Business performance falls short of tourist board predictions

One-third of holiday businesses in Devon and Cornwall made a loss in 1995 despite the hot weather, according to a survey conducted by the Liberal Democrats.

The survey of 2,456 tourism-related businesses in the region, including hotels, reveals that traditional seaside resorts continued to struggle in 1995, despite earlier reports of a bumper year.

And only 35% of businesses in the region are confident of a good business year in 1996, the report says. This is despite recent predictions from the English Tourist Board of another excellent year for domestic tourism.

Adrian Sanders, spokesman for the Liberal Democrats in Torbay, said: "It is extremely alarming that when tourists are turning back to the British holiday, the industry is still struggling."

Some 81% of respondents to the survey believe that the UK tourist industry is at a disadvantage compared with its European competitors because it still pays the full VAT rate on hotel accommodation.

Further issues of concern to hoteliers are the uniform business rate, high water charges, the cleanliness of beaches and excessive government regulation.

The burden of excessive business rates and VAT is also highlighted in a separate survey, conducted by the West Country Tourist Board (WCTB). Some respondents said they had seen rates increase by 87% this year.

The WCTB surveyed 1,400 tourism businesses, monitoring performance from January to June 1996. Half the businesses surveyed had seen an increase in sales against the same period in 1995. But the average increase was just 5.4%.

Looking at the year ahead, half the respondents thought 1996 would prove to be the same as last year, or worse.