Written evidence submitted by North Norfolk District Council
DCMS SELECT COMMITTEE – CALL FOR EVIDENCE
IMPACT OF COVID-19 ON TOURISM SECTOR
Response prepared by Steve Blatch, Chief Executive
Background / context:
North Norfolk has a strong and diverse tourist economy with 45 miles of coastline, taking in almost 50% of the Norfolk Coast Area of Outstanding Natural Beauty and the upper reaches of the famed Norfolk and Suffolk Broads network. The District has a population of over 100,000 people, living mainly in the towns of Cromer, Fakenham, Holt, North Walsham, Sheringham, Stalham and Wells-next-the-Sea.
The District has a traditional family beach holiday and Broads boating holiday offer, but has been increasingly successful in recent years in extending its appeal and season with strong demand built in the autumn season through bookings associated with the hugely successful Thursford Christmas Spectacular Show and the District’s niche retail offer. The North Norfolk Coast is also an important area for birdwatching, as well as walking and cycling, with these activities forming part of an increasingly strong and diverse visitor offer.
With its breath-taking expanses of fields and shores, to the quiet of its country lanes and elegance of its market towns, North Norfolk is a landscape which has been shaped, but not tamed, by history. Large numbers of visitors are attracted all year to the main coastal towns of Cromer, Sheringham and Wells-next-the-Sea. These towns have grown, over the centuries, from small, isolated fishing communities into bustling seaside resorts. Many of North Norfolk’s beaches have been awarded Blue Flag status for their cleanliness, facilities and management, with the district boasting six Blue Flags and one Seaside Award along its 45-mile coastline.
North Norfolk has a strong accommodation offer including self-catering holiday homes, chalet/park homes, caravan and camping sites, hire boats, independent quality boutique hotel offer and no national hotel chains.
Its wealth of attractions gives North Norfolk an enduring holiday appeal. It has all manner of museums and collections, entertainment and activities. There are grand mansions, National Trust properties, multiple sites of landscape character and wildlife value along with the iconic Cromer Pier. The district’s living history in itself is also a powerful attraction with a fantastic array of medieval churches, ancient buildings, quiet pubs, craft centres, steam railways and Deep History Coast trails along its coastline.
North Norfolk is heavily dependent on the visitor economy, which in 2018 comprised 29% of the District’s employment and generating £511m from 9.6m trips. Through marketing and investment in infrastructure, visitor numbers are increasing through the year but spring and summer still account for the majority of trips and spend. The visitor economy is critical to the sustainability of retail and hospitality businesses in and around the district’s seven market and resort towns.
Significantly, the strong visitor economy is also increasingly supporting the development of a strong artisan food and drink manufacturing sector, based on local crab and seafood, but also taking in other foods including cheeses, specialist meat and pies, cakes and desserts and a wide range of alcoholic and non-alcoholic drinks. Some of these products are sold through local pubs and restaurants, independent delicatessens, farm shops; farmers’ markets and food fayres but increasingly such specialist food businesses are also serving distant markets via online mail order strategies, supporting jobs in the wider economy. Similarly, there are an increasing number of artists and craftsmen operating from studios which sell their wares locally through galleries and gift shops and then through online channels.
Q 1 - What has been the immediate impact of Covid-19 on the sector?
Tourism is considered to be one of the hardest hit sectors by the pandemic with a collapse both in demand and supply. The sector has experienced a rapid and sharp drop in demand and a surge in job losses putting many SME businesses at risk. Businesses all along the supply chain in the sector immediately faced major cashflow issues and many SMEs and micro-businesses having very limited reserves or overdrafts.
Covid-19 has hit this region’s economy hard. Coming in March at the very beginning of the 2020 visitor season, Covid-19 has impacted hard upon business confidence when normally businesses would emerge from the lean winter months and be preparing for the busy summer months ahead. With the early part of the 2020 season lost to trade and continued uncertainty about when businesses can re-open and levels of confidence amongst visitors there is a very real concern that many tourism businesses will essentially be operating through three ‘winter seasons’.
Non-delivery of some of the district’s scheduled major events will also have a huge impact on industry businesses such as the 1940’s weekend in Sheringham, Holt Festival, Cromer Carnival, Holkham Country Fayre and numerous music concerts and other festivals.
When the furloughing scheme was announced this brought much relief although businesses faced challenges on making payments initially before being reimbursed.
Mental health issues were created for owners struggling to keep businesses from closing and meeting obligations to staff and suppliers. Laid off staff also experienced mental health issues caused by difficulty in paying for mortgages, rent, food, heat etc and in coping with childcare while trying to work. Many are anxious and stressed over redundancies already taking place in the sector and the security of their jobs.
In responding to the Covid-19 crisis the Council’s priority actions have been to:
North Norfolk District Council has taken a proactive approach to track the effects of Coronavirus on the tourism industry. This is a rapidly changing situation and it is important to monitor developments.
The Council therefore commissioned two business surveys in North Norfolk to evaluate the immediate and ongoing impact of Covid-19 on the tourism sector.
The first being a telephone survey undertaken in April 2020 to a number of key sector businesses including hotels, entertainment, holiday parks, pubs and restaurants, leisure boat hire, animal parks, stately homes and estates, steam railways, nature parks, holiday cottages. Such businesses included:
One of the over-riding messages coming out of the businesses contacted, particularly visitor attraction businesses, is that they are facing a ‘three-winter’ scenario that will take many years to recover from (if they do indeed survive) and have limited investment in their product and offering.
The second survey undertaken was an online Business Survey based on a ‘have your say’ online platform style survey. The report evaluated the immediate and ongoing impacts of Covid-19 to tourism businesses in North Norfolk and formed part of a wider industry survey across the East of England region.
From the 128 businesses that took part in the survey, the largest respondent groups were accommodation providers and tourism attractions/experience providers. A large majority of businesses closed temporarily and just under half furloughed some of their staff and as a result of these measures, and at the time of undertaking the survey, very few reported permanent business closures.
Staff and employment changes:
Impact on bookings and performance:
Business management and support:
Impact on staggered reopening on businesses:
Approximately 70% of business activity in the tourism sector happens between April and October. Reopening to visitors in a safe manner to ensure businesses can benefit from the summer season will be imperative to the recovery and to ensure resilience through the low season.
As lock down is relaxed and businesses begin to reopen, we must position ourselves to recover in a way that will be fit for a very different tourism and hospitality landscape and we must take advantage of any opportunities that arise.
North Norfolk has also had to respond to other challenges. Warm weather has led to the increase in day visitor numbers to the North Norfolk coastal towns and villages putting pressures on the council to re-open its toilets, public toilets and open spaces.
Traffic issues have been exacerbated in rural tourist hotspots with constrained parking, few controls, negligent driving, speeding and dangerous parking. Drivers are coming into conflict with police and are opting to park irresponsibly and take tickets.
The sudden increase in visitors is also causing tension in local communities with confrontations between residents and suspected visitors, including second home owners who have travelled to the area to ‘lock-down’. Destination Management Organisations indicate residents are attempting to report people in camper or caravans. Residents are fearful of the spread of Coronavirus in their communities which could be increased by the increase in visitors to the area.
Ultimately, it’s the destinations, venues and businesses that are fundamental to our tourism, hospitality and culture offer. These are what we must support to recover from the Covid-19 crisis.
Q.2 - How effectively has the support provided by DCMS, other Government departments and arms-length bodies addressed the sector’s needs?
In order to set about a resurgence of our visitor economy, collaboration will be vital.
Many businesses have seen the benefits of the Government’s Furlough Scheme and many hope that the scheme can continue moving forward, especially for businesses that are not yet able to open up.
Business Grant Scheme – the Council has paid out over £51.6m of original grant monies to approximately 5,000 businesses.
Business Rate Relief has been crucial for businesses.
Discretionary Grant Scheme – NNDC has been awarded £2.76m to help other businesses, mainly in the hospitality and tourism sector who were not able to access business grant monies. This has been crucial in helping businesses in the sector with cash flow and in keeping staff rather than making immediate redundancies.
Market Towns - Reopening High Streets Safely project – NNDC received a population based allocation of £93,332 from this additional fund from the MHCLG to help put in place social distancing management measures in our town centres. The Council is working with the County Council and local town centre representatives to agree measures so that businesses can safely begin to reopen in the weeks ahead. The Council continues to provide business support and advice to our many businesses across the district. Updated Government workplace guidance for food outlets and offices has also been welcomed.
Government financial packages have been welcomed but more intervention is needed if segments of the sector are to get through the winter and be viable in 2021.
Visit North Norfolk, with financial support from North Norfolk District Council and the VisitBritain Resilience Fund to retain the Brand Manager in post during the lockdown months (as opposed to using the JRS) to not only create a recovery strategy and plan but to also enable Visit North Norfolk to provide local business support in the following ways:
Q.3 - What will the likely long-term impacts of Covid-19 be on the sector, and what support is needed to deal with those?
Overseas tourism is unlikely to recover quickly, and staycations represent a real chance for domestic destinations. DMOs / LAs will be competing against each other nationally for the same share of market, yet funding will be tighter. A more level playing field of funding will help, in particular, coastal communities have a larger share of voice in a saturated market. Increased marketing spend and greater collaboration/information sharing will be helpful and a better use of resource.
A priority for the sector, post-pandemic, is to invest in boosting productivity, encourage innovation and enhance digital skills. Skills training for businesses will be key in a post-pandemic world to help them thrive and expand their offering such as digital development. Innovation funds for businesses to help adapt e.g. provide remote food ordering in restaurants via an app, help high streets develop an online offering to supplement in-store offering. Also about Broadband and mobile infrastructure which is poor across North Norfolk.
The longer the crisis goes on, the number of businesses that won’t reopen increases.
The sector survey has highlighted new opportunities and priorities for North Norfolk and the region that could aid recovery and support the long-term sustainability and resilience of the sector. There is an opportunity to lead the way in environmentally-friendly tourism that also promotes and supports local businesses and supply lines to keep value in the local economy. We should use the reset to change consumer behaviour to consider wider questions like sustainability, over-tourism, and the social and wellbeing benefits of supporting local businesses, producers and environments.
We also need to develop our year-round visitor economy and mitigate the current reliance on Easter-September. This should be a key objective, using our natural and built capital and the fact the area has the best overall climate in the UK. Understanding global and national trends and developing our product to meet new and emerging customer demands is a necessity.
We need to work together across a partnership of DMOs, Local Authorities, the New Anglia Growth Hub as well as business representatives and trade bodies. This coalition will ensure every business has access to the help and support they need. We need to restore confidence and provide a safe experience for businesses, residents, workers and visitors. We need to develop new models of collaborating and networking so that our organisations and businesses can share experiences, learn from one another and explore mutual opportunities.
Specific operational difficulties anticipated when looking to re-open businesses and Government assistance and guidance required (identified in our business surveys):
Government guidance to increase consumer confidence•
Safety of staff
Ongoing support with cash flow to fund operational costs
Q.4 - What lessons can be learnt from how DCMS, arms-length bodies and the sector have dealt with Covid-19?
Mixed messages from Government about lifting lockdown. Prime Minister’s statement of the 10th May allowing people to travel unlimited distance for exercise/wellbeing has created real tension and pressures on rural and coastal communities with parking and public toilets closed and no advance planning to open up quickly in response to large number of visitors. Many in those communities are elderly and were fearful of visitors bringing the virus to an area which thankfully has low levels of infection.
Clarity over eligibility in accessing grants. Holiday letting agents letting furnished accommodation but where grants were paid the property owners and bed and breakfast’s paying Council Tax addressed through Discretionary Scheme.
Guidance and opening dates being left to the last minute has left uncertainty with the tourism sector as they cannot plan for opening. Businesses are putting time and effort into processes that might change and have started to take bookings for opening dates but again these may be changed with late notice. Most of the sector are finding this hard to plan for and put into their business models.
Q.5 - How might the sector evolve after Covid-19, and how can DCMS support such innovation to deal with future challenges?
Many of our district’s businesses have shown great agility and innovation and been able to adapt under the current restrictions i.e. pubs and restaurants are doing takeaways, some with apps for customers to make their bookings; some businesses and attractions have offered virtual tours online and some events are also going digital including food festivals, and carnival activities.
Examples of innovation and adaptability across the sector highlight the need, as suggested in the Tourism Business Survey, for more networking, better communication, peer-to-peer learning and cooperation as well as better use of digitisation and technology to build resilience and harness new opportunities-
The impact of the crisis is being felt through the entire visitor economy. Reopening and rebuilding destinations will require a joined-up approach. Our collaborative recovery plan recognises that getting the visitor economy back on its feet cannot be achieved by one partner alone - we have always been more successful when we work together.
The crisis is an opportunity to drive innovation and improve productivity, as well as boost the region’s profile as a destination.
Whilst the pandemic has posed huge challenges to visitor economy businesses, this period of disruption has been a strong driver of collaboration, creativity, and innovation. The measures we put in place today will shape the visitor economy of tomorrow. This why it is critical for us to collectively use this opportunity to consider some of the longer-term actions we need to take to rebuild our destinations, develop a year-round visitor economy, and encourage innovation and the transition to a low carbon visitor economy.
As the Government gradually relaxes the lockdown, businesses in North Norfolk need to have clear advice and a coordinated message. Intelligence from the sector demonstrates the concerns of business about the implications of social distancing on business operations. Partners need to work together to ensure the business community has access to the right support and information.
The following comments and key priorities were identified from our business surveys:
Regulatory actions and policy
Support with Health and Safety concerns
Further or continued financial measures needed from Government in the recovery period when restrictions begin to lift:
Changes to Business Charges
Other financial support
Extend Grant Schemes
Grants to cover loss of income (rather than loans)
Additionally, greater forewarning of changes in regulations or guidance would be welcome. National communications are needed that reach all visiting cohorts regardless of place or origin. This must balance the need to attract tourists with the challenges of accommodating demand and of spreading visits beyond the regular season.
Local economic intelligence is considered critical as two recent research studies have suggested the North Norfolk economy will face significant impact and challenge as a result of the pandemic moving forward, to which the Council and a range of partners will need to respond with one study predicting that the North Norfolk economy might see a 39% decline in economic output as a result of Coronavirus and another which identifies North Norfolk District as the 14th highest local authority area at risk of job losses due to Coronavirus with 31% of jobs at risk due to the area’s dependence on the tourism and hospitality sector.
Tourism generates cultural, economic and social value and it is certain that tourism activity will recover, but it depends on the professionals in the sector acquiring the capacity to align themselves with this new conception of the world and transmit values of security, freedom, authenticity, trust and respect of life and the planet. (The Tourism Industry and the impact of Covid-19 – Scenarios and Proposals by Antonio Santos del Valle – April 2020)
This is the scale of our challenge.