We’ve made it through another difficult festive season. The majority of small businesses in Wales are open again and welcoming customers back with confidence.
As we head back onto the high street and look towards a recovery, it’s important to recognise that not every industry has the same starting point.
The Welsh tourism and hospitality sectors are invaluable to the Welsh economy but have faced some of the hardest hits. Before the pandemic, tourists were spending on average over £8 million a day in Wales – adding up to £3 billion a year.
Most hospitality businesses are small or medium sized enterprises located throughout the country, in the heart of our cities, on our local high streets, along our coastlines, countryside and in remote idyllic rural locations. Tourism and hospitality businesses are a crucial part of our communities, providing a meeting place for many and playing a key role in tackling loneliness and improving wellbeing.
Undeniably, tourism has been particularly hit by Covid-19. Our research suggests that the time period of 2020-21 was the equivalent of 3 winters for those within the sector. For a beautiful country that usually welcomes over 1 million tourists a year, the impact of the pandemic and resulting restrictions have been challenging, to say the least.
It’s important that both the UK and Welsh Government recognise the impact the tourism and hospitality sectors have on our economy and act now to ensure it is best placed to make the most out of the coming summer months, which has the potential to be more promising than the last few years.
New research published by the Welsh Government suggests Wales is the UK’s 3rd most preferred holiday destination for an overnight trip this summer, as confidence that trips will be able to go ahead has increased by 10% since 2021.
While increased demand on their services is to be welcomed, it’s important to recognise the need for clarity and confidence in the ability to plan ahead.
Those within the tourism and hospitality sectors will be finding themselves in an increasingly difficult situation, many having lost the vast majority of the festive season and are now faced with the unenviable task of working out how to quickly upscale delivery to meet the demand of the coming summer months, under a shroud of uncertainty.
Many businesses are reporting concerns over staff recruitment, potentially meaning that meeting holiday makers’ demands may be challenging. In addition to staffing issues, April is set to land a cocktail of extra costs at the feet of these businesses. Not only will the 100% business rates relief for retail, leisure and hospitality be reduced to 50%, but VAT will be increasing from the reduced rate of 12.5% to 20%, while National Insurance contributions for employers is set to rise by 1.5%, and energy prices are set to soar.
All of these challenges will be set against the continuous uncertainty around the potential for future restrictions in Wales.
Now is not the time to take our feet off the gas. While holidaymakers may indeed be expected to flood the Welsh coastlines, uncertainty still looms. Businesses might be open but make no mistake; there are still firms that will be facing incredibly difficult decisions in coming months if our governments do not make decisions in their best interests, and at FSB Wales we will be continuing to work tirelessly to try and affect this.
Throughout the latest set of restrictions, the Welsh Government provided targeted support to the businesses most impacted, but many in these sectors will find themselves asking, what now?
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