COVID-19 could cost North East’s tourism sector £3 billion

New research has revealed that the economic loss to the North East visitor economy could be nearly £3 billion if lockdown continues into the summer months.

The research – which combined historic data alongside insight from 90 in-depth interviews – was conducted by NewcastleGateshead Initiative (NGI) in collaboration with a range of partners, as well as a newly formed tourism industry panel.

The sector can expect a loss of up £955 million if the lockdown continues through to the end of May, while the impact would be far greater if it lasts for the entirety of the summer.

Tourism is the fourth largest sector in the North East, worth over £5 billion to the economy each year and supporting over 66,000 jobs in the region. In 2018 the region welcomed over 90 million visitors – an increase of eight million in the space of five years.

Half of the businesses surveyed indicated that without additional support from the Government they would not last for more than three months of lockdown. Retaining staff to allow for re-opening is a major concern for businesses – 70 per cent of businesses have, or plan to, furlough staff, while 17 per cent have already made the difficult decision to cut jobs.

NGI is working alongside local authority partners, Newcastle City Council and Gateshead Council, and the region’s tourism industry to make sure that the North East’s voice is heard on a national stage.

Sarah Green, chief executive of NewcastleGateshead Initiative, said: “We have spoken to over 600 businesses in the region to offer support, gather intelligence and understand the impact of COVID-19. It is clear that tourism is one of the industries hardest hit by the current situation and that businesses are looking for support and guidance.

“Tourism businesses support the lockdown measures as an essential step to save lives. Where they can, we have seen many businesses stepping in to support the NHS and key workers. We have worked with over 80 accommodation providers to identify emergency beds for key workers and others impacted by the crisis.

“It is clear that the impact of lockdown on the tourism economy is devastating. The region has worked very hard to grow visitor numbers by eight million over the past five years. Our tourism strength is based on the breadth and diversity of the sector, therefore every business lost has a significant impact on the attractiveness of our offer. In regional terms, the tourism sector is the fourth biggest employer supporting 66,000 jobs.

“Tourism also plays a critical role in changing perceptions of the region – supporting the Government’s levelling up agenda by driving inward investment and capital development. It is therefore critical that policy makers, both regionally and nationally, work with the industry to find ways to mitigate the current challenges and to ensure we position our tourism businesses for the future – retaining jobs and the attractiveness of our region.

“In the longer term, we know that people will want to travel, it is human nature to want to explore, and we need to make sure that when this happens people think of the North East as a great place to visit. We need to have a variety of diverse tourism businesses, from local SMEs to the large corporates, ready to give a great authentic North East welcome.”

The research was revealed at the first of a new series of webinars, ‘Innovating and Adapting in 2020’, run by NGI as part of its GX Project aimed at supporting North East SMEs.