Written evidence submitted by the West Midlands Regional Board for Tourism
Response to DCMS call for evidence on the impact of Covid-19 on the Tourism sector of the West Midlands
19th June 2020
Covid-19 has created an unparalleled crisis for the region’s business community, with the tourism sector the first to be affected and continuing to bearing the brunt. The Regional Board for Tourism has called on evidence gathered by West Midlands Growth Company and Shakespeare’s England DMO, collaborating to run a regular survey of hotels, conference venues and attractions across the region. Five waves of survey have been undertaken, with a sample of circa 50-100 tourism businesses per wave. 200 business in total have submitted responses across the 9 weeks of lockdown to end May 2020.
What has been the immediate impact of Covid-19 on the sector?
Before 1st March many businesses were doing well and looking forward to the coming year with optimism.
The furloughing scheme is the most popular form of support with more than three quarters saying that they felt it was useful or very useful. The next most popular were VAT deferral (60%), business rate holidays (58%) and income tax deferral (40%). The support seen as least useful was the £25,000 cash grant (37%, primarily due to many businesses not being eligible owing to the £51,000 rate ceiling) statutory sick pay relief (27%) and business interruption loans (20%).
But businesses have highlighted a number of issues and problems with the support on offer:
The increased flexibility to bring back employees gradually has been welcomed. For some, including cultural sector partners and business tourism venues, the end of the furlough scheme simply will not allow them to retain staff, as they still will not be able to open. Redundancies have already commenced.
The region’s tourism businesses recognise the need to re-design their business models, re-build their cash position and deal with what may be a long and drawn out recovery in demand. As referenced above, a more flexible furloughing scheme would be helpful for this, and businesses also highlight the need for long term financial support to sit alongside the more immediate assistance offered so far.
Support from government in the following areas will help the industry to recover
International students are a critical part of the region’s economy, and attract thousands of visiting friends and relatives (vfr) visits each year.
The China education visa is different from other student visas. Our universities’ overseas student numbers are likely to reduce significantly next academic year, having an enormously detrimental impact on their financial health. Align Chinese student visas with other international student visas to encourage uptake.
Request to review Package Travel Regulation so that it applies only to packages which include a travel (coach, flight, train) element.
The PTR was conceived to protect consumers who were purchasing different elements of their holiday or break from a single provider. This could be a tour operator, online travel agent, or even a hotel, B&B or destination management organisation (DMO), which sells associated elements which become a package when bought within 24 hours of one another.
This makes sense when a holidaymaker is offered a flight, transfer and hotel as one deal – if any of the elements does not function the promoter is duty-bound to support the customer. However, it also applies if a B&B offers a well-being break which includes a local supplier offering a restaurant meal, and a local spa offering a massage. It makes the ability of businesses to make sensible links with other local businesses uneconomic, as the duties become too onerous.
VAT break. A phased return to VAT levels over the coming year: 0% to 20% increasing by 5% per quarter once each business is able to reopen.
Venues and hotels, restaurants, theatres and attractions will all have to invest in social distancing measures (self check-in pods, new furniture layout, screens between customers and staff and between booths, booking-only policies for restaurants and bars, reduced delegate / visitor / audience volumes, improved AV to live-screen content between conference and meeting rooms to manage social distancing, additional cleaning, PPE for staff, training etc.) Even as demand slowly returns, these all add high costs to operations for far lower returns, because customer / delegate / audience numbers will be severely curtailed.
Ask – for venues and events. Echoing the BVEP request, the government must distinguish between organised business events where ticketed delegate flow in convention centres and venues can be managed, and mass free-flow gatherings where this is not possible. Let’s not be seduced by the apparent ease of a blanket ban by number on gatherings, and miss the opportunity to nurture the return to business visits and events.
Ask – Funded campaign extending warm welcome to the West Midlands across leisure and business tourism sectors to build the narrative that the urban areas are open for business and still provide that gateway to the rural areas.
Sustainability - that we keep the values of sustainability and environmental awareness at the heart of our return to business across the sector. The government’s agenda to support measures reducing carbon emissions and fighting impacts of climate change must remain at the heart of our recovery activity. When Covid-19 is a collective memory, the disaster of climate change will be with us. We will be judged by our values now, in extremis, as well as further down the line.
Birmingham Airport, our international gateway, has played its part in Covid-19 – becoming part of the response infrastructure. Their fixed costs continue and they have but a handful of flights a week. Return to international travel is also dependent on other nations’ controls, and carriers’ ability to resume operations. VisitBritain is not anticipating any significant resumption of international business this year.
Airports’ expertise to be central to any regulatory changes in managing flights and passengers
On-going exploration of travel corridors to countries with low infection rates
Judicious abolition of 14-day quarantine for particular leisure and business tourism inbound markets
The single key lesson to be learned is that support to businesses must be facilitated quickly. A significant number of early responses to the first waves of our survey demonstrated this frustration because they were concerned that they may go under before it arrives.
The communication from VB, the Tourism Alliance and Trade Bodies has been exemplary. This has allowed DMOs to share accurate and timely information with their industry partners.
The forced isolation has accelerated the use of technology for communication and enabled flexible working from home for those for whom this is possible – it has driven virtual and digital responses to the outbreak from tour guides, cultural and arts partners.
The value of having access to a private outside space or a large public outdoor space is being realised and health and wellbeing, already a focus before the pandemic, are at the forefront of people’s minds. The ability of people to take a domestic summer break will therefore be immeasurably important to many. Clear guidance for re-opening, as soon as possible, is critical to the health of the tourism sector.
Many companies have adapted their business models to cope with the challenges. Much of this is a short term fix, and two thirds of businesses will not retain the changes after lockdown ends. There are, however, some examples of successful adaptations – notably relating to digital and on-line approaches (for example more active use of on-line content, digital channels, on-line sales and offering on-line tours) - which are likely to be sustained in the longer term and may benefit from support from DCMS.
Looking towards the recovery phase businesses are also looking for (i) support with marketing and promotion and (ii) market intelligence and insights to help identify new business opportunities.
Innovation will be key for all re-opening businesses. There are many challenges ahead.
Transport is a critical part of the visitor experience. Innovations in design and hygiene on public transport will be critical to encourage a return to mass transport, rather than the use of private cars, which are difficult for urban and rural honeypot areas to manage in terms of parking and traffic flow, in addition to maintaining high air quality, low noise pollution and excellence in public space design.
We are already seeing business failure in the retail sector, even as the high street re-opens; retail is a critical element of the tourism offer. With cultural venues and conference and event venues yet to open, and theatres unlikely to reopen soon, there will be fewer businesses to service our visitors, to maintain the vibrancy of towns and cities, and to attract new visitors in the longer term. An on-going focus on the high street and new ways of stimulating urban vibrancy will continue to be important.