With changes to National Insurance, the National Living and Minimum Wages and tax arrangements coming into force this April, latest Cumbria Tourism research highlights full impact of rising costs on business viability and confidence.
Cumbria Tourism’s new Business Performance Survey, carried out in conjunction with chartered accountants Lamont Pridmore, analyses real-life data direct from tourism operators across the county and shines a light on the everyday challenges they have been facing over the last six months.
The findings underline the depth of concerns about upcoming changes first announced in last Autumn’s Budget; a staggering 98% described increasing wage costs as problematic, while 73% will be adversely affected by a reduction to the threshold for employers paying National Insurance contributions.
As a result, three quarters of Cumbria’s tourism businesses say they are expecting reduced profits, while 13% expect partial business closure and 14% are planning to sell up completely.
29% of businesses now say their biggest worry is costs, up from 11% just six months ago and up from fourth to first on their overall list of concerns.
At the same time a third of businesses report that staffing issues are affecting their future business viability (34%) – a concerning increase on 22% six months ago.
Managing Director of Cumbria Tourism, Gill Haigh, says: This really is a challenging and sobering set of results, with our latest Business Performance research revealing major concerns around costs, the economic climate and staffing.
“Cumbria’s visitor economy makes up 29% of the county’s total employment, supporting 46,000 full-time equivalent jobs and generating £4.7billion for our local economy, so it’s vital that we continue working together with the full range of public and private sector partners to support our vibrant economies for the benefit of local jobs and communities.
“The insights from this latest research will also play a crucial role in shaping Cumbria Tourism’s day-to-day activity to support Cumbria’s visitor economy, building on the momentum of our winter marketing campaign – which reached more than 440million people – with a high-profile ‘Let’s Go’ Spring campaign to help drive bookings as we move into Spring and Summer.”
Managing Director of Lamont Pridmore, Graham Lamont, comments: “The changes to payroll costs and the impact of the wider economic climate mean business owners should challenge and analyse their own financial models, taking measures to ensure their net profitability can be maintained, regardless of whether their aim is to continue trading or sell the business.
With the right support and expert advice from sector specialist accountants like Lamont Pridmore, businesses can develop robust financial strategies that can help them manage this change and achieve their goals.”