As the last of our summer visitors start to plan their departure from the South West, with the resumption, for many, of a new school year, it is timely to reflect upon how well our regional tourist businesses have fared during the last few months.
If we looked back to the same time last year, an encouraging pattern was emerging following the devastating impact of the pandemic. 2023 saw a significant recovery in our visitor numbers. It is estimated that we had returned to around 95% of the pre-Pandemic level.
During 2023 the UK also experienced positive signs of a resumption of international travel. There is no doubt that there has been a global return of a “desire to travel” particularly for international tourists. This is largely driven by prices. The cost, for example, of travelling into Europe has never been more affordable.
The figures in 2023 were impressive. Overseas visitors to the UK increased to around 38 million up from the previous year of 31 million. These visitors were spending around £31 billion at least £5 billion up from the previous year. UK Tourism also saw a change of pace. UK outbound tourists in 2023 rose to a staggering level of 81 million up from 71 million the previous year. Spending rose to around £72 billion, an increase of £14 billion from the previous year. This suggests that the UK desire to travel abroad has significantly recovered.
The benefits of larger numbers of overseas visitors has however been a challenge for us. During 2023 the number of international visitors who only visited the London area was around 53% of the total number of tourists who arrived. London, both last year and this year, has been reporting high levels of international visitors. Sadly we know that this has not been the case in the South West with too few making the onward journey to our region.
So how has this year gone?
Are we finally able to say that the shadow of Brexit has gone away and the legacy of the pandemic is no longer an influencing factor?
In many respects the economics of UK householders is far better than the popular press might suggest. Indeed, household balance sheets are in general improving. Unemployment is lower than for 44 of the past 50 years. Wages are running ahead of inflation. Interest rates are finally on the way down. National economic growth in the last six months has been faster than any other G7 economy and the Pound is at an eight year high. Household savings are also sitting at a high-level.
All of this suggests that 2024 should have been a bumper year. In reality, however, we have seen a disappointing outcome. In round terms it is estimated that the region has performed at around 15% lower than in 2023.
There are many reasons for this . One of the greatest influences is the impact of weather. In this respect it has been unkind to us. Potential visitors to the region are now used to making decisions for an impromptu holiday over a matter of a few days rather than 10 or 20 years ago when summer holidays were booked at 3 to 6 months in advance. Today that booking decision might be as short as 2 to 3 days. If they spot a good weather window they will grab it.
This leaves our holiday industry desperately exposed. All the plans for the visitor arrivals need to be made. All the stock needs to be in place, all the staff ready and waiting in the hope that visitors will arrive. This is a truly nerve racking experience for those in the industry. One of our seasoned operators reported to me that they received 25% of their summer holiday bookings within a five day period.
Sadly there can be no doubt that many of our tourist outlets are still struggling with the aftermath of the pandemic. This reduced trade for many by 70%-80% thereby depleting vital capital reserves and limiting the ability to inject cash into the next holiday season. The need to replenish capital has also proved to be challenging because of the high interest rates and, sadly, to a large extent the attitude of our Tier-One banks who have seen the tourist sector as vulnerable and therefore high risk.
This has meant a quite desperate fight for survival for many of our brilliant operators. Sadly, during this period, we have lost far too many of our well established businesses.
There is nothing exceptional about the way in which Northern Devon has performed. Take, for example, one of the UK’s most popular tourist destinations – Cornwall. This has suffered just as badly with many similar problems.
The hope had been strong that this year would result in a late surge of bookings. We generally rely upon the school holiday period as the peak season, but there has been an increasing trend for September and October breaks. Very often the weather has proved to be kind during these weeks. There has therefore been a strong push to market this period.
It was perhaps a surprise and certainly a huge frustration that one of the reasons why a late boost has been disrupted is the statement made by the Prime Minister that the economy will get worse. This is a dead hand for ambition. Many households were beginning to feel increasingly confident about their own financial resources. Therefore the willingness to enjoy some discretionary spending has been rising. When the Prime Minister states that our economy is rocky then this confidence mood is rapidly eroded.
It is regrettable that the new government of fallen into such a simple trap by not recognising that they are as important in marketing the economy as all of our own marketing campaigns. Confidence is everything. Perhaps when the Prime Minister makes another statement like this he might stop and think rather than leaving us hanging in the air as to what bad news is yet to come. We will now have to wait until the budget in the end of October to know what he has in mind.
In looking ahead to 2025 we also need to make adjustments to the way in which we offer ourselves to an increasingly discerning tourist market.
Artificial Intelligence will be an increasing factor. The normal requirements for value for money remain, also high quality and excellent service are an essential part of the package.
Increasingly, however, we are seeing that new trends are driving demand. These include sustainability (clean and green) and a demonstration that the environment is an important part of our daily lives. This has become a clear part of demand. We are also seeing tourists attracted by offerings that include strong elements of health and well-being.
This is not new news to our brilliant tourist industry indeed we have been market leaders on a number of these issues . Northern Devon is already a powerhouse for Natural Capital. My predictions that this will be a key driver to the northern Devon economy within the next five years is beginning to materialise.
In 2025 we will be able to showcase our new shiny Link Road. This will help unblock the tedium of queuing.
The prospects for 2025 are therefore extremely encouraging. We may be a slightly slimmer sector, but fitter and more nimble. We have the ability to encourage households to stop sheltering their cash and come and enjoy our fantastic assets.
