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A bright future for Cumbria?

Cumbria is far more dependent on the leisure and hospitality industry than most other parts of the UK: in 2014 the region welcomed over 41.5 million visitors. The economic impact of visitors to the region is vital, bringing in £2.44bn to the region’s economy and supporting an estimated 58,327 jobs, which account for 20 per cent of the county’s total employment.

However, there are challenges. Although the recession proved to be the catalyst for more people staying at home for their holidays, there’s still a squeeze on disposable incomes. Spending on leisure, travel and tourism is unlikely to increase dramatically in real terms, which means greater competition among leisure and hospitality operators. In this edition, in:brief asks the region’s experts what more can be done to ensure one of Cumbria’s important industries remains buoyant.

Celebrating the leisure and hospitality sector

Commentators are optimistic about the current state of health of Cumbria’s leisure and hospitality industry. “In broad terms the industry is in pretty good shape. We came through the recession better than most people thought and have seen three years of steady growth during the recovery period,” said Simon Berry, chairman and managing director of English Lakes Hotels Resorts and Venues.

“Also, the recession gave a number of businesses – ourselves in particular – good reasons to look carefully at what they do and how to improve productivity. As a result, we are significantly more efficient than we were before the recession.”

This mood of enthusiasm is echoed by Bob Bishopp, Head of Cumberland Business, which provides mortgage, savings and banking services to businesses from its Carlisle base.

“Recovery has been rapid compared to that which followed previous recessions. 2014 was a year in which Cumbria’s tourism sector really flourished as confidence returned across the industry and trading performances strengthened. This trend continued into 2015 and currently remains the case.

“The hospitality industry in particular has benefitted from an increased frequency of eating out as the economy improves and more discretionary spend is available. This additional spending power should also allow further increases in travel and leisure expenditure.”

County’s operators must rise to challenges

Nonetheless, the leisure and hospitality sector faces stiff challenges, with operators having to contend with major constraints on their performance.

“Cumbrian businesses are still in recovery mode following a deep recession, and to say this period is over would be slightly premature.” said James Todhunter, Napthens’ Head of Cumbria. “Confidence is one thing, but the foundations of some businesses have been tested severely or they are in the process of rebuilding, so I still see a little way to go before we can push forward fully.

“The great news though is that there is to be huge investment in Cumbria over the coming years, with an estimated £25bn worth of investment in energy, water and manufacturing industries, which presents massive opportunities for all businesses in Cumbria and not just those in the tourism sector. This obviously has additional benefits in that the region doesn’t become reliant on one industry.”

Sharing best practice and working together as operators to promote the broader region, rather than individual attractions is essential to success, according to David Little, chief executive at Lake District Estates.

“Visitors want a joined up experience and therefore it is important that all parts of the visitor experience are as good as they can be,” said David.

Skills shortages and funding issues must be addressed

Recruiting fresh talent is of particular concern to Jason Dearden, managing director at Windermere Marina Village. He believes a skills shortage must be overcome if Cumbria’s tourism industry is to achieve its full potential.

“By far the biggest constraint we face is the availability of a committed and able workforce,” said Jason. “Our business has been lucky in keeping some excellent staff, but schools and colleges must present careers in our industry as a rewarding option if we are to attract the talented young people our sector needs.”

In the business finance arena, increasing pressure on margins due to red tape, along with rising rents on the high streets and in tourist locations are major challenges, according to Bob Bishopp.

“In general there appears to be confidence in the marketplace, although some lenders continue to treat the leisure and hospitality sector with more caution than other sectors,” said Bob. “We believe, however, that a number of lenders, ourselves included, are more prepared to consider well-founded performance forecasts, where they previously focused purely on historic trading figures.”

Transport is vital to bringing in the visitors

Commentators agree that developing an integrated transport network in Cumbria is always going to be difficult as a result of the planning constraints around the Lake District National Park.

“While most operators would like more tourists to visit, we’d also like fewer cars. A lot of international visitors are reliant on public transport once they arrive in the country and many domestic visitors would like to be able to travel around the county on public transport,” explained David Little.

“The problem is that Cumbria is a large rural county, so it can be difficult and expensive to get around using public transport. All too often the transport network is seen to either serve the needs of the visitor or the local. However, an effective network should serve both groups. There has been some success, such as the See More, Drive Less campaign, aimed at getting more people out of their cars and onto public transport, but more needs to be done.”

This line of thought is endorsed by Jason Dearden. “Getting customers here is vital, and the trains are doing a good job, but in most visitors’ minds it is still necessary to bring a car to get about,” he said.

“Buses are still relatively expensive for single journeys and it’s just not yet embedded in enough visitors’ mindsets to use public transport. However, the GoLakes programme is moving boundaries all the time, and the cycle network is now excellent between villages, with much of it off-road.”

The power of technology must be fully exploited

In an increasingly digital world, leisure operators must stay ahead of the technological curve if they are to prosper in the ever-changing e-commerce landscape.

“Real time information is now key. Visitors expect to be able to access information at any time of the day on whatever platform they are using, therefore operators need to ensure their information is up-to-date,” comments David Little.

“The internet can be used to connect tourism businesses with very big underserved markets, such as the ‘grey’ and ‘purple’ pounds. Nearly 12 million disabled people in the UK have an annual disposable income of £80bn in purple pounds. By making simple adaptations, listening to visitors’ feedback, and having a thorough access statement, operators can tap into this very important market.”

Simon Berry believes the most important aspect of the digital revolution is peer review platforms such as Trip Advisor.

“You can go online and find out everything you need to know about an operator within a few minutes. We respond to all reviews, whether positive or negative, because online engagement is crucial in today’s market,” said Simon.

Government intervention divides opinion

The question of whether Cumbria’s tourism sector should be subject to government intervention is complex, with opinion varying on what types of activity constitute ‘intervention’.

“I totally support the devolution of powers from central government and the creation of a Northern Powerhouse,” said James Todhunter. “While many will say that this simply benefits the main northern cities of Manchester and Liverpool, there will continue to be massive investment from both public and private sectors in the North West on the back of this. It is then down to local authorities to fully buy into this and make the most of what may be a generational opportunity.”

Jason Dearden is not a supporter of direct intervention, but very much in favour of investment. “The tourism sector just isn’t sufficiently recognised as the largest employer in Cumbria. The industry is worth well in excess of £1.2bn, yet the county’s budget for tourism development is negligible, and our local councils’ budgets are laughable,” said Jason.

The outlook is positive provided challenges are met

What, then, does the future look like for Cumbria’s tourism industry and its wider economy? James Todhunter is among the optimists.

“As we have continued to recover from recession and confidence returns to discretionary spend, Cumbria will continue to enjoy success,” said James. “Pleasingly, the product is good, which means we can be positive, while being clear that there are still big improvements to be made – especially in transport links – to make the whole county accessible not just for visitors but to create the right environment for a wide range of business to stimulate wealth and job creation.

“With the investment planned across many sectors, I can see a bright future for Cumbria.”

 

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