Cumbria's comeback

Cumbria lost an estimated £230m in tourist revenue because of the foot-and-mouth epidemic last year. Now it is open for business again, and Helen Adkins found an air of cautious optimism for the coming season.

It's just over a year since the Government announced it was closing the countryside in order to control the foot-and-mouth epidemic. After a blanket ban was imposed on all country footpaths, farmland and fells in Cumbria, its £981m tourist industry lay in disarray. When the population wasn't being told to stay away by Tony Blair, daily images of burning pyres and statistics claiming that Cumbria was the worst affected region in the UK were enough to keep visitor numbers down by a third.

While Cumbria County Council estimates that the county lost £230m in tourist revenue last year (a more recent study by Newcastle University puts the figure at £400m), the fallout from the foot-and-mouth disaster has had widely differing effects on businesses, depending on location, target audience and marketing opportunities. In turn, recovery is visible but patchy.

Those most vulnerable were smaller businesses in areas that relied heavily on walking and outdoor activity trade, according to Chris Collier, chief executive of the Cumbria Tourist Board (CTB). While there are no exact figures of how many went out of business last year, she says places like the Borrowdale, Ravenstondale and Eskdale valleys suffered badly. She adds: "And along the coast-to-coast walk, I've heard that a lot of the B&Bs are just not there now. Yet, perversely, in some very hard hit foot-and-mouth areas they got an influx of vets, army personnel and media, all of whom needed accommodation. People up there managed to keep going that way. Elsewhere, people are now hanging on for Easter."

Wasdale Valley, home to England's highest mountain, Scafell Pike, is a Mecca for walkers and climbers. When the valley was closed in February last year, Howard Christie, landlord of the Wasdale Head Inn, described the drop in business as "like a tap being turned off". The 10-room, three-suite inn has an annual turnover of £700,000, with 70% of business being repeat trade and 65% of takings coming from the bar through passing trade, local B&Bs, campsites and residents.

By March, takings had dropped by 97%, and by the end of July total revenue loss was just under £250,000. Christie was forced to lay off most of his 15 staff, postponed refurbishment and development plans and took private consultancy work to stay afloat. By communicating with his loyal customer base he managed to fill the inn at Easter, despite the fact that residents could not walk further than the car park, but without passing trade Christie estimates he is down 47% in takings for 2001. Business has picked up since August and there are hopes that a new marketing campaign to promote the International Year of the Mountain 2002 will bring even more business.

His problems, however, are far from over. Discounted rates and deposits carried over from last year, plus a hefty corporation tax bill means Christie continues to have problems with his cash flow. He says: "You can get a false feeling that things are coming back and then you realise that your cash flow is not the same. That's going to happen to a lot of people this year, particularly those who have deferred VAT and national insurance payments to make. Some businesses have gone already, others will go."

A few miles away, in Nether Wasdale, Adrian Olney, owner of Low Wood Hall country house hotel, estimates his average occupancy for 2001 was 15%, down from a projected 80%. New to the hotel trade, Olney and his wife had bought the 12-room hotel in September 2000 and spent the next few months, and £30,000, refurbishing the property. Bookings were slow over Christmas but the couple anticipated a successful 2001.

It never came. "Once the fells were closed the phone didn't stop ringing," remembers Olney. "Every single booking we had that year, right up to September, was cancelled. We laid off all our staff bar the chef and used our personal savings to stay in business. Our problem was that we weren't known. We were the new kids on the block and so were empty for most of the year."

Twenty miles east, in the so-called "honeypots" of Windermere and Ambleside, tourist businesses suffered too, yet many recovered quickly when the fells were reopened in July and visitors were coaxed back into the region.

David Nicolson, proprietor of the three-star Holbeck Ghyll country house hotel in Windermere, reported a more modest 20% fall in business between February and June last year, yet quickly achieved the previous year's levels of occupancy and income once the fells reopened. He is optimistic about the coming year, and even believes that increased marketing activities last year brought in new customers whom he hopes will return.

Mike Bevans, proprietor of Linthwaite House, Windermere, says his business was £90,000 behind on revenue by the end of May 2001, a fall of 30%, yet expects to claw that back by the end of this month. The loss of American business post-11 September means his average room rate has dropped from £101 to £91, but last year's turnover will be met with an increase in rooms sold as a result of increased domestic marketing. "Through December, January and February we have had record months in terms of revenue and occupancy. We did do some good offers, but I sensed the demand was there," Bevans says.

The differences in the experience of many tourist businesses in the area shows the fragmentation in the market, according to Bill Smith, chief executive of the Lakes Hospitality Association (see below). He attributes the survival of many businesses during the first six months, in part, to how they were able to market themselves and keep in touch with their customer base.

"Those who didn't have access to the market, those who relied on people turning up or tourist information suffered a great deal more than those who were able to court their market," he says. "I think what foot-and-mouth highlighted is that you can't just sit back and wait for business to walk through the door. You can't be complacent."

Government support with marketing has been forthcoming and useful to many. An extra £2.2m grant was given to the Cumbria Tourist Board, a significant increase on the £500,000 it relies on from the private sector each year. The grant meant the board could give businesses free marketing in all its publications, local authority and tourism initiatives, plus free Web-site entries, free membership of the CTB and up to £15,000 of direct cash per business to use for marketing, to pay interest on mortgage or loans, towards refurbishment, or IT. Money was also forthcoming from the English Tourism Council and the North West Development Agency, which donated cash towards marketing.

Collier says the money has meant a lot to the area in terms of getting business back on track. "The cash we have been able to use for marketing campaigns has speeded up the recovery and goes to prove that a small amount of marketing money goes a long way. It's an investment and we would have seen many more business failures had we not done that marketing."

Bill Smith of the Lakes Hospitality Association agrees that marketing is the way forward. "The one thing that has come out of this is that most of the agencies working hard to market the area are working more closely than they have ever done. We have a very close relationship with the CTB and South Lakes District Council now, and are working together to maximise opportunities. We are becoming more aggressive in our marketing."

While many hoteliers remain cynical about the level of support given by the Government last year, there are others who feel lessons have been learnt. Simon Berry, managing director of English Lakes Hotels, which has four hotels in the region, reports business was 25% down last year but says the coming year is looking good.

"The work of the CTB is bearing considerable fruit. By marketing England, the Government has woken up to what a big industry this is and how interdependent we are with other industries. If there can be a silver lining to the cloud of last year, it's that the Government is beginning to see the value of tourism and has seen how relatively small amounts of money can make significant gains."

The Lakes Hospitality Association

The English Lake District Hotel and Caterers Association was set up 50 years ago as a luncheon club to bring together hoteliers and caterers in the region. There are two divisions, north (80 members) and south (200 members). A Lakes Hospitality Exhibition is held annually.

In July 2001 it was renamed the Lakes Hospitality Association and a chief executive appointed for the first time as part of a strategy to move the organisation forward. The initial aim was to build the membership base and more adequately reflect the changing lifestyles and needs of the industry.

Since the foot-and-mouth crisis, the association has also focused on the need for a strong, consolidated and representative voice for the industry.

Aims include:

• Broadening membership to include all aspects of retail, attractions, service and associated tourist activities.
• Working towards stronger and effective representation on bodies directly related to the wellbeing of the industry.
• Improving membership communications, upgrading access and design of the Web site.
• Improving standards within the industry to a level above the norm.
• Developing a more aggressive marketing approach, working more closely with the CTB and other organisations.
• For further information, call 015394 44495, www.south-lakes.com.

Marketing Cumbria

• First Cumbria Week held in London on 20 February 2002.
• Throughout 2002, Cumbria celebrates the 100th birthday of Beatrix Potter's The Tale of Peter Rabbit, plus the 200th anniversary of Wordsworth's Daffodils poem.
• Trade mission to Japan went out in October 2001 to target Japanese market for Beatrix Potter anniversary.
• The main Web site, www.gocumbria.co.uk, has been updated and special offers Web site www.lastminutelakedistrict.com launched, and www.lakedistrictoutdoors.co.uk is to be updated by Easter.
• Three new Web sites launched to promote the Commonwealth Games in Canada, Australia and New Zealand.
• The Cumbria Tourist Board has published 400,000 copies of its main holiday guide this year, compared with 250,000 last year, alongside a range of new publications and an activities magazine which have been planned for later this month.

Tourism in Cumbria

Number of visitors: 2000 - 23.9 million; 2001 - about 15.9 million
Average room occupancy: 1999 - 49%; 2000 - 48%; 2001 - 46%
Room occupancy in Cumbria 2001
January to April: 33%
June to September: 57%
September: 61%
Value of tourist industry: £981m (18% of GDP for Cumbria)
Estimated loss for 2001: £230m
Tourism revenue by district: Allerdale - 20%; Barrow - 7%; Carlisle - 13%; Copeland - 9%;
Eden - 13%; South Lakeland - 38%
Source: Steam 2001