Ones to watch
Four relatively recent events in the news:
1. Bourne Leisure. Following Blackstone’s January 2021 majority acquisition, it has been announced that Rothchild’s have been appointed to explore the potential to dispose of Butlins, leaving Blackstone’s and Bourne Leisure’s management to, “focus their attention on”, Haven and the adults only Warner Leisure Hotels. Bourne Leisure, Britain’s biggest leisure business employing 14k staff at peak periods, saw sales halved to £507m last year (2020), which, despite an offset from staycation bookings, resulted in a pre-tax loss to the group of £152m.
In a normal year I would have marked this possible sale as one just to be aware of, given the group’s consequence to domestic tourism as a whole and the continued importance of Butlins, its smallest component, to the popular domestic offer. This of course isn’t a normal year and I am pondering whether the potential move may in time tell us a bit more about the recent fortunes of domestic tourism and give some clues to the direction some of the key players think it may be heading? It may of course simply be a major investment fund doing what they do and restructuring its acquisition in order to drive a decent and in this case early return?
Butlins is reported to have an estimated value of between £200m and £250 m. As such it is unlikely to be an impulse buy for anyone. It is to be hoped that if the sale does go ahead, it will be to a major player who has the will, vision and means, like Bourne Leisure, to continue to nurture and grow the business, rather than sweat the assets and brand as we have seen done on other occasion, elsewhere. I would argue that Butlins as a brand has an importance to the domestic market that is far bigger than its remaining portfolio of just three major sites, might at first sight suggest? Moreover, combined those three sites remain of significant importance to popular domestic tourism by value and volume and of course are invaluable, if not irreplaceable, assets in their host communities of Skegness, Bognor and Minehead.
2. Second and holiday home and tourism taxes in Wales (and beyond?). The Welsh Government have recently announced a funded, pilot scheme commencing in January 2022 and a further parallel national consultation on the issues surrounding second homes and short-term holiday lets. The pilot undertaken by Gwynedd Council will seek to establish what can be done under existing or amended planning regulation. Next steps confirmed to tackle impact of second home ownership on Wales’ communities | GOV.WALES . Meanwhile, the consultation conducted by consultants, rather than by a full public consultation, into the merits and demerits of statutory registration in Wales continues. Its findings, dependent on release date, may be illuminating not just in Wales but also for England’s during the promised DCMS consultation on the same issue.
In addition, as part of the three-year deal agreed last week by Welsh Labour and Plaid Cymru, a potential “capping of second home ownership” and the introduction of “local tourism taxes” feature in the list of 47 policy areas to be addressed by The Welsh Government. The list is wide ranging and includes some really big hitting and difficult issues that dwarf those of the tourism industry. It is not yet clear what, how and indeed if everything listed will be taken forward. Nonetheless, the fact that an issue is listed for consideration has to be regarded as significant in Wales and potentially beyond. As of course are the ongoing development in Scotland in these areas, where they are somewhat further advanced than in either Wales or in England. https://www.bbc.co.uk/news/uk-wales-politics-59416344 .
3. Second and holiday home issues and abuses in England. In Westminster a Lord’s questions in early November sought answers on the Government’s promised plans to tackle the misuse and fraudulent abuse of short-term holiday home rules and business rates and rate reliefs. It also sought confirmation of when the findings of the 2018 public consultation on these issues might be published. The Minister of State, Lord Greenhalgh’s short responses to a series of questions, individually and combined, are enlightening.
The responses suggest that Government are entirely supportive of genuine short-term holiday lets but now wish to limit known abuse by confirming businesses have actual met the minimum days offered and let criteria, before allowing owners to register as a business. How that is to be done, in practice, and other critical detail, like whether this will apply retrospectively to businesses already registered, perhaps be done annually going forward or apply to new applicants and/or once only, will doubtless be revealed when the extraordinarily overdue 2018 consultation findings are published and the plan emerges. It is hard not to conclude that if the minimum letting days rules where not so easily ignored or abused or so difficult to enforce, we wouldn’t have been having these discussions in the first place. The devil will be in the detail, hence perhaps the inordinate delay?
Lord Greenhalgh on a slightly different tack also restated Government’s support for the sharing economy. He acknowledged concern about “uneven regulatory requirement in it” and cited the commitment in the Tourism Recovery Plan to consult on the introduction of a tourism accommodation registration scheme in England. Let us hope it appears soon and its findings are published and progressed rather quicker than those of the 2018 consultation. https://www.theyworkforyou.com/lords/?id=2021-11-04a.1343.5
4. Local solutions and national lobbying angles. Last week East Suffolk Council (of Aldeburgh and Southwold fame) were the latest in growing list to publicly vent their frustration, at either the harm being done to community cohesion by second, holiday home and short term lets, the immoral and illegal abuse of the businesses registration and rate relief systems by owners, or elements of both. In East Suffolk’s case they have essentially resolved to use the very limited powers they have to make life as difficult as possible for those registered as businesses that are not actually businesses as they can. They are threatening to do things like withdrawing free public bin collection and free use of recycling centres, removing free resident parking permits and enforcing applicable business safety standards. E.I. treat them as any other business and not as residential properties that have quietly slipped into a claimed business usage.
How that pans out in practice, at what administrative or revenue cost to the Council to enforce and critically what the intended or unintended consequences for genuine, legitimately registered accommodation business will be, isn’t particularly clear (to me) yet. My initial reaction is that it’s a brave but potentially costly and ineffective solution that few other Councils could easily emulate (I suspect due to the nature and scale of the places involved identifying those gaming the system might be more easily achieved than in say Cornwall or a major urban destination?). Hopefully, if nothing else, it might reinforce the message to the Westminster Government that local political (in East Suffolk’s case Conservative led) and public patience is wearing paper thin in many popular tourist areas and destinations, a situation that can’t be allowed to go on unchecked for much longer.
From a lobbying perspective we and the current administration, in particular, should be asking ourselves, “where do the majority of second and holiday owner, including many operating in the shared economy, actual cast their votes in national elections?”. My instinctive is that it will be at their main residence, not at their second or subsequent properties. In many cases that will not be in the constituencies impacted by the current rash of holiday homes, housing and ownership issues. That may mean that any incumbent Government is unwittingly risking the wrath in a general election of the genuine local residents, if they now fail to effectively address this problem and soon.
It’s a different matter of course in local and other elections, in England at least, because it is technically legal to register and vote in local election in more than one residence you own, provided it is not in one Council area. That said there apparently needs to be a degree of permanence in your residency. If you’re claiming to let the property for a cumulatively long period that could be in serious doubt? I am not fully up to speed on the finer points of registration and local voting regulation. If anyone fully understands chapter and verse for one or more home nations, do please let me know what the essentials are. Let’s just hope that national, or even local election voting fraud isn’t one of the next potential scandals to unexpectedly fall out of the second and holiday homes debate!
I am jesting, I hope, about election fraud but I do seriously think the voting implications for National elections are at the very least food for some serious thought? Particularly, in the coming months as we try to reason with Government about mutual supporting solutions that maintains a healthy tourism economy, without killing off the communities that are supposed to benefit from tourism or without damaging the physical and social infrastructure that tourists ultimately come to enjoy in the first place. https://www.bbc.co.uk/news/uk-england-suffolk-59428954