The coronavirus pandemic has resulted in many South West hospitality businesses becoming highly innovative and finding new income streams which will help the sector bounce back, a leading expert says.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, stressed “necessity is the mother of invention” for the industry and said an “unexpected positive” from the turmoil caused by the pandemic lockdown is that many businesses have initiated “viable” new ideas.
He said: “Many businesses have initiated viable new business practises – whether it be repositioning to cater for the surge in domestic tourism, operating remotely, or diversifying their offerings with new income streams.
“SMEs across the region have been forced to take a fresh look at their business models and forge new revenue streams to tide them over – but many are now finding that these new processes may also be profitable in the long-term.”
He gave the example of Cornwall’s Tregenna Castle Resort, a leisure and events venue which was forced to close when lockdown measures were first introduced but, with the help of a £1million loan from Lloyds Bank, made possible via the Coronavirus Business Interruption Loan Scheme (CBILS), the business invested in additional marketing to help attract bookings in preparation for reopening.
And to help sustain income throughout lockdown, Tregenna Castle Resort also launched a takeaway delivery service from its brasserie.
“The resort has shown how, with and the ability to diversify, businesses can adapt and show resilience in this the new world we find ourselves moving into,” Mr Beaumont.
He said the region’s hospitality industry has been able to lean on “welcome measures” put in place by the Government, including the Eat Out to Help Out scheme, and VAT cuts worth £4.1billion, which should help firms re-strengthen their margins.
And he stressed: “The dynamic nature of local firms and the diverse economies boasted by the region – not just hospitality and tourism but high technology manufacturing, aerospace and agriculture - will also be major factors in the region’s sustained comeback.”
According to research from the Tourism Alliance, income from domestic tourism in the South West was £4.4billion in 2018, with international visitors injecting a further £1.1billion.
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Lloyds’ monthly Business Barometer surveys 1,200 businesses and provides early signals of economic trends regionally and nationwide. Findings from June revealed overall business confidence in the South West rose 27 points – the biggest increase of all UK regions.
“Swathes of the South West economy rely hugely on seasonal tourism - this lift in confidence was directly linked to the Government’s announcement that many leisure and hospitality businesses would be able to reopen,” Mr Beaumont said.
Confidence fell marginally in July by three points, but is expected to hold steady as firms adapt to new ways of working, he added.
He said it is likely holiday destinations in the region will become even more popular, boosting demand and in turn the confidence of the sector.
“I’ve been both impressed and encouraged by how creative and persevering businesses have been, adapting quickly but carefully to ensure customer safety,” Mr Beaumont said.
