The impact on tourism business
43. At the same time as the public authorities were
gearing up to respond to the situation, evidence began to emerge
of the full-scale of the burgeoning crisis for tourism in general
and rural tourism in particular. We have received a great deal
of evidence during this inquiry about the scale and nature of
that impact and the human hardship that it has entailed. While
this crisis is continuing, and following this necessarily short
inquiry, it would be neither possible nor appropriate to give
an overall assessment. The impact has been uneven, but some patterns
44. The broad chronology of the impact has been as
follows. Tourism activity in March was sharply down. For example,
total bookings for accommodation in Cumbria were down by 58 per
cent in March 2001 compared with March 2000, with bookings in
the Lake District down by 75 per cent.
There was a revival over Easter in the trade, but this was predominantly
due to short-stay visitors and day visitors, so that the benefits
were far more apparent for visitor attractions than for accommodation
45. The Easter holiday proved a false dawn for many
tourism businesses, with bookings tailing off sharply after the
Easter weekend. The level of forward bookings is still well down
in many cases, so that it is unclear whether anything approaching
a normal summer season will be possible for many accommodation
46. This general pattern disguises profound variations
between different types of tourism. After initial problems, cities,
towns and resorts have fared well, with visitor numbers increasing
in some cases as visitors are displaced from the countryside.
Rural tourism has been far harder hit. To some extent, the level
of impact has reflected the pattern of distribution of foot and
mouth disease, with areas such as Cumbria and Devon worst affected.
However, some of the worst hit areas are those where open spaces
are completely closed to visitorssuch as certain National
Parks and Forestsregardless of whether or not foot and
mouth disease is present in the area. The farm tourism sector
has suffered a devastating blow, being both unable to open for
business and suffering from the direct agricultural consequences
of foot and mouth disease.
47. Statistics from various parts of England give
some illustration of the scale of the impact. In mid-April, the
Cumbria Tourist Board estimated that there had already been 1,000
The Northumbria Tourist Board stated that visits to attractions
in that region were down 71 per cent, with 45 per cent of accommodation
bookings cancelled, and 18 per cent of businesses having laid-off
South West Tourism predicted that that region would lose between
£300 million and £600 million over the year.
48. The effect on individual businesses is extremely
uneven. Some have had to be closed for business due to location
inside or proximity to infected areas. Others have lost almost
all of their tradeas is the case with many outdoor activity
centresand see few signs of that business returning. Many
rural tourist attractions including outdoor activity centres,
museums and wildlife attractions have seen their business further
reduced, or in some cases totally eliminated, because of advice
to educational establishments not to visit the countryside.
Moreover, we were informed that different local education authoritieseven
some adjoining each otherwere offering conflicting advice
to schools. We recommend that the Department for Education
and Employment recommend urgently that all local education authorities
review the advice and instructions they give to schools and ensure
that, whenever possible, visits go ahead.
49. There has been a tendency during discussion of
the economic impact of the outbreak of foot and mouth disease
on tourism to measure it simply in terms of lost income. However,
as we learnt during our visit to the Forest of Dean, tourist businesses
in affected areas have sometimes had to incur additional expenditure
in order to stay open, for example, in order to undertake precautionary
measures. Businesses that invested in promotion and marketing
for the spring season have also found that such expenditure has
been entirely wasted.
50. Although the foot and mouth outbreak has hit
rural tourism hardest and has hit certain rural areas with exceptional
severity, there has been a more general impact on tourism across
the United Kingdom as a result of the reduction in the number
of overseas visitors. The BTA expected that inbound tourism for
2001 would now be 10 to 20 per cent below the Authority's original
forecasts, equating to a drop in revenue of between £1.5
and £2.5 billion.
Overseas visits are concentrated on urban areas and half of all
expenditure by overseas visitors is in London.
Business in hotels and youth hostels in urban areas has been adversely
affected by the reduction in overseas visitors, as have visitor
attractions that rely particularly on overseas visitors.
51. Moreover, there are many overseas visitors to
rural Britain. For example, South West England attracts 2.2 million
trips from overseas in a normal year.
Some rural areas had consciously sought to attract more visitors
from overseas to compensate for the decline in the long-stay holiday
Inbound tourism is often of particular value to rural areas because
overseas visitors offer higher spending levels and year-round
The BTA has been committed to seeking to enhance the number of
visitors from abroad who venture beyond London and obvious tourist
These efforts, and inbound tourism to rural areas, have been particularly
acutely affected by the consequences of the outbreak of foot and
52. Although the impact on the level of visitors
from abroad is less drastic in percentage terms than the impact
on domestic visitors to certain parts of rural Britain, there
are reasons to believe that the overseas market will recover more
slowly than the domestic market taken as a whole. There are already
signs that opportunities for bookings for the main summer season
have been lost.
Based on previous incidents affecting inbound tourism, such as
the Gulf War, the BTA expected negative effects on the level of
overseas visitors to be felt for up to three years.
53. It has not been possible for us within the constraints
of the current inquiry to undertake more than a brief, preliminary
survey of the direct impact on tourism businesses of the current
crisis, but we wish to make three general observations. First,
it is essential to be very cautious of general figures on a national
or regional basis since these disguise many variations between
localities and between different types of business. Second, it
must be borne in mind that figures are more easily provided by
and collected from larger tourism businesses that are anyway best-placed
to ride out the storm, creating a danger that statistics may understate
the extent of hardship amongst very small tourism businesses.
Third, simple examination of levels of business in coming months
may prove to be a very misleading indicator of the financial health
of tourism businesses; much of the trade lost will never be regained
and, in many cases, the delicate balance that enables businesses
that receive most of their income in the summer to survive the
winter will be upset.