Half of tourism businesses in East Anglia see profits fall, says survey

Half of tourism businesses in East Anglia see profits fall, says survey

Customers are spending less and expecting more for their money, with 50% of tourism businesses in the eastern region reporting a fall in profits, according to a survey commissioned by accountancy and business advisory firm, Larking Gowen.

The results of the Larking Gowen Tourism Business Survey 2024 were revealed at a press conference held at Jimmy’s Farm, near Ipswich, on Tuesday 21 May, and showed mixed reviews about the future of the industry among business owners.

Chris Scargill, Partner and head of the Tourism, Leisure and Hospitality Team at Larking Gowen, said: “Following a long run of challenges and customers struggling with the rising cost of living, the tourism sector in the eastern region is understandably feeling fatigued.”

The survey, which incorporated feedback from all business types in the tourism, leisure and hospitality sector, looked at customer behaviour, turnover and profit, investments plans, and business owners’ views on the future of the industry.

The survey revealed 83% of respondents reporting a change in spending habits among customers, which had a moderate or significant impact on their business, leading to 50% of businesses seeing a fall in profits in 2023. One-in-three businesses were anticipating falling profits in 2024. This resulted in 32% saying they planned to cut jobs, 10% said business activity may need to be reduced, and 10% said their businesses may have to close.

But there was also a degree of optimism, with 59% of respondents saying they had plans for site improvements and refurbishments, 11% were extending premises, one-in-three were looking to improve customer and employee experiences, and 36% were going to increase investment in marketing and PR.

When asked about confidence in the local tourism economy last year, 55% of businesses gave a strong score of seven or eight out of 10. That confidence has now dropped with only 24% scoring a seven or eight in the 2024 survey.

In the survey, only 9% of respondents felt that central government provided enough support for the sector. Local support was also found wanting, with only 19% suggesting enough support was being given.

Chris Scargill said: “These are challenging times for the sector. As the world changes, so do the needs and habits of customers. People are fussier and their cash is hard-earned. More people are looking for authenticity, sustainability and making fun memories, so their holiday time has to provide a return on their investment.”

He said there was a growing feeling in the industry that collaboration between businesses was important, especially in economically troubled times.

“My belief remains that together you are stronger. The destination marketing organisations are helping highlight the wealth and eclectic mix of good things the area has to offer, and businesses working together to create campaigns will add value outside the reach of any one business.”

He said it was important for businesses to realise that they were not alone in facing current challenges. “I hope people who work in this important sector will see positivity in the data and that you’ll grow your business and continue to provide the experiences that customers are looking for in this new era.”

Business leaders attended an industry lunch and seminar held at ROARR! in Lenwade, Norfolk on Wednesday 22nd May to discuss the results of the survey and future issues within the sector.