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Sun, Sea & SMEs - the challenges of the tourism industry

The tourism industry is a vital part of the UK’s economy, and one that revolves around small businesses. But it’s also a sector that faces its share of challenges, as David Adams discovers.

Tourism in the UK is one of the nation’s great success stories. It is a dynamic and diverse industry, which accounts for 9.6 per cent of UK jobs and around 9 per cent of UK GDP, according to figures from Deloitte. Furthermore, it is set to expand significantly over the next decade. The sector as a whole is predicted to more than double in worth from £126.9 billion in 2013 to £257.4 billion by 2025, creating more than 630,000 extra jobs. 

And tourism depends above all on small businesses. For example, says Ross Calladine, Head of Business Support at VisitEngland, 95 per cent of all accommodation providers in the UK have fewer than 50 employees, while 82 per cent have fewer than 10. 

Many of these businesses are hugely important to local economies. Adventure experience provider TYF was set up in Pembrokeshire in south-west Wales, 30 years ago. It pioneered ‘coasteering’ – a physical journey alongside and into the sea, leaping off cliffs into the water and scrambling through rocky coves – but also offers other activities such as kayaking, surfing and climbing. 

Founding Director Andy Middleton says that companies such as his can stimulate development of similar or complementary businesses, while providing employment and inspiration. “Almost every person round here has worked for us or with us at some stage, and many have then founded their own businesses,” he says. 

Rural issues

Many small businesses working in tourism are based in rural or coastal areas, so are subject to the same challenges facing all business operating in those areas, such as poor transport or communications infrastructure. Both subjects are key campaign issues for FSB. “The perception and the reality is that rural transport is poor, especially if you don’t have a car,” says David Webb, Rural Affairs and Tourism Policy Chairman at FSB. 

This problem particularly affects young people, says Susan Briggs, Director of marketing service provider The Tourism Network, which serves small firms in Yorkshire, and is itself a small business. “Often, poor rural transport prevents businesses from developing because they cannot get the employees they need, who may be young people who don’t drive,” she says. 

Another contentious issue for tourism businesses, and another focus for FSB, is broadband access. Jane Pond is owner of East View Farm Holiday Cottages, two holiday homes in Ashmanhaugh, Norfolk. She now has download speeds of 2.5Mbps – far faster than before but much slower than she would have in many urban areas – while her upload speed of 0.35Mbps causes difficulties when uploading photographs to her website or emailing advertising content. “It takes forever to upload just one photo,” she says. “Also, the poor mobile service annoys visitors.”

Yet another problem cited by some business owners is that although local government provides access to training courses and funding that could help them develop their businesses, these can be poorly targeted. “Small businesses are offered lots of training courses, but what they really want is one-to-one help,” says Ms Briggs. “They don’t want a course on how to build a website; they want the person who says ‘your website is rubbish and here’s why’.”

Other problems are more specific to the type of company. Ms Pond would like reform of the taxation system for accommodation providers. At present, people such as her, who run their businesses full-time, are treated in the same way as second-home owners who rent their homes out for a few weeks each year. “The Government doesn’t see self-catering as a business – they see it as an investment,” she says. 

Joining forces

But businesses can do a huge amount to combat these problems by working more closely with other local firms. Carolyn Frank, owner of Libby Butler Jewellers in Helmsley, North Yorkshire, was a founder member in 2012 of Helmsley in Business, which now has 56 members. 

Helmsley is a tourist town, with a small population of about 1,400 but many independent shops and other businesses serving tourists and locals. “We’ve done events, joint marketing, brochures and a website,” she says. “We’re primarily retailers, but it also helps the visitor attractions here: the castle, the birds-of-prey centre and so on. To make that difference in the local economy, you need to work together.” 

In December, Helmsley won the award for ‘best market town high street’ at the Great British High Street Awards. More tangibly, there has been an 11 per cent increase in footfall in the long-stay car parks in the town. “So more people are coming, they’re staying longer and we hope they’re spending more,” says Ms Frank. That, ultimately, is good news for customers, local communities and, of course, the small businesses on which the sector depends.

Case study

Zip World

Zip-World-Velocity

Zip World is one of the fastest growing businesses in the tourism sector. Based in a former slate quarry in Snowdonia, North Wales, it boasts the fastest zip line (pictured, above) in the world, as well as an underground adventure course and trampoline experience (below right).

Bounce-Below-Oli-Scarff

In 2013, when the firm was founded by Sean Taylor, it had five employees. By the end of this summer it will have 100 full-time staff. It is also set to buy Tree Top Adventure, another local business – also owned by Mr Taylor – after which it will employ around 300.

Planning permission has been granted for a new £2.5 million headquarters, while the company is seeking to add to the numbers of wires it operates. It also plans to open new sites soon. 
Despite delays caused by a few complaints about the noise of the zipwires, Mr Taylor praises local politicians and the Snowdonia National Park organisation and VisitWales for their support. 
As with many other business owners in this sector, Mr Taylor would like to see a cut in VAT, which he believes puts firms such as his at a disadvantage compared with similar attractions in other European countries where taxes are much lower.

Case study

Craggan Outdoors

Keith Ballam is Managing Director at Craggan Outdoors, an adventure centre near Grantown-on-Spey in the Cairngorm Mountains, Scotland. He and his wife Jill bought the business in 2008 and moved to the Highlands from Sussex. 

Turnover has tripled in seven years. The business now has four full-time employees, plus additional staff employed for each peak season – April to October. When the Ballams took over, visitors could choose between 14 activities. Now there are 24, including golf, fishing, archery, climbing, kayaking, laser or clay pigeon shooting, quad biking and gorge walking (pictured). Some activities are offered through commercial partnerships with other local companies.

Gorge-walk

Mr Ballam would like to see local roads upgraded, believing that imperfect transport infrastructure may put off some visitors. “Having come from the south-east of England, people there think nothing of driving to the south of France,” he says. “Many of them don’t realise that it’s less of a grind to get here.”

Case study

The Big Sheep

Sheep-Racing-at-The-BIG-Sheep

Rick Turner is ‘Director of the Flock’ at The Big Sheep (pictured, above and below), near Bideford in north Devon: a theme park and entertainment venue that has become a much-loved institution and valuable local employer. 

The Big Sheep and its sister attraction, the smaller Atlantis Adventure Park in Bideford, employ around 40 people throughout the year and a further 60 during the summer.

The company’s search for continuous improvement is sometimes threatened by factors such as the poor broadband and mobile phone reception in the area. “Not being able to get decent internet access is frustrating,” says Mr Turner. “It also means our customers are unhappy, because they can’t use the services they want on site.”

Ewetopia-slide

He also bemoans tighter rules on when parents can remove primary school children from school to go on holiday. He believes the policy is a big reason for many attractions and accommodation providers raising prices during school holidays, because it reduces demand for their services at other times. “We’ll get to the point where people just can’t afford to go on holiday,” he warns.

Further information

A wealth of information to help tourism business owners is available from the regional government bodies supporting the industry: VisitEngland, VisitWales, VisitScotland and Tourism Northern Ireland. 
Their websites all include information about topics including marketing, legal matters, quality assessment schemes, funding opportunities, accessibility for the disabled, sustainability and crisis management. “The work we do is all about being able to give small businesses support on the ground, to talk about problem areas and to share good practices,” says Ross Calladine, Head of Business Support at VisitEngland.

VisitEngland business advice hub: visitengland.com/biz/advice-and-support/businesses
VisitScotland business support: visitscotland.org/business_support.aspx 
VisitWales tourism industry information: gov.wales/topics/tourism
Tourism Northern Ireland: tourismni.com/BusinessSupport
FSB: fsb.org.uk offers a huge range of information to support small businesses of all kinds