KCC Scrutiny Committee into the impact of Covid-19 on the Visitor Economy Visit written evidence

Visit Kent is the official Destination Management Organisation for Kent and , responsible for championing the county’s visitor economy which is worth nearly £4 billion and supports more than 77,000 jobs. We are recognised as one of the country’s leading DMOs, targeting UK and overseas markets to raise Kent’s profile as a premier destination, improving quality and skills within the industry, and growing investment in tourism.

We operate a not-for-profit model with a mix of funding from the public and private sector bringing together an engaged network of partners including attractions, accommodation, food and drink businesses, transport, retail, local authorities, cultural organisations, universities and a range of other stakeholders that make up our visitor economy. In addition to this, Visit Kent has been successful in accessing national and European funding to leverage further investment and support for the sector in Kent. Our consultancy arm, Go To Places, also allows the Visit Kent team to deliver services such as research and placemaking to partners within, outside, and in partnership with Kent.

Throughout the Covid-19 crisis, despite having reduced capacity, Visit Kent has delivered a large amount of sector specific support and representation at a national level (see attached Visit Kent Covid-19 response activity report). As part of this activity we have continually tracked the impact on businesses and fed issues back to government through our place on the Tourism Industry Emergency Response group. Responses to our Covid-19 business impact survey and the series of webinars and round tables we have delivered throughout the pandemic have informed our response to the questions below.

1. Please provide any background information or figures you have in relation to the visitor economy (in Kent and/or nationally)

The visitor economy prior to Covid-19

• Before the COVID19 pandemic, Kent attracted 65million visitors a year, contributing £3.8billion to the county’s economy and supporting more than 77,000 jobs. This is equivalent to 11% of all employment in the county. (2017, Kent Economic Impact of Tourism). • Kent had 5,345 tourism enterprises as of 2019. This grew by 14.6% over the last five years. Seven Kent districts have a higher proportion of tourism enterprises than the national average of 8.5%, with the highest in coastal areas. (Tourism industries in Kent, March 2020) • Nationally, the sector is worth £127bn to the economy annually, is the third largest service export and supports around 3 million jobs. VisitBritain had been forecasting inbound tourism to grow by 2.9% to 39.7m visits and for spending to grow by 6.6% to £26.6bn, setting new records in each case. (Helping the tourism industry recover covid-19, VisitBritain) • Kent is the 3rd most visited destination for international visitors outside London reaching a record 1.1 million in 2017 and were worth £361 million to the local economy. (2017, Kent Economic Impact of Tourism). • The Port of is Europe’s busiest international ferry port welcoming 11,723,411 passengers, 2,180,611 tourist cars and 79,638 coaches in 2019. For Kent (Ferry and Eurotunnel) combined cross-channel passengers in 2018 were 22,024,033 Passengers, 4,775,858 tourist cars and 130,867 Coaches. • The Port of Dover is also ’s second busiest cruise port, attracting 130 ships in 2019 and over 200,000 passengers annually. • A report commissioned by HS1 in 2017 showed that 890,000 leisure visitors travelled to Kent on high speed services in 2016 accounting for 47% of all visitors to Kent who travelled by rail (The impact of HS1 on the visitor economy in Kent, 2017)

Impact of ongoing Covid-19 crisis

• Visit Kent monthly Business Barometer showed that Kent began to see cancellations as a result of Covid-19 in February with 50% of businesses experiencing cancellations mostly from international visitors but also some domestic groups. (Visit Kent Business Barometer, February 2020) • Major events planned for 2020 were cancelled or postponed including the 149th Open, Dickens 150 events, Becket 2020 events, The Lambeth Conference and Triennial. • On average businesses experienced a loss of -73% in March in terms of footfall compared to March 2019 and a -72% reduction in revenue. This impact worsened into April as the lockdown progressed, with a -98% loss in both footfall and revenue compared to April 2019. Findings also showed that businesses have been most affected by general footfall loss, cash flow and loss of domestic group visits. (Visit Kent, Covid-19 business Impact Survey, May 2020) • 68% of businesses stated they had experienced challenges when applying for a financial support scheme. In the case of accommodation providers, this increased to 46%. (Visit Kent, Covid-19 business Impact Survey, May 2020) • 98% of businesses surveyed indicated they had furloughed staff with most indicating that this accounted for the majority of their employees. (Visit Kent, Covid-19 business Impact Survey, May 2020) • 89% of Kent businesses in the tourism and hospitality sector closed, either temporarily or indefinitely - more than any other sector. Across all sectors this figure was 74%. 28.3% of all furloughed jobs reported in the survey were from the tourism and hospitality sector which was only slightly behind retail at 31.2%. In addition to this tourism and hospitality businesses reported the most redundancies representing 32.6% of all reported job losses. (Kent and Medway Growth Hub Business Impact Summary Report, 6th July) • ONS data from 5th July showed footfall in high streets was below 40% of its level in the same period last year, while footfall in shopping centres was just under 50%. 36% of food and accommodation businesses and 40% of entertainment and recreation businesses said that all capital expenditure has stopped. • ONS data on business impact from 2nd July showed: o The arts, entertainment and recreation sector, and the accommodation and food services activities sector reported by far the largest percentage of businesses that had paused trading and were not intending to restart in the next two weeks - 50% and 43% respectively. o The percentage of people on furlough in tourism and hospitality has fallen to just below 70% (was 80%) but this is still much higher than businesses as a whole (23%). o 96% of accommodation and food service businesses have applied for CJRS support. o 10% of accommodation and food service businesses have no reserves and a further 57% have less than 6 months reserves – the worse of all industries for resilience. • High profile redundancies have already been announced at Dreamland, DFDS, Holiday Extras and P&O Ferries. • Weekly consumer sentiment trackers conducted by VisitBritain and BVA-BDRC continue to show a low propensity to take a trip and confidence to return to leisure activities, especially for indoor attractions.

Impact forecasts

• The latest VisitBritain domestic forecast data estimates a decline of 48% in domestic spending in England, or a loss of £36.8bn (from £75.9bn in 2019 to £39.2bn in 2020) (Covid domestic tourism impact forecast, VisitBritain) • As of June 3rd VisitBritain forecast inbound tourism for 2020 to decline by 59% in visits to 16.8m and 63% in spend to £10.6bn. This would represent a loss vs the pre-COVID forecast of 25.3m visits and £19.7bn spend. (Covid inbound tourism impact forecast, VisitBritain) • A forecast by STR on hotel demand estimates that in the short-term (the next 6-12 months) hotel demand is projected to recover to around 60-80% of 2019 levels but room rates are expected to remain well below 2019 levels. Demand isn’t expected to recover to 2019 levels until 2023 followed by achieved room rates in 2024. (COVID-19: From survival to recovery, Hotel Solutions) • Oxford Economics forecast it will not be until 2023/24 that inbound tourist volumes will recover to their pre-Covid-19 level. (Helping the tourism industry recover covid-19, VisitBritain)

2. In your view, what are the main issues with regard to the impact of Covid-19 on the visitor economy in Kent? (Please provide any figures you have to evidence this)

Now that many tourism and hospitality businesses have partially or fully reopened, the biggest challenge will be how to rebuild consumer confidence and increase demand. Of course, many businesses in the sector are still unable to open or can’t open in a financially viable way so providing targeted support ensure businesses are able to survive to next spring will be critical.

Confidence and perception

• Weekly consumer sentiment trackers are showing that consumer confidence continues to be low with just 11% currently expecting ‘normality’ by September and 26% by December and people are very cautious to return to leisure activities. National initiatives such as the Eat Out to Help Out scheme, Good to Go industry standard, Know Before You Go and Enjoy Summer Safely messaging will hopefully start to encourage domestic visitors to return and the Visit Kent’s Secret Garden of England campaign (part funded by KCC) will help to position Kent as a safe and appealing destination however, a persistent approach will be needed to ensure a strong recovery while competing with other destinations for domestic visitors. • Financial confidence to spend on leisure activities will also decline as the country moves into recession. This will mean the average spend per person is likely to decrease and subsequently their impact on the local economy. We’re also likely to see a decrease in business visitors and corporate events as businesses tighten the purse strings and move to virtual meetings. • International perceptions have been damaged as a result of the UK being one of the hardest hit countries by the pandemic. Targeted activity will be needed to rebuild demand from key European and long-haul markets. • Public health messages to only use public transport has damaged confidence to use the bus and train. The Visit Britain consumer tracker is showing that only 9% of people who intend to take a leisure trip this summer would travel by train. Eurotunnel and ferry travel will be seen as a safer option to travel from/to near-European destinations so may present a small opportunity for Kent.

Getting through the winter

The visitor economy is heavily seasonal with 70 per cent of business activity in tourism happening between April and October. This means that much of the revenue that would be generated through the peak season has been lost. Business rates relief, tourism and hospitality grants and the CJRS have been a lifeline for businesses and the temporary VAT cut has been very well received by the industry however, businesses are still low on cash reserves and there is a high risk that many businesses may not survive the winter.

• The additional costs related to implementing guidance, purchasing PPE or changing business models have been high. This investment has been required at a time when cash reserves are extremely low and potential revenue has been reduced by social distancing and reduced demand. • Businesses with high rent and other overheads are likely to be more at risk, especially as many of these businesses also missed out on the grants because they have a rateable value of over £51,000. • A potential second wave or local lockdown occurring after having invested so much into the initial reopening is a huge risk to the sector.

Businesses that have not yet reopened

While the sector is largely perceived as being open as of 4th July, many businesses have still been unable to reopen due to social distancing making their business financially unviable or being able to implement them safely, not yet having permission to reopen or relying on markets that have not returned yet. Businesses that fall into these categories require further targeted support.

• From 1 August wedding receptions will be able to take place, but will be restricted to 30 people only. The guidance for business events and conferences has also changed with venues being permitted to host such activities from October as long as they can do so in a Covid-secure manner. These changes, although welcome, still represent a significant restriction on normal activity with a consequential drop in much needed revenue for many of our businesses. • Although some outdoor performances have been allowed to resume, almost all events have been cancelled for this year. Many businesses generate a large portion of their revenue from their events programme as well as supporting a wider supply chain involved in delivering events. • While there is roadmap to how culture can return safely as well as unprecedented funding announced, we need to ensure this reaches the right organisations in Kent. Kent’s cultural assets are key to the visitor offer and while theatres and other cultural venues remain closed, this will have an impact the wider visitor economy. • International visitors will be slow to return. Businesses that rely heavily on visitors from overseas will be most heavily impacted. They also stay longer and spend more so any reduction will have a larger impact on the value of the visitor economy. • The cruise industry still has no guidance or date to restart. FCO guidance was changed last week to advise against going on a cruise. There is currently no review date for this guidance which is having a devastating impact on bookings. Many businesses in Kent receive business from cruise passengers who depart from Dover or take part in excursions during a port of call. • Educational groups from schools as well as language schools are not taking place and there is no guidance yet on when they will resume. Many attractions rely on educational groups for regular business outside school holidays and during the week.

Wider impact

• As the data above shows, the visitor economy has been one of the hardest hit in terms of jobs. While the job retention bonus may go some way to helping reduce redundancies it is not clear if this will be enough to protect jobs and a more targeted approach may be needed. • The visitor economy employs a higher proportion of young people and women than the national average and accounts for more jobs in deprived areas. Job losses from the sector would therefore have a disproportionate impact on more vulnerable and disadvantaged groups. • Having a vibrant visitor economy makes Kent an attractive place to live, work and invest. Any erosion of the visitor offer would mean a reduced quality of life for residents and it could also have a knock-on effect on levels of investment into the county.

3. In your opinion, what (or what more) – if anything - should Kent County Council do to boost the visitor economy in Kent as a reaction to the impact of Covid-19?

During the Covid-19 crisis, the role Visit Kent plays in supporting businesses and providing a coordinated response has arguably been more crucial to the sector than ever before. Looking ahead to how we rebuild the visitor economy and the many challenges that still need to be overcome in the coming months, we must ensure that the resources are available to continue to deliver a programme of collaborative, targeted activity to help the sector bounce back quickly and protect as many jobs as possible.

To ensure that any action taken has maximum impact it must be aligned with wider placemaking and regeneration initiatives, including improving bed stock, venue capacity and product quality. This will ensure the integration of business improvement into the visitor economy recovery strategy to ensure the county can capitalise on any emerging opportunities that are emerging as a result of changes in consumer behaviour.

Save our Sector

In the short-term targeted activity to ensure businesses survive the winter will be crucial.

• More than 50% of Visit Kent’s core funding is from private sector partners. Although businesses have valued the work that we have done to support them over this time, many are still in a position where they are unable to invest financially in the visitor economy through Visit Kent. The current uncertainty means that this vital source of revenue may be unavailable for some time. Additional funding from public sector partners to support Visit Kent until the private sector is able to contribute fully again would ensure that capacity is available to deliver not only the immediate business support and sector-specific expertise which businesses need, but also the strategic development which will ensure the long-term prosperity of Kent’s visitor economy. This would allow Kent to capitalise on the opportunities in the domestic market and the current preference for rural and coastal destinations through targeted and sustained marketing and well as supporting businesses to develop and plan for the future. • To help businesses survive over the winter period, immediate action to drive off-season visits through enhanced domestic campaign activity will be needed. By developing demand for the off-season, this will also have a long-term benefit of creating more sustainable year- round jobs. • Many businesses have had to adapt or diversify to continue trading or to target a new market. Grant funding or support for businesses to invest in innovations that make their businesses viable in the long-term would support dynamic businesses to survive. • Areas of the visitor economy that have been hardest hit require targeted interventions. Specific pots of funding to rebuild those areas identified above (international markets, meetings and events, cruise etc.) would ensure that support is injected into these high value areas of the visitor economy that are suffering most. • At a time when customer confidence is fragile, investment in our open spaces, and particularly our public realm is critical if we are to encourage footfall and rebuild communities. Our destinations need to look their best to provide a great visitor experience, recommendations and return visits. Therefore, local authority investment in street cleaning, public toilets, bins, green spaces and the public realm should be a key priority.

Back to better

Building in solutions to long-term challenges such as sustainability and retention of staff as well as wider placemaking initiatives will mean that the visitor economy can emerge stronger than before.

• The shift in consumer behaviour has been accelerated by the pandemic meaning that a re- curation of our high streets is urgently needed. The experience of the visitor should be a key priority in any place making or regeneration exercise. • The temporary relaxation of planning legislation to encourage easier access to pavement licences should be seen as a pilot for reimagining the use of our public spaces and positive aspects of the scheme implemented on a permanent basis. • With major events such as 149th Open and Folkestone Triennial moving to 2021 we have an opportunity to supercharge the recovery next year by funding activity which uses them as a platform to raise the profile of the destination and drive visits across the county, throughout the year. • In order to meet carbon reduction targets, building in sustainability to the revival of the visitor economy is an opportunity not to be missed. One of the biggest barriers to using public transport is the last mile and with transport providers needing to rethink services in line with changing behaviour, there is an opportunity for local authorities, transport providers and tourism businesses to work together to overcome these challenges. • There has been an increased interest in cycling and walking during the lockdown. Kent has a strong walking and cycling offer but further investment in this infrastructure would be beneficial for residents as well as helping to attract more visitors. • Through the Interreg experience project Visit Kent will be providing a programme of support to businesses to help them develop a stronger off-season product. If there are any complementary programmes that we could refer businesses to where they could access capital grants for their projects, it would mean we could potentially support larger scale projects and deliver more benefit. • The visitor economy has been shown to be a quick job creator following a recession, therefore we need to work closely with businesses and educators to ensure that businesses have access to the skills that they need, that good quality jobs are created and that young people understand the opportunities of a career in the industry.

Moving forward for Kent

The recovery of the visitor economy needs to be delivered in collaboration with partners in other sectors and across the region to deliver maximum benefit.

• Following a successful Straits Committee meeting on 1st July, it is important that KCC uses this momentum to solidify the relationship with our partners across the Channel and deliver on the actions and opportunities identified in this meeting, particularly those related to consumer confidence and educational tourism. • Visit Kent and Locate in Kent have been working closely together on a number of projects in recent years. We understand that a great place to visit is also attractive to live, work, study and invest in. With the shift in working behaviour there may be many businesses and skilled workers looking to move out of London so there may be an opportunity to develop a joint destination pitch focussing on the quality of life. • With investment in and Newtown Works Studios planned over the coming years, we need to ensure that the wider county is in a position to capitalise on the additional leisure and business visitors that these investments will bring to the area. Visit Kent would be well placed to help embed these organisations into the wider visitor economy through our existing network. • The Tourism Sector Deal, approved in June 2019, sets out a plan to increase productivity and investment in the sector. It is likely that much of this strategy will be repurposed to revive the sector following Covid-19. One of the main measures was the introduction on five pilot Tourism Zones across the UK which would benefit from a package of support and funding for the sector. If this opportunity arises, we ask that KCC support us in developing a county or LEP-wide bid.