Nearly £5 million of grants has been awarded to tourism and hospitality businesses in Coventry and Warwickshire in the last nine months to help provide support from the ‘perfect storm’ affecting companies in the current economic climate.
Tourism and hospitality is the focus of the latest Coventry and Warwickshire Local Enterprise Partnership (CWLEP) Growth Hub SmartRegion report which gathers information from its business engagements as well as statistics and data from Warwickshire County Council, Coventry City Council, the CWLEP and other organisations.
Coventry and Warwickshire’s business support organisations have provided a wide range of financial support including almost £1.5 million from Warwickshire County Council’s Adapt and Diversify scheme, almost £200,000 was allocated quickly to businesses in the visitor economy from the European Regional Development Fund Specialist Grants awarded through the CWLEP Growth Hub with Coventry City Council acting as the accountable body, and more than £3 million was lent to businesses in the sector by the Coventry and Warwickshire Reinvestment Trust.
The Government has launched the Tourism Recovery Plan to encourage greener, innovative, and more resilient hospitality and tourism businesses with a range of measures including reducing VAT, business rates relief, introducing a spending voucher scheme, and domestic tourism rail products to increase demand.
Helen Peters, chief executive of Shakespeare’s England, the destination management organisation for South Warwickshire and the surrounding areas, said businesses in the tourism and hospitality industry had reopened later than any other sector and had operated under restricted capacity for many months despite facing ongoing fixed costs, persistent low revenues, dwindling cash reserves and the potential closure of businesses.
She said: “The hospitality industry was the first to be forced to close and has been the last to re-open.
“Even now there are mixed messages regarding “Freedom Day” as case numbers have risen recently, and businesses are very aware that to re-grow confidence in both staff and customers, they potentially need to keep many of the mitigations in place like social distancing and the wearing of face masks and coverings.
“International visitors had represented roughly 30 per cent of our visitor base.
"We are unlikely to see many international visitors back until 2022, but VisitBritain anticipate it being 2024 before we realistically return to pre-pandemic levels.
“Increases in domestic visits via ‘staycations’ and ‘daycations’ will help, but international visitors on average spend three times that of a domestic visitor, so the negative economic impact will still be significant.
“Tourism and hospitality is a sector that is so often overlooked but is a huge contributor to UK GDP.
“Looking forward, I think there needs to be proper long-term funding for the visitor economy with all local authorities providing a percentage of grant funding for their destination management organisation, proportionate to the economic impact tourism drives to their area.
“I think having a designated Secretary of State for Tourism, Hospitality, Culture – The Visitor Economy would also be helpful because it is currently covered by the Department for Culture, Media and Sport, the Department for Business, Energy and Industrial Strategy, and the Department of Transport, which often leads to a lack of clarity and no coherent overarching strategy for our sector.
“Finally, our sector should be seen as an ‘aspirational career choice’ recognised by the red-brick universities and industry alike to highlight senior management roles.”
Craig Humphrey, managing director of the CWLEP Growth Hub, said the monthly SmartRegion report was also monitoring a range of issues which are merging into a perfect storm, threatening the reset and recovery of the region’s economy during the remainder of 2021.
He said: “The Growth Hub is continuing to gather evidence to gain more intelligence, experiences, and insights from local businesses to report back to the Government since it is clear that these issues are not just happening in Coventry and Warwickshire although the degree of the impact varies between different areas.
“Problems range from supply chain difficulties which is leading to significant price increases or stopping production to the well documented shortage of skilled and semi-skilled labour, and from the phasing out of Government support to self-isolation rules and the ‘pingdemic’.
“All of this is contributing to re-opening plans being disrupted for many businesses of all sizes, with some having to reduce hours or services and some being forced to close.”