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.