Annual Tourism Business Figures
PKF Francis Clark’s latest annual tourism business figures show that 2017 was a bumper year with overall occupancy trading at 55%, the highest annual figures recorded by the firm. This is in contrast to the early part of this decade where the figures hovered around 50%. Average occupancies were also up on 2016 levels at 1.5%.
Month on month there were also some interesting variations with the usual peak during the summer months, but a spike in occupancies in November and December which are now closer to 40% on average, as opposed to below the 30% mark, previously experienced in the sector.
Spend on repairs and maintenance in 2017 was on average 6.7% of turnover which is higher than historic levels of around 6%.This reflects the long term trend that has seen repair costs tending to be higher when funds are available, reflecting the fact that some of the spend can be discretionary.
Over the medium term, spend on capex and repairs have normally driven additional turnover growth as customers have been prepared to spend more. Advertising spend is up on long term averages with spend currently at around 2.7% of overall turnover. Historically spend in this area has only been around 2% of turnover.
The annual tourism business figures have been produced over the last ten years by the firm and consist of a database of hotel occupancies, and room nights, which then aggregated with market information on profitability and tariffs act as a valuable barometer giving insight and feedback to the firm’s clients and the South West tourism sector as a whole.
Tom Roach, Lead Tourism Accounting Partner said:
“Our tourism barometer figures are optimistic overall for 2018: with regard to occupancy, we normally see a figure above 2% as significant, but a 1.5% overall increase remains good, particularly when compared with the overall picture. More generally the economic outlook is also stronger than anticipated and with inflation remaining low which should bode well for the sector in 2018.
“Investment in the tourism economy is key and the latest plan by the Cornwall and Isles of Scilly LEP is really supportive of this lobbying for the region to be a test bed for a post Brexit VAT system, arguing for a sector deal for tourism and the devolution of Visit Britain’s budgets for overseas tourism development and promotion.
“This key aspiration to drive up inbound tourism from abroad should also be helped by a weak pound, and the Euro remains strong against the pound which again is helpful. However the key to driving the tourism business in the South West has to be recognition of the facilities and attractions, so having marketing as a central plinth in the LEP strategy is crucial if we are to capitalise on the current economic climate.”