The South West’s tourism and hospitality industry could take years to fully recover from £800million of economic damage wreaked by the coronavirus pandemic, it has been claimed.
Key figures from businesses and organisations in the region said the visitor sector appears to have bounced back well following the easing of restrictions on July 4.
But they said businesses will need to make as much income as possible in the next few months in order to survive the following winter.
And there are concerns that it could take years for the sector to return to full health after losing more than three months of vital revenue during the lockdown.
In a special business roundtable event, hosted by business bank NatWest, leading figures from the region’s industry revealed the impact of the lockdown and what it will mean for the future.
The businesses were grateful for the Government’s, and the banks’, swift response and measures such as the Job Retention Scheme, the Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS), which were credited as key to surviving the lockdown.
But they would like the British Business Bank to consider shifting the start date for loan repayments by six months, to September 2021, to give the industry an opportunity to earn through the summer.
And they are hopeful that measures such as August’s Eat Out to Help Out initiative may encourage more people into pubs, bars and restaurants.
Most Read
But despite this the industry is in deficit this year and Malcolm Bell, chief executive of Visit Cornwall, said it had lost about £700million of turnover, due to reduced capacity, and another £100million due to lost secondary spend.
He said: “That £800million is 40% of turnover for the year. Most businesses profits will be down.”
He said the region’s hospitality industry had a slow start after lockdown was released, but it quickly “ramped up” and will soon be 80% of normal volume.
But businesses, particularly attractions, may be looking to close early in September or October. And Mr Bell said it would help businesses if their initial CBILS and BBLS repayments could be pushed back to September 2021, rather than the due date in March 2021.
He said the industry may have to look at a series of festivals or “themed days” to aid its recovery.
John Sheaves, chief executive of Taste of the West Ltd, said the past three months have been “emotionally traumatic” but businesses had survived thanks to Government and banking support.
“The next nine months is the critical period,” he said. We are looking at Easter 2021 before the industry will be able to recover in any sense.”
Don’t miss
Taste of the West has 1,000 members, of which half are food producers, a sector which has had a “torrid time”, particularly for small and mid-sized enterprises, Mr Sheaves said.
He said one small ice cream making firm had told him it will take six years to recover the losses from the past four months.
He said it is leaving firms with the stark choice of borrowing more money or “getting out now”. But the more positive aspect is it has encouraged businesses to be more innovative.
Piers Thompson, external relations director at St Austell Brewery, revealed the company’s two breweries, 180 pubs, and large wholesale business resulted in a usual turnover of £190million.
But with hospitality businesses closed, even though take home trade remained, the business began “haemorrhaging money” during the lockdown.
“It will take three years to recover from this,” he said. “We will be looking at making half our usual turnover this year. So we are forecasting to lose a lot of money.”
But the firm has made a rapid early recovery, with sales at 60% of the level of those a year ago, and an increase in people wanting to stay at the pubs, but food sales are not going so well.
“But we are optimistic things will get better,” he said.
Allen Jackson, owner of the Jamaica Inn, on Bodmin Moor, said the 36-bedroom business had turned over £3.37millon in the year to February 2020, but the following month income fell to zero as it entered lockdown.
It reopened on July 4 with a 60% occupancy rate quickly raising to 89%, and is now looking to recruit another six people, after bringing other staff back from furlough.
“It’s picking up well,” Mr Jackson said.
How to contact William Telford and Business Live
Business Live's South West Business Reporter is William Telford. William has more than a decade's experience reporting on the business scene in Plymouth and the South West. He is based in Plymouth but covers the entire region.
To contact William: Email: william.telford@reachplc.com - Phone: 01752 293116 - Mob: 07584 594052 - Twitter: - LinkedIn: - Facebook:
Stay in touch: BusinessLive newsletters have been re-designed to make them even better. We send morning bulletins straight to your inbox on the latest news, views and opinion in the South West. Get our breaking news alerts and weekly sector reviews too. Sign up now - it's free and it only takes a minute. To sign up for Business Live's daily newsletters click .
And visit the Business Live South West LinkedIn page
Gary Cook, regional general manager of Hoburne, which has eight holiday parks including Paignton’s Hoburne Devon Bay, said the business had been through a “challenging time” but had also rebounded well since reopening.
But he is worried about what happens after October and November and still thinks there is a need to rebuild confidence among the public, because holiday parks are busy but the amenities are not.
“We need consumer confidence back to get the money coming through the tills,” he said. “This will impact on how we invest in the park over the next 18 months to two years. But the next few months are critical for building consumer confidence.”
Phil Osborne, director of Polmanter Touring Park, in St Ives, said staff were furloughed and most customers were happy to defer bookings, when lockdown was ordered.
But since the business reopened “bookings went crazy”, with new customers joining the regulars.
“As long as we can get July to September we will have 75% of our income this year,” Mr Osborne said. “But we won’t make any profit this year.”
Chris Preston, NatWest’s regional managing director of business banking, said: “The next three to six months will be critical in terms of rebuilding cash flow. Hard decisions will be made as we exit the summer.”
He stressed the bank had been proactive during the pandemic lockdown and had spoken to all business customers and will be checking on them as they enter the recovery phase, with particular emphasis on the move towards cashless payment systems and how and when loan repayments are made.
He said the bank would talk to the Treasury about businesses’ desire for CBILS and BBLS repayments to be deferred by six months.
Nathan Waller, NatWest director of commercial banking for Plymouth and Cornwall, reaffirmed that that bank would do its utmost to protect businesses as they recover and said: “It’s going to take some time to get back to the levels we have seen pre-crisis.”
But he stressed: “So it’s how can we soften the bank’s repayment terms and help businesses survive.”