas within England will have a further devastating impact on the local “tourism industry”, coming as it does on top of an already difficult year for the vast majority of visitor economy related businesses, of whatever type or size. In particular, the loss of the Autumn half term, the last potentially strong trading opportunity for many in the 2020, compounds the problems that many businesses will now face.

We now all face the prospect of a long generally slow, low season with any hope of a coming festive season uplift already largely gone following the earlier introduction of the rule of six or the national equivalents. Increasing infection rates and the associated lockdowns and regional restrictions only serve to increase the likelihood that social interactions, especially in commercial hospitality environments will remain a, if not the focus of ongoing restrictions for some months to come. Even if and when the restrictions are lifted, normally there is very limited post-Christmas, domestic demand for both holidays and hospitality during January, February and into March.

The following Visit Wales update give a quick and easily understood summary of the position as it impacts on tourism in Wales and the basic level of support being offered to businesses:

The Welsh Government’s support page which gives access to more detail can be accessed at:

Tourism issues under Tier 3 restrictions within England

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I commented week or more ago on the unintended impact on tourism of what was then local regional restrictions in England; essentially the equivalent of the new tier 2 in the three-tier system just adopted (in England).  The key message was largely around the fact that the seemingly innocuous inclusion of a single household ruling for all indoor private and commercial social/hospitality setting was doing considerable direct damage to accommodation, pubs and restaurants and in destinations indirect damage to retail among others.  As far as I can see this is a problem that will continue to be felt by tourism and hospitality businesses in any area in England recently placed in tier 2 or forced to move up from tier 1 to 2 in the coming days, weeks or months. 

On Wednesday of this week Liverpool City Region, alone among those already under local restrictions in England, moved into the new tier 3.  As of today, Lancashire will be joining them shortly, with others likely to follow, subject to the ongoing negotiation between local and National Government.  These negotiations are essentially being driven, or held back, by discussion about additional funding beyond that laid down already (£8 per head of population?) and any national employment funding scheme monies available to all areas. These local funds will provide additional locally devised support to business beyond that already available via national schemes. Lancashire, for example, has just negotiated £40m (including the formulaic amount already on offer [£7m in their case?]) a similar total sum to that negotiated by Liverpool. Once divided between all the deserving (hospitality?) businesses on whatever basis locally agreed, it isn’t a large amount and critically, for now at least, it is a one off payment, not a rolling scheme available for the duration of any local tier 3 restrictions.  Details of Liverpool City Region’s funding scheme, administered by the 5 individual local councils, are now publicly available should anyone be interested.

 Early reports from Liverpool City Region suggest that tier 3 has had or will have, very serious impacts on an already fragile tourism industry and local visitor economy.  Of these, I wanted to highlight the impacts on the accommodation sector which technically is unaffected, at least that is, directly by the letter of the regulation.  There is no additional restrictions on hotels or other accommodation, let alone closure mandated. The accommodation sector can carry on as normal.  However, normal is from the position of large-scale cancellations and a fall off of already thin bookings following the introduction of the recent single household restriction (under the local area restrictions, now the equivalent of tier 2).  Critically they are now being expected to trade in an environment where, although hotels are not being closed, their potential guests are being actively discourage within the regulation from travelling into or staying in the tier 3 area.   Clearly a raft of other concern from personal risk through to worries about what’s going to open will have their impact on the visitor appeal of a tier 3 area.

As a consequence, there have been further mass cancellations and almost no future bookings across all types of accommodation, with initial pre-introduction of tier 3 occupation/booking level falling from a typically already poor 25 to 35% down to an average of 10% or less going forward.  More cancellations are expected to follow during the next few days or weeks as customers weigh up the future options. The potential last pre low season hurrah of half term has effectively been cancelled. Liverpool City and its surrounding areas, which includes a number of important rural and coastal resort destinations, have economies which are heavily reliant on visitors. The turning off of the already restricted flow of external visitors will have an impact on the customer base for the rest of hospitality, for retail and for a raft of other supporting business and those in their supply chains.

There are also complications around both the level of locally negotiated and national support for business forced to close or indirectly impacted. There are also difficult decisions to be made for pubs around enforced closure (with some compensation) or for a some the option of trading on in the manner of a restaurant, with the intendent financial risk that implies within an already seriously depressed and uncertain market.  There are similar issues for the likes of existing restaurants and retail who are not being forcibly closed but are being asked to trade on in an environment impacted by loss of visitor footfall and the further depressed demand from an understandably fearful local population. There are are no winners and as compared with the previous national lockdown, very thin if any compensation for the enforced restricted trading conditions or enforced or induced closures.

Rather than confuse or detract from the key immediate issue, that of the accommodation sector, I will try and expand on the wider economic issues I have just touched on here, next week, rather than do it now.  By then colleague in Liverpool City Region (where we are based) will have had time to assess and share some of the more of their immediate experiences of life under tier 3 which after all was only suggest a week since and started 3 days ago.  By then there may also more to say on what local support looks like here and may therefore look like in Lancashire and other places which doubtless will almost certainly, sadly soon follow. 

Tourism and UK Taxation in the news

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There was a couple of things in the news re UK taxation and tourism which you may have missed and which could well be lost in the gathering storm of news coverage on the enhanced local lockdowns already announced in Scotland and due to be announced for England later in the day.

The first is the Brexit relate decision to remove the VAT retail export scheme that applied to goods purchased by non-EU visitors to the UK, which will be of interest to any destination with an international visitor focus.  The move was one of a number of decisions made by the Chancellor in mid-September: but potentially lost among other higher profile issues. The scraping of the VAT rebate scheme on goods purchased from the end of 2020 will hit a number of retail centres particularly hard, for example Bicester Village. According to industry sources it will also seriously reduce the appeal of the UK as a destination within some key markets, an assertion which has prompted a number of more recent press reports for example:

A number of organisations are likely lobby hard for a change of heart. Normally, once such a decision is publicly announced I would have held out much hope. However, given the known impact on international visitor numbers and revenues due to covid-19 there is some reason to hope for a reprieve, at least until such times as international tourism in to the UK begins to, or has fully recovered.

Of potentially interest to all destinations will be news that in settling its own tax affairs with HMRC Airbnb has agreed to hand over detail of income of approach quarter of a million UK hosts for the 2017-18 and 2018-19 tax years. I assume but don’t know for absolute certain that this will now be an ongoing arrangement? 

HMRC are not pursuing an aggressive line on this but are simply saying, “We would encourage customers to check their tax affairs, seeking advice where necessary, in order to put right any honest mistakes or omissions”. Tax payers have in any case until 31 January to amend their 2018-19 returns.  For the time being at least, corrected errors or omissions are likely to attract little or no additional penalty.  HMRC can charge between 0 and 100% of the unpaid tax and interest on top of the tax itself as a penalty dependant on the circumstance and the degree of carelessness, deliberate action or culpable fraudulent intent. In the case of fraud HMRC can decide to launch an investigation, allowing them to look in detail at all tax affairs and recover unpaid funds back over a maximum period of 20 years. For some, simply having to pay outstanding tax and amend future working practices will be a major penalty in its own right.

Assuming that the anecdotal evidence that under reporting of taxable gains is wide spread, Airbnb’s cooperation could be a game changing event, helping to level an alleged, significant financial disparity between traditional accommodation providers and sharing economy platform-based providers. Importantly it could also further strengthen the arguments being made for similar access to operational information for other authorities charged with enforcing planning and fire and other basic consumer safety checks, whether that is through disclosure from the platform providers or via some form of robust accommodation provider’s registration scheme. 

In order to help the process destination managers may, now or in due course, wish to make sure that news of the Airbnb HMRC arrangements is widely publicised in their areas so that Airbnb host have the opportunity to check their tax status now well before HMRC start to take a more robust stance, as doubtless they eventually will. A typical, free access example of recent coverage is at:

I send out more confirmed detail when I have it.

Covid-19 update 8 Oct 20

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Although, held under Chatham House rules, I can confirm that the recent British Destinations, destination managers’ group meeting concluded that prospects for the tourism industry and the visitor economy remained bleak for the coming the winter months, with among other measures the implementation of the rule of six radically changing planning assumptions, especially those relating to a hoped for festive season lift within the hospitality industries.

Since our meeting on 24 September, we have continued to see a rise in covid-19 cases, particularly in the North of England and parts of Wales and Scotland with the imposition of a number of new additional local restricted areas.  In Wales 15 of the 22 Counties (local authority areas) are currently under additional and generally more stringent restrictions than their English equivalents. In England there are currently 6 restricted areas comprising between them of 42 full local authority areas and, following recent relaxations, parts of 3 others. Yesterday Scotland announced the closure of hospitality businesses for 16 days in the central belt and today, there are strong indications from Government in England that they are considering a range of similar short sharp measures for use in those areas where covid-19 infections continue to increase at pace. (announce later today, implement over the weekend?)

In England the impacts of existing local restrictions on business and in particular hospitality have been aired in the National media over the last week or so.  However, in those discussions one critical differentiating factor has not been adequately addressed.  In both the North East and Liverpool City Regions areas there is an additional restriction that limits visits to indoor hospitality to one household (as there is across all restricted areas in Wales).  While the additional restrictions in other Northern English areas are depressing trade, the seemingly small addition of a one household limitation in the North East and Liverpool City Region is all but killing it by supressing trade, in many cases, to a point below the level of day to day viability.

The one household rules for supporting hospitality businesses is a further complication for self-catering accommodation. Serviced accommodation, although technically still able to accommodate some mixed groups within the rules, are seeing cancellations and further falls in booking through a combination of understandable concern about voluntarily holidaying in areas of greater risk and the realities of wider family or friends groupings seeing little point in holidaying in circumstances where you can’t eat, drink or socialise anywhere indoors together. At this time of years generally older couples and mixed groupings of friends are far more prevalent than generally younger, single household family units. Meanwhile bars and restaurants are seeing a dramatic fall in custom from both visitors and, critically for shoulder and coming low season months, from local residents, much of the latter trade being driven by the desire for social interaction and by default therefore usually involving members of at least two households.

Venturing out for a meal at my local pub (Southport, Sefton, Liverpool City Region) I witnessed a group of three middle aged men being told that they could have a drink indoors but they would need to sit on three adjacent, socially distanced tables. They were able to do this and still converse, because this well run and consequently previously busy pub was all but empty at 8.30 pm on a Tuesday.  I doubt the three will be rushing back, on the off chance that there will three adjacent table available for them any time soon, if indeed the pub can remain open with more staff than customers. Similarly, a whole category of day to day trade from golf holiday groups through to “ladies that lunch” have been taken out of the equation by the simple additional of a one household restriction. Yes 6 from more than one household can meet outdoors at a hospitality venue (discouraged but legal) but rapidly changing weather conditions and darkening nights are acting to seriously limit the appeal of that option. That is only going to get worse as the year progresses.

I make no presumption about the rights and wrongs of the additional one household restrictions. I do however think it is vital that when local lockdowns are being discussed Nationally, we acknowledge that there are seemingly subtle differences that can have a major impact on the ability of tourism and hospitality businesses to trade through the resulting difficulties.  The addition of the one household indoors rule in the North East and Liverpool City Region and indeed to those areas under lockdown in Wales is one such subtle difference and one that puts them at significant disadvantage to those other areas in England under local lockdown, let alone to those areas which are not under local lockdown, or at least not yet.  The implications of the addition of a one household indoor restriction in any future local lockdowns needs to be widely understood and, thus, its consequences properly considered before it is imposed.

Clearly the concern about an indoor one household ruling may be overtaken by whatever the Westminster Government decide to do or not do with hospitality over the coming few days.  Regardless, the additional economic impacts of the current one household rule as applied in the North East and Liverpool City Region needs to be fully recognised now, if only to ensure that they are not at some later date applied elsewhere without due regards to full economic implications.

In addition, I have recently added the latest business research from Great Yarmouth to our Covid-19 research page at:

The headline business sentiment about future prospects that it contains, acts to confirm the general views expressed at our meeting discussed at the head of this update, and that was before we add to the mix the addition of several more local restricted areas and now the very real potential for new hopefully short, sharp hospitality focused local lockdowns across the UK. 

Our destination manger’s meeting on 24 September concluded that any early hopes that the industry merely needs to weather the winter and return to normality from spring 2021 onwards are now well behind us. Spring 2022 as a planning target for the start of a return towards normality is beginning to look increasingly opportunistic with the 2023 season becoming a more plausible target for a return to business as usual, or as near usual as the new normality allows. Much water has to flow under the bridge before then and much still depends on what happens over the coming low season and, as a consequence, what survives to trade at a viable level during the 2021 season; the bigger and better the foundations that remain in place the easier and quicker it will be for tourism and the visitor economy to build back.