Chief Operating Officer of Merlin Entertainments said that the period of “revenge” spending after Covid has ended and businesses now have to find new ways to attract clients.
The phrase revenge-spending describes how people spent the money they saved during the Covid pandemic to buy products or experiences to make up for the time lost due to lockdowns.
Fiona Eastwood is the COO at Merlin Entertainments. The company owns Alton Towers and Legoland, as well as the London Eye. She said that spending habits had changed since last summer and they had had to change some of their tactics to continue attracting customers.
She said that revenge spending has been eliminated.
We saw it from August of last year with the impact on people’s pockets. And we had to pivot. This is true for both domestic and inbound trade and in pretty much all markets.
Eastwood stated that his company, which has 140 attractions in over 20 countries, was forced to “pivot”, from the work it had been doing since leaving Covid. This meant putting more emphasis on promotions with food brands and newspapers, as well as increasing its focus on season passes.
She said that the company is seeing “green sprouts of recovery”, and has spent £90m on capital investments this year in its UK businesses. This includes 29 attractions.
Eastwood made his comments at UKHospitality’s summer conference where the trade group called on the government to lower VAT for the industry from 20% to 12.5%.
UKHospitality stated that this would bring the VAT in the UK in line with other countries and create 85,000 jobs, adding £3.2bn in the sector.
In April 2022, the VAT rate on tourism and hospitality will be reduced to 12.5% from 5% to help businesses reopen after lockdowns.
Brian Keeley Whiting, managing director of WH Pubs said that a reduction in VAT would be the first thing he’d ask any incoming government.
Keeley Whiting, owner of four gastropubs in Sussex and Kent said that the current level is “really wrong”, and that pubs are competing with supermarkets who do not face the same challenges.
Philip Thorley of Thorley Taverns, which owns 18 pubs in Kent, said, “We pay the most VAT in Europe. We should have a case in favour of hospitality in the UK, because we employ many people, including those at the entry-level, and we are squeezed in every way.”
According to the latest UKHospitality statistics, between 2021-2023, 22 859 businesses in UK hospitality closed while 11 734 opened.
Eastwood, a UKHospitality member and also an energy expert, explained: “There are three costs to consider: the cost for labour, the cost for energy, and the cost associated with VAT.” We saw a huge boost in business when we cut the VAT by half during Covid.
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