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Analysis: regional tourism survey points to wages boost

PUBLISHED: 17:43 02 April 2014 | UPDATED: 16:36 04 April 2014

Warm sunshine and very mild breeze makes the Spring weather ideal for a stroll along the promenade at Southwold.

Picture: James Bass

Warm sunshine and very mild breeze makes the Spring weather ideal for a stroll along the promenade at Southwold. Picture: James Bass

(C) Archant Norfolk 2014

With Larking Gowen launching its Tourism Survey this week, business writer Ben Woods takes a closer look at what the results might mean for the region.

• POSITIVITY: The tourism sector’s resilience amid two years of challenging weather is something to be admired. But while the patchy sunshine has made times tough, it has not stopped a swell of positive feeling about this year’s summer season. According to the Larking Gowen Tourism Survey, 68pc expect turnover to rise this year, compared to 57pc last year, while 61pc are expecting a boost to profits.

If the weather is anything to go by, then these business leaders have a right to feel good. A report by scientists in Germany (published by the ‘PNAS’ journal) has predicted temperatures to be driven up by an El Niño pattern, which occurs when waters on the Pacific equator are unusually warm.

If the predictions are correct, then a bumper year for the region’s tourism trade may ensue. But the likelihood of this happening has already been shrouded in scepticism by leading climatologists.

• ONLINE BOOKINGS: The battle for holiday bookings has been won and lost on the web in recent years. So it is alarming to see that 41pc of firms still offer no service for buying online. If the region is to compete nationally, more must be done to encourage businesses to invest in their online strategy. Evidence shows that late bookings rose by 77pc last year – most would have been done digitally.

• POLITICS: The chancellor’s budgets have left the tourism sector wanting. This could go some way to explain the strong sense of disillusionment with the powers above: 78pc believing the government is not doing enough to help tourism. The sector is desperate for a reduction in VAT to encourage holidaymakers to spend more, with 33pc worrying that lower VAT rates in Europe could harm business in the future.

But despite the chancellor stubbornly refusing to change his position on VAT, 27pc still believe that the Conservatives are the most supportive to the tourism industry, compared to Labour at 3pc

• PAY: The debate over the country’s ‘cost of living crisis’ is likely to dominate the political landscape on the run up to the next election.

And the Conservatives had some relief in recent weeks when figures showed that earnings were starting to pick up.

Signs that workers could take home more in the next few years has also been reflected within the Larking Gowen Tourism Survey. 57pc firms claim to be considering increasing staff pay this year compared to 38pc the year before, while 43pc said pay will stay the same compared to 61pc in 2013.

Decisions to up wages are a clear indicator that confidence is increasing in parts of the region’s tourism sector.

But one should remain cautious about using pay increases as a barometer for measuring the health of the local economy.

The strengthening UK economy maybe giving tourism businesses more wriggle room to improve pay, but the rise would have to be significant to make a meaningful difference. The latest figures show that earnings grew by an average of 1.4 per cent over the past year, according to the Office for National Statistics - lagging behind inflation of 1.9 per cent.

Some firms could be pinning their wage increase on the back of a strong summer performance, with initial reports suggesting that Britain should brace itself for its hottest summer on record.

A damp squib in July, August and September, could see the purse strings tighten again, delaying a pay increase for another year.

• The Larking Gowen Tourism Survey, sponsored by the Eastern Daily Press, is culmination of four months worth of research, with 330 business leaders taking time to fill in the questionnaire.

• To see the survey in graphics, click on the link above.

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