Policymakers have a golden opportunity to help small firms make the most of the tourism season, according to the Federation of Small Businesses (FSB).
The UK’s unparalleled attractions, coupled with favourable exchange rates, will likely attract a wave of international visitors over the next few months – while budget-conscious Brits will be looking to make their money go further with local staycations.
Recent data from the latest Small Business Index (SBI) shows there has been a big rebound in confidence in accommodation and food services, up 53.7 points to -17.8 points.
The fact that it remains in the negative zone highlights the challenges faced by the sector in the aftermath of Covid-19 – with 77% of small tourism and hospitality firms saying they carry some sort of debt, compared to 59% pre-pandemic.
This means the Government and other policymakers must consider urgent ways to alleviate the burden on our tourism industry.
To help, FSB has created a Sunshine List to help lift tourism firms this summer:
- Transport needs to run smoothly – and the government must ensure its Pothole Fund is fairly allocated.
- Parking must be accessible on high streets, with tourist hotspots increasing park and ride.
- Raising the VAT threshold from £85,000 to £100,000 could spark growth in the hospitality industry, as currently, many tourism firms halt trading near the end of the tax year to avoid hitting the current limit and incurring additional costs.
- The Small Business Rates Relief threshold should be increased to £25,000 to remove 200,000 small firms out of the rates system.
- Cheaper energy costs – energy firms should adopt FSB’s proposal to allow small firms who negotiated their contract at the height of the energy crisis last year to be able to ‘blend and extend’* their contracts to take advantage of lower wholesale prices.
- Local Visitor Economy Partnerships should come up with plans that are fully reflective of small business interests.
FSB National chair Martin McTague said: “This summer presents a kaleidoscope of opportunities for small firms in the hospitality and tourism sectors across the UK. There’s a wealth of things to do here – from historical sites to traditional fish and chips by the sea – so it’s no wonder people flock here every summer.
“Long-term weather forecasts are notoriously unreliable, but we hope the Met Office’s predictions of a warm summer come true, giving a fillip to small firms that rely on tourists.
“Small firms have already endured the profound impact of the pandemic and overcome numerous obstacles, and now they must navigate high inflation. The improvement in hospitality confidence indicates the first green shoots of recovery, but they need continuous care and support.
“Stimulating our tourism and hospitality sectors with our Sunshine List this summer could make the world of difference, allowing hospitality firms to be the best they can possibly be. In turn, this will mean tourists can properly support our small business ecosystem, helping confidence leap into positive territory.”