Inside track by Mark Wingett
There are a number of thoughts that can cross your mind when stuck bumper to bumper behind several caravans on an A-road on a typical inclement UK bank holiday Monday. Most, unsurprisingly, are unprintable.
But before I come across all Jeremy Clarkson, there was one thought that harked back to last month’s Budget. It was something that got lost amongst the “pasty tax” debates but was also part of Chancellor George Osborne’s drive to close loopholes and remove anomalies from the way VAT is applied.
From 1 October, VAT at 20% will be added to the sale of static holiday caravans to bring them into line with their “mobile” counterparts. It has been dubbed the “holiday tax” by leisure park firms, who, not surprisingly, say that it could cripple the tourism industry across the UK.
Nigel Wimpenny, managing director of South Lakeland Parks, which operates nine parks throughout the Lake District and Lancashire, said: “At a time when we should be doing all we can to encourage more people to holiday at home and buy British, the reality is quite the opposite.
“This will not only impact on the tourism spend in areas like the Lake District, it will bring the British manufacturers of holiday homes to their knees. It will lead to job losses in the industry and in those businesses that are indirectly supported by tourism spend such as cafes, pubs and restaurants, visitor attractions and shops.”
However, their fears come at a time when domestic tourism is seemingly in good health. Driven by the squeeze on household incomes domestic tourism visits in England increased 9% in 2011, according to new figures from tourism agency VisitEngland, suggesting that the “staycation” trend is continuing in this country.
Domestic tourism in Britain is worth £54bn to the UK economy, with eating and drinking out the second most popular reason for day trips. That’s according to a survey of 38,000 people in 2011, which found that British residents took 1.5bn tourism day trips in the UK that year. In England alone, 1.3bn trips were taken, with £44bn spent.
On average, day visitors in England spend £34 per trip, the survey found. However, this varies according to the type of activity. Those taking a ‘special shopping’ trip spend on average £113 per trip, whilst at the other end of the scale, those people visiting friends and family spend just £18 on average.
So where is this £34 being spent? Visiting friends and family (350m trips) was given as the most popular reason for day trips, followed by going out for meals and drinks (250m). While some is obviously being invested on matching the increasing fuel prices, a good proportion is being spent in pubs, restaurants and cafés close to tourist hotspots.
Seasonality plays a major role in many of these businesses survival, with a good number closing or operating limited opening hours during the winter. The majority, in line with many of the national operators, also pin some of their yearly forecasts on bank holidays, banking (excuse the pun) on trading peaks to underpin or make up trading shortfalls elsewhere.
Over this bank holiday weekend, the Centre for Economics and Business Research (CEBR) said that if bank holidays were scrapped, Britain's GDP would be £19bn higher every year. The think-tank said that the UK depends far more on services than other countries and that sector - with the exception of the hospitality industry - tends to work far less on public holidays.
CEBR founder Douglas McWilliams said: “About 45% of the economy suffers; the offices, the factories, the building sites where people tend not to go to work on bank holiday.”
McWilliams said that 15% of the British economy “do well” during bank holidays, these businesses were shops, pubs, restaurants and visitor attractions.
While scrapping bank holidays would undoubtedly cause a revolution, McWilliams’ other idea, spreading out bank holidays across the year definitely has some merit.
Mervyn King, the Governor of the Bank of England, for one might be a fan of the idea after warning that GDP in the second quarter of this year might shrink owing to the number of bank holidays clumped together in the period.
Momentum built up by operators around bank holidays could also be maintained during the year rather than lost when there are too many close together. There is also a feelgood factor that comes into play, with people arguably likely to enjoy bank holidays that are spread out more, be able to budget for them better and therefore increase their spend across each break.
That’s if they can get to their destination first!
