The price of survival

13 December 2001 by
The price of survival

Terrorism, war and the threat of recession may have edged foot-and-mouth out of the news, but not out of the minds of many in British hospitality. Tessa Fox reports.

Smoke-filled skies, harrowing accounts from people filled with anger and disbelief, a shattered tourism industry… these are not images following the terrorist attacks in New York, but from around the UK in spring 2001, when foot-and-mouth disease started its devastating march through parts of rural Britain.

With much of the hospitality industry focused on tempting American tourists back to Britain in the wake of 11 September, foot-and-mouth has been bumped off the headlines. There have been no new cases since the end of September and the last infected area was demoted to "high risk" status at the end of November, but the impact of the disease is still felt acutely by many now rebuilding business. Paul Henderson, whose Devon hotel, Gidleigh Park, is popular with overseas visitors, says: "September 11 lost us £20,000 of American business, but foot-and-mouth has been the big problem."

However, most of those interviewed in the worst-hit areas of Cumbria, Devon and southern Scotland at the height of the crisis (Caterer, 12, 19 and 26 April) are looking forward now, albeit with little of the financial cushion they would normally have to tide them through lean winter months. Many have recouped some losses through strong autumn trade, fuelled in part by tourists' love of the countryside and in part by a British preference for UK breaks post-11 September. Malcolm Bell, chief executive of South West Tourism, goes as far as saying: "It's been a fairytale end to the season."

A note of caution
Even operators in Cumbria, the worst-hit region, say things are improving. Neil Walmsley, of the Old Dungeon Ghyll hotel in Langdale, says walkers returned as soon as the fells reopened in early August, and while he expects turnover for 2001 to be 30% down on 2000, that is far better than at the height of the crisis when trade was 80% down. The same goes for John Cunliffe at Gilpin Lodge hotel and restaurant in Windermere, who has enjoyed record November trade, and David Nicholson at Holbeck Ghyll hotel, also in Windermere, where the month closed 40% up on 2000 after being 25% down between February and June. Nicholson sounds a note of caution, however: "We can't be complacent. We've only ever had 10-15% growth every year, and foot-and-mouth will have a lingering effect."

In southern Scotland business is "picking up nicely" for Gerard Bony, general manager at the Peebles Hydro hotel in the Scottish Borders, and, at Crossmichael in Kirkcudbrightshire, Tony Borthwick and business partner Charles Kirkbride at the Plumed Horse restaurant are expecting the year to end on a par with 2000. This is despite winning a Michelin star in January, however, which the pair had hoped would improve revenue by up to 40%. Meanwhile, in Lifton, Devon, Anne Voss-Bark has had the busiest autumn she can remember at the Arundell Arms hotel, hard on the heels of the busiest August for a long time.

The overall picture now is one of optimism. But how did operators get through the awful months? For Bell at South West Tourism the crisis has highlighted the importance of marketing and communication. He cites the case of one hotelier on Dartmoor who turned a promotional image of the region into postcards and mailed them to 4,000 clients, receiving 250 bookings as a result. Another success was the Two Moors festival promoting Dartmoor and Exmoor in October.

Worst year in seven years

At Knockinaam Lodge in Portpatrick, Wigtownshire, owner Michael Bricker says it's been the worst year in seven years of ownership, with trade seriously affected by 11 September as well as foot-and-mouth. Nevertheless, he kept in touch with his database of 2,000 guests throughout the crisis period, and a promotion offering a 30% reduction on a two-night stay and a third night free has worked well. "Now we're sold out at Christmas and there's just one room left for New Year," he says.

Others diversified. In Cumbria, mountain bikes replaced hiking boots in many hotels, proving a life-saver for the isolated Wasdale Head Inn, which also managed to save some bookings by linking up with the Outward Bound centre at Eskdale. A new boardroom and the spa at Holbeck Ghyll helped Nicholson, while at the Arundell Arms, famed for its fishing, Voss-Bark promoted the three-AA-rosette kitchen and the hotel's conference facilities while retaining some fishing business by renting rights elsewhere.

Others preferred to rely on reputation to bring people back. Cunliffe, who expects business at Gilpin Lodge to be 40% down on 2000, says: "We decided that if people weren't going to come, then price cuts and marketing wouldn't persuade them."

Judy Fry at the renowned Britannia Inn at Elterwater, Cumbria, took a similar tack: "We didn't do any extra marketing or discounting. People who had a sound business before the outbreak generally still have a sound business. We're probably down 20% on an average year, but I just want to put it all behind us now."

Everyone has been forced to make savings. Surprisingly few operators made staff redundant, and most kept open if possible, but there were no new recruits and no pay rises. At Gidleigh Park, Henderson, who is resigned to losses of about £200,000, saved thousands by undertaking only essential maintenance and buying high-turnover wines, while he helped cash-flow with an ingenious marketing plan. "I've closed the hotel for 24 days in March 2002 for a house party for my 400 best clients," he says. "I offered them a 25% discount on dinner bed and breakfast providing they prepaid by the end of May. That gave us interest-free finance of £87,000."

But the prize for creativity goes to Walmsley at Cumbria's Old Dungeon Ghyll hotel, who resorted to the oldest promotional tool in the book - smoke signals. "We lit the fires to say we were open, and as soon as the smoke came through the chimneys 15 people walked in."

The work of the BHA

Despite the beginnings of recovery, there is still overwhelming anger at how foot-and-mouth was handled at Government level.

The British Hospitality Association (BHA) has been part of the Rural Task Force, the body set up in March to advise the Government throughout the crisis. The BHA's deputy chief executive, Martin Couchman, says: "We pushed for the tax moratorium, for banks to be helpful, for paths to be opened as soon as possible, and for extra funds for tourist boards. The issues now are how to market the countryside in the long-term and how to deal with the tax deferral." An estimated £200m in unpaid tax must, in theory, be repaid by the end of March 2002, but Couchman doubts whether every operator will be able to meet that deadline.

"We also pushed the message that foot-and-mouth damaged tourism as much as agriculture, but the compensation was vastly different - about £100m for tourism and £1b-plus for agriculture."

Couchman says the Government is aware of the impact on tourism caused by images of burning carcasses, and the impact of the blanket closure of footpaths. South West Tourism has linked up with the Regional Development Agency and the National Farmers' Union to ensure minimal closure in future.

Recouping the losses

Since 11 September, the estimated losses to tourism from foot-and-mouth have been combined with losses from the attacks in New York to give a figure of £2.5b.

Regionally, tourism revenue in Devon and the South-west is down about 5%, or between £200m and £300m; in the Scottish Borders about 20%; and in Cumbria figures are yet to be collated, though revenue slumped by 60% at the height of the crisis.

However, it is expected that up to a million British holiday-makers who would have gone abroad will stay in the UK in 2002 in the wake of 11 September, and national and regional promotional campaigns should help, too.

The British Tourist Authority (BTA) is preparing a £5m campaign under the working title of "Come to Britain". Scheduled to run from January to March, it is funded by a share of the £14m of Government money allocated to promote the country in the wake of foot-and-mouth and will target Germany, France, Belgium, Ireland, the Netherlands, Canada and the USA. The message will be one of reassurance, says the BTA, and will emphasise heritage, the countryside, cities and sport.

Regional tourist boards have run their own campaigns, but the crisis has highlighted the need for a unified marketing body for England, says the British Hospitality Association's Martin Couchman.

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