Drowning in plain sight

Oh, we don’t like to be beside the seaside. It wasn’t always like this, coastal towns used to thrive on hoards of tourists flocking to the beach to lick ice creams, feed chips to seagulls, have fun playing on the pier and paddle in the channel.

But in the 1960s the rising popularity of relatively exotic package holidays to sunny Europe, coupled with cost-cutting by British Rail which closed some rail routes to the seaside, saw tourist numbers fade and the trend never stopped. 

For all the topical talk of staycations, decades of decline in visitor numbers and subsequent lack of investment have left many coastal towns in a depressing state, in stark contrast to the jubilant images of yesteryear. With the odd exception, the vast majority are now drowning in plain sight.

As a result of the decline, hospitality operators took a battering and they continue to do so. Sunny days can still deliver spikes, but according to CGA’s Market Growth Monitor there have been “significant declines” in eating and drinking outlets in coastal towns in the last five years alone.

Famous names like Eastbourne (down 12.2%), Torquay (down 12.9%), Newquay (down 11.5%) and Morecambe (the worst hit, down 22.8%) are just a few examples that are way ahead of the national average of 5.6%. 

“We have seen some significant economic challenges in our coastal communities and the decline of pubs, bars and restaurants in these locations demonstrates this clearly,” says CGA’s business unit director for retail and food, Karl Chessell. 

And if the lack of tourists started the problems, he adds that today “many young people have left these communities for studies or employment and the key consumers groups that now live in these towns do not spend regularly in the out of home sector.”

In April, the House of Lords published a report into the situation entitled ‘The future of seaside towns’, which explored their demise and outlined potential plans to regenerate them. In terms of the causes, like everyone else it lamented the fall in domestic tourism as the big one.

But today there are others, including “declining and ageing populations, over dependence on seasonal, low-paid jobs in a small range of industries, housing stock challenges, poor transport connectivity and a “range of physical and environmental challenges”.

It also said “fishing, shipbuilding and port activities have all been in long term decline. What makes these areas distinct is the combination of industrial decline and geography. Their location on the periphery of the country places them on the periphery of the economy, bringing consequential social problems.”

The report also noted “high rates of drug and alcohol abuse, poor mental health, and additional pressures on local services from both an ageing population, and from the high levels of population transience.”

And it added the “most deprived neighbourhood in England” is Clacton on Sea. Five of the ten local authorities in the UK with the lowest average employee pay are in coastal communities. 

These depressed areas are actually making people clinically depressed, with the report highlighting a 2017 study which found that “doctors in deprived coastal towns in the north and east of England were prescribing almost twice as many antidepressants as those in the rest of the country.”

So maybe it’s no surprise they aren’t all piling into Turtle Bay and ordering cocktails. And hospitality can’t fix these deeply embedded issues alone. But the sector could be central to any successful town revival, and the government could certainly help by reducing VAT on tourism-related activities.

It’s a common tactic across the EU, according to Merlin Entertainments, which told the report that out of 36 European countries, the UK is “one of three without a reduced rate of tax on tourist activities. UK hospitality is already at a distinct disadvantage to its European counterparts in attracting tourism, even before Brexit.”

More specifically, a cut to VAT on food served in pubs and restaurants would give a double boost to a depressed town by generating jobs as well as sales. Brigid Simmonds, who was BBPA CEO at the time, told a House of Commons Culture, Media and Sport select committee that while the “cost of cutting VAT on food would be greater to the Treasury, the job creation would probably be greater as a result, because you would need more people in a pub to work there if you have more customers.”

The fundamental importance of hospitality to any regeneration project is summed up by a seaside town revival taking place in the Victoria Quarter, in New Brighton on the Wirral. It typifies the widespread decline of coastal towns up and down the UK, it was a popular seaside town until the 1960s when, like so many others, it started to struggle.

In late 2018, Daniel Davies founded Rockpoint Leisure in order to kickstart a project to revive it. The long-term New Brighton resident (and if it carries on the way it’s going, soon to be local hero) has already opened a pub named after the man who originally built New Brighton called The James Atherton (it’s received a £390k investment from Punch), a craft beer, wines and spirit bar called Homebrew Tap, and a Middle Eastern and North African restaurant called Hibibi. And there are plans for more.

In October, Davies told the Liverpool Echo: “We used to have the tallest building in Britain (the New Brighton Tower) and the biggest open baths in the world. We had 11 theatres and two piers. This area was brilliant, but now it’s all gone. It’s that spirit we’re trying to recapture.”

In comprehensive and authoritative written evidence to the future of seaside towns report, he was clear there is a lot more to address than hospitality when it comes to reviving a town, but he was equally clear to emphasise the “fundamental importance of the hospitality industry” to the regeneration process, saying the “anchor to the project in Victoria Road is undoubtedly the hospitality and licensed industry.” 

He also said “many elements of the project can be analysed and used as a model of seaside regeneration. And although it is too early to say what the final outcome will be, the early signs are very good.”

The integral nature of the role hospitality will play in any regeneration of any depressed town, coastal or otherwise, is why the report also calls for the hospitality sector to be “championed and transformed into a rewarding and highly-respected career path”.

It’s acknowledged there is already a talent shortage in the recruitment pipeline for the hospitality industry and Brexit stands to exacerbate it, because hospitality is famously reliant on migrant workers.

According to Mike Shipley, analytics & insight solutions director at Fourth, 42% of workers in the restaurant, fast food, hotel and pub sectors are from the EU and 10% come from the rest of the world.

The numbers are even higher for QSR, with 54.5% from the EU and 10.5% from the rest of the world.

If, as expected, Brexit does see these numbers drop, for reasons ranging from a reduced salary caused by a fall in sterling to a general sense of migrants feeling unwelcome due to unpleasant or ignorant attitudes towards them, that won’t be of any help to any towns or cities in the UK, let alone the struggling coastal ones.

And attracting talent is just one part of the puzzle anyway. “To make this work, business leaders are telling us it needs a co-ordinated effort that includes major operators, independents, a night time economy, retail and transport,” says Chessell.

Or, as the report concluded, “coastal communities have told us that boosting the local tourism economy in their areas relies on solving a range of complex and often interconnected issues. For example, a dilapidated public realm, and the social challenges often associated with deprivation, will not only deter visitors but also limit the chances of securing the investment needed to support and develop tourist activity and encourage businesses such as hotels and restaurants to base their activity in that area.”

To this end it urged the government to undertake “further research into the potential impact of cutting VAT on tourism-related activities” in struggling coastal towns.

The government responded in June, saying a VAT reduction to tourism related services had been “estimated to cost the Exchequer approximately £10bn in the first year and this must be balanced by increased borrowing, reduced public spending or increased taxation elsewhere. In light of the fiscal implications of a UK wide reform, the government will not be making a change to VAT and tourism at this time.”

Nearly six months on, the situation appears to be the same (the pre-election period of political purdah means an HMRC spokeswoman has to say no comment). And admittedly the government is currently sidelined by some sizeable challenges. But that doesn’t help those struggling seaside towns now sinking fast.