The latest tourism barometer has checked the pulse of the sector in Wales. While not flatlining, the soggy summer and cost of living crisis has damaged its health.
The Wales Tourism Business Barometer 2023: Summer Wave Report has shown that the boom of the Covid and post Covid summers has fallen away. Bad weather and the current costs hitting families and businesses were the main reasons – although that’s not to say it was a complete washout.
Mixed bag is probably the best description of the June, July and August months covered in the latest barometer – the peak time for the vital tourism sector in Wales. Those mixed responses were reflected in the comments which ranged from ‘bleak, dire and a complete downer’ to one operator having one of their best years on record.
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So what do the figures show:
The barometer is a survey of businesses and the headline summer performance question asks accommodation, attraction and hospitality operators: “How many customers have you had this summer compared to last summer?” This gives a good guide to where things stand.
The responses were a concern with the overall results showing 20% saying they were ahead of last year, 40% were about the same, and 40% had fewer customers. There was a real variation across the sub-sectors with nearly half of all attractions saying numbers were up and only 24% saying they were down. But when it came to serviced accommodation it was 25% with positive numbers and 39% saying visitors figures were down, and there were similar figures for hospitality.
It was particularly bad for self catering and campsites with the latter obviously hit hardest by the poor weather. Self catering is currently navigating the new Welsh Government rules and premiums.
Comments, which are not attributed, included: “We went deadly quiet from July onwards. It has been our worst year” and “Because of the weather we were 50% down on last summer”.
On the flipside the poor weather meant some attractions saw more people through the doors as beach days were off the table. “The weather was terrible so we were busier,” said one North Wales attraction.
There was also a difference when it came to regions with Mid and North Wales performing the worst while the South East of Wales had the strongest performance.
Reasons for being quieter
The 40% of businesses who were quieter were asked why in the survey. Around half cited the economic crisis that had left people with far less disposable income. There were also 46% who gave weather as a reason after an utterly dismal school summer holiday period.
The third most common answer (23%) was holidaymakers going abroad with a hike in overseas trips after Covid hit years. Other factors included Welsh Government policies at 8% – with the proposals for a tourism tax and also tightening of the rules around second homes.
One North Wales restaurant owner said: “It has been a lot quieter this year because of the weather and lack of income. People are being more frugal.”
A self catering operator in Mid-Wales said: “It’s been absolutely dire. We can’t just blame the weather as people usually book their holidays in advance, regardless of the weather. There have also been a lot of cancellations. I think, unfortunately, that this is a sign of the times.”
Another added: “It is looking very bleak. People are nervous spending money on holidays.”
Looking forward – Advance bookings
Booking levels for September are looking quite healthy, with an average of 63% capacity booked at the time of interviewing (early in the month). To put this into context, the Wales Accommodation Occupancy Survey last year reported average room/unit occupancy of 73% for self-catering and independent serviced accommodation operators in September 2022, and a little higher for larger hotels. Given the noticeable last minute booking trend that figure could be reached or surpassed especially as the weather has improved in September.
“I am chock-a-block in September and October – it’s a bit early to say for the winter” said one hotel.
Another added: “September is very busy with a lot of last minute bookings because of the nice weather.”
Confidence in running profitably
This is a crucial stat which highlights if businesses are facing a cash crisis in the coming months. About three in five (58%) operators are confident about running the business profitably this year – with 25% either not very confident or not at all confident, a concerning figure.
That contrast was reflected in the comments:
“I believe we are in for a good year. We have done a lot more marketing and visited trade shows and I believe it has brought in more people.” said an attraction in North Wales. But a Mid-Wales self catering business said: “We’re on a complete downer.”
One reason to reduce prices and hit profitability is to meet the new ‘182 day rule’ to qualify for business rates rather than the premium domestic rates on second homes.
“The push for 182 days of occupancy is really affecting business. It’s pushing us into a position where we will go bust next year because it is driving the prices down,” said a self catering operator in Mid-Wales.
“To fill August, I had to discount the rates sharply. I’m giving it away. We’re over a barrel with the 182 day rule and people are picking up on this” said a self catering business in North Wales.
It is clear from the figures that it has been a challenging summer for many in the tourism sector.
Whether this is a blip is yet to be seen as it is hoped people’s finances may look better next summer and operators can hope for a better summer weather wise.
But is also the challenge of the Wales tourism tax and other measures aimed at tackling second homes which could drag on the industry.
