'Economic alarm' sounded as fears rise over cost of living damage to tourism in Somerset

Tourism chiefs in Somerset are predicting an economic downturn of up to 30 per cent this year because of the rising cost of living.

The sector is estimated to bring more than £1 billion pounds to the county's economy each year.

A squeeze on living standards and competition from abroad have added to fears that businesses could be badly hit.

Visit Somerset is predicting a very difficult year for the visitor economy, which is worth around 24,000 full-time equivalent jobs.

The organisation's chief executive has said the industry is looking fragile because of inflation, tax, and fuel increases beginning to to bite.

There are fears the visitor economy in the county faces a challenging future Credit: ITV News

Along with the onset of the rest of the world opening, there are the issues of people wanting to get away to hotter climes, such as Spain and Portugal.

John Turner said: "The poor financial state of the industry, with rising energy costs and national insurance, increases in national living wage, increases in VAT, are all putting massive pressure on already fragile small and medium-sized businesses in the sector, who, even with recent government support, are still feeling very vulnerable in the marketplace.

"In terms of international visitors, Visit Britain has already stated that there won’t be any international recovery until at least 2025.

"Visit Somerset feels that the sector is far from being in a comfortable position, despite the reopening of the country and this year will be one about potentially holding our nerve, with possible contraction and not growth.

"However, we will as always give a very warm welcome to all even in these challenging times."

The Yarn Market Hotel in Dunster has seen many guests postponing stays during the pandemic until this year Credit: ITV News West Country

Across Somerset, people who rely on tourism for their livelihoods have given similar feedback.

Antony Brunt owns the Yarn Market Hotel in Dunster and told ITV News he's expecting a busy year with many customers rearranging their stays from cancelled trips during the pandemic.

He fears the long-term impact of a rise in VAT and said: “With the news of price rises coming every day it does not surprise me that for the second two weeks in August we still have not got a single booking.

"To put this in financial terms at present our income will be zero compared to a potential £49,000.

"Levelling up is a phrase so often used in politics, but I fear the return of hospitality VAT to 20 per cent is going to have the opposite effect.

"Most hotels and guest houses in the large cities like London have a large proportion of business clients who do not mind paying VAT because they can reclaim it.

"On the contrary, hotels and guest houses in Somerset and other rural areas predominantly have private tourism guests who cannot reclaim VAT."

Weston-super-Mare's famous Grand Pier will need to pass on increases in food and drink costs to customers Credit: ITV News West Country

Michelle Michael, director at Weston-super-Mare's Grand Pier said: “The guest coming to Weston super Mare will be one of the hardest pockets hit with all the price rises in a climate where their wages will not go up proportionately.

"Whilst as a business we will have to pass on any rise in costs, because we in turn must pay our staff the new National Living Wage, as well as shoulder huge hikes in food and drink costs, insurance, VAT raw materials, building materials, and other costs, there is only so much that our customers can sustain themselves.

"The seaside is portrayed as a value day out for all the whole family. It is quickly becoming expensive for visitors to sustain”

Middlewick Holiday Cottages has diversified to include a spa and will soon open a new farm shop Credit: ITV News West Country

Many businesses are doing what they can to find other ways of making money. Jonathan Barker owns Middlewick in Glastonbury, who have installed a yoga room and spa treatment huts as well as plans for a new farm shop.

He says he's noticing people changing the way they approach holidays, saying: "Our summer bookings are down still as I am sure people are waiting to see if they can go away before they book any holidays.

"Our summer bookings are usually made up of international visitors but again we haven’t seen that happen.

"Our first American groups are due to come the end of August, but we are still crossing our fingers they will return.”

Visit Somerset says its aim by sounding this economic alarm is not to be pessimistic but realistic - tourism in this beautiful part of the world faces an uncertain future.