Written evidence submitted by Visit Dorset

DCMS Call: Impact of Covid-19

Tourism: Visit Dorset (part of Dorset Council)

Evidence Base

WHO:

Response from Visit Dorset (part of Dorset Council), one of two DMOs covering the county of Dorset. Approximately 500 tourism businesses are represented by Visit Dorset through paid partner/membership schemes.  We offer support and marketing across all sectors of Dorset’s tourism industry.

This evidence from Visit Dorset is made up of feedback from 1000 businesses via a ‘business barometer’ survey conducted with the Dorset tourism industry in April 2020. A copy of the survey findings can be provided.

We also consulted with the Dorset Tourism Association (DTA), a CIC trade organisation, representing tourism on the Dorset LEP.  The DTA board is made up of representatives from each sector of the industry together with the two local authority DMOs.

Tourism is a significant driver for the Dorset economy valued at £1.8 bn and providing a GVA of £1.2bn. It also supports over 43,000 jobs in the county (2018 figures, South West Research Company).

29.4 million visits were made to Dorset in 2018 as either a day trip or overnight stay, this is equivalent to half the population of England coming to visit the county.

Tourism boosts the economy by supporting small and medium sized businesses throughout the county, bringing vitality to urban, rural and coastal communities.  The area encompasses popular seaside resorts, the Jurassic Coast UNESCO World Heritage Site and designated areas of outstanding natural beauty (AONB).

Main Feedback Points:

The Government announcement on Sunday 10th May, allowing people to travel any distance for a day trip was an unexpected and unwelcome message.  Visit Dorset along with many other DMOs had anticipated a ‘stay local’ message in the first stage of the easing of lockdown restrictions to enable us to respect and support our local host communities.  Dorset is within easy reach of main population centres and together with the south west having the lowest infection rate in the country, this makes it a very attractive destination for a day trip. This message has caused an unnecessary strain on our local residents and teams operating local car parks, Public Toilet facilities and country parks.  Our message in the immediate future will be that beach car parks and country parks will remain closed in the Dorset Council area to safeguard the health of our local community and ensure they can enjoy their outside space safely.  While we are keen for the tourism industry to restart, this needs to be done carefully, and with all facilities re-opening in a managed way to cater for them with social distancing measures in place.

Discussions with the industry have highlighted the need to know the ‘rules of the game’ with as much notice as possible ahead.

We welcome the introduction of the VisitEngland accreditation scheme/guidance to build confidence that tourism businesses re-opening are taking all reasonable measures to open in a managed way .  Toolkits and risk assessment guides need to be provided ahead of re-opening dates.

If Central Government want to control a staged opening then there needs to be some form of regulation for accommodation providers. AirBnB should not be allowed to operate for holiday makers and visitors before the regulated providers.

Communities need to be supported and led by government guidance, to embrace the return of visitors to their area and be assured that the industry is operating safely.

Question 1:   What has been the immediate impact of Covid-19 on the sector?

Dorset is essentially closed to visitors and the tourism industry has ceased temporarily.  However, being closed to visitors does not mean business are cash neutral – many are cash negative as many businesses with a ‘site’ to maintain are typically still paying around 30% of running costs, even though the venue is closed e.g. The Tank Museum at Bovington currently has outgoings of £100k per month but no income.

In a statement to the local press, James Weld whose family own the Lulworth Estate, has furloughed more than 140 estate staff and is operating on a skeleton of 20 people.  He stated that the pressure to retain cash and liquidity was the single most difficult immediate aspects to deal with. (Full press release can be provided).

The duration of the lockdown restrictions will impact on the long term survival of tourism businesses in Dorset.  79% are likely or highly likely to survive if lockdown ends in June 2020, this drops to 44% if lockdown continues until September and 26% are likely or highly likely to survive if measures are still in place in December 2020.

Other key points:

• The arts & culture gig economy and seasonal staff are vulnerable and few qualify for support.  Supply chains for the events sector are also struggling (caterers/backstage teams etc).
• Income through membership to both the DMO’s in Dorset (Visit Dorset and Bournemouth, Christchurch and Poole tourism teams) is currently frozen and this will impact on support for the industry longer term.
• Business interruption insurance does not include Covid-19, a new disease, as a reason for closure, impacting on tourism businesses who cannot make a claim.

Key survey results:

• Over 80% of businesses across Dorset have chosen temporary closure (rising to almost all among accommodation, Night Time Economy, Attractions and international education).

• 63% of all businesses are applying for government support.
• We are aware of 60 permanent business closures in Dorset and 61 businesses have permanently laid off staff.

Return to profitability across Dorset is affected by the duration of the lockdown restrictions

• Restrictions end in June - 54% say it will take more than 6 months, 23% more than a year to return to profitability

• Restrictions end in September – 83% say it will take more than 6 months, 51% more than year to return to profitability
• Restrictions end in December – 90% say it will take more than 6 months, 71% more than year to return to profitability.
• All business (except retail) have seen a significant decrease in bookings to date.
• A key headline to take from the Dorset business survey is that an end of June re-opening will result in the risk of 20% of tourism businesses (8000 jobs) and an end of September opening will result in over half the industry at risk (over 20,000 jobs).
• The fundamental feedback from businesses is that there is a need to extend and modify the rules of furlough and the need for continued government support for the sector.  Even when businesses re-open, it will take time to generate income and the need for financial support will be ongoing. 

Question 2: How effectively has the support provided by DCMS, other Government departments and arms-length bodies addressed the sector’s needs?
 

Our business survey results show that the Job Retention Scheme, Business Rate Relief and small business grants have been accessed by half of the businesses in Dorset.  This support has made a significant difference to survival of all types of businesses across Dorset.

Other key points:

• Whilst the furlough scheme is generous it is not comprehensive enough to protect the seasonal workers who returned on 1st March.
• Grants are being accessed for those that can, but businesses who don’t pay business rates yet have on going costs and are not eligible.  Companies such as boat charters, mobile catering units and tour guides are all affected but not able to access the £10k business grant offered.  The new discretionary grant scheme may help but has not been made available yet as guidelines have only just been released.
• A deposit voucher scheme backed by the government would assist accommodation providers (happening in other countries).
• A number of performance venues are at risk of closing permanently in the near future without any support
• The rateable value cap is not high enough for big venues to access and an issue for Dorset businesses in prime locations where rates are high; some businesses above £51k cannot access loans through banks; the way businesses are rated is not always consistent resulting in similar premises not having the same access to funding.

Question 3:  What will the likely long-term impacts of Covid-19 be on the sector, and what support is needed to deal with those?

Once restrictions are lifted the risk does not disappear and full recovery is unlikely until the 2022 season. Longer term, the tourism industry needs ongoing support for at least the next 12 months.  Social distancing measures is likely to mean that businesses will be unable to operate at full capacity and financial support will be required to see them through this restricted period in order to keep staff employed, afford running costs and avoid cash flow problems.  Businesses are also likely to incur costs to implement social distancing measures.

Whilst tourism businesses may be open, the usual visitors may not have the funds available, may not feel leisure spending is their priority or may not feel safe returning to venues until the threat of the virus has vanished or become negligible.

If lockdown restrictions mean that businesses cannot open until October 2020, many will not survive.  Having been cash neutral/negative for the summer season, they will be entering the off peak season – so financial support will be needed

Other key points:

• Staff will require training, systems will need to be amended, hygiene and safety issues will need to be addressed – all come at a cost so assistance from government  will be vital
• There will be cash-flow issues for entertainment venues where events or show tickets have been purchased but the shows postponed.
• This pandemic may provide an opportunity for the domestic tourism market to grow whilst international markets are restricted.
• Anyone relying on a large percentage of overseas visitors will need to consider concentrating on domestic visitors.
• The profile of tourism, the income and jobs it generates within the sector should be raised within Central Government as a result of the current situation.
• The demographic of visitors to Dorset may change – currently a large proportion are in the older 60+ bracket.  Businesses will require marketing support via their DMO and from VisitEngland to help encourage new markets to the county.

Question 4: What lessons can be learnt from how DCMS, arms-length bodies and the sector have dealt with Covid-19?

At this stage it is felt that this question is not a priority and needs to be looked at fully when the pandemic is nearing its end and the tourism industry is up and running again.

Question 5: How might the sector evolve after Covid-19, and how can DCMS support such innovation to deal with future challenges?

Businesses are looking at new, more local markets and ways of adapting their business model.  Changes being considered include pricing, moving to a more digital approach, changes to opening hours, social distancing considerations, switching marketing to local and domestic, changing from serviced to self-catering operations.

Government support / advice /guidelines on how to adapt the sector in a new and different market place and build consumer confidence is key to the future of the tourism industry.

This is an opportunity to rebuild and re market the UK’s domestic tourism industry and for government to give financial backing and full support to an industry which has been proven through this crisis as critical to an area’s local economy