Holiday Season: Impact on Small Businesses and Local Economy

small business holiday season

Another holiday season is here with us, and Britons continue to be divided on whether to have a staycation (staying in the UK) or whether to travel abroad to enjoy their Summer holiday. In 2017, 59 million staycations were booked, up 6% compared to 2016 [1]. This year, more Britons are expected to spend their Summer holidays in the UK. Their decision is impacted by factors such as a growing awareness of local holiday destinations and warmer weather in the Summer months.

Top three reasons for staycations

According to Barclays [2] the three main reasons why Britons prefer to take their holidays in the UK include:

– Wanting to spend more time in the UK

– Staycations can be more affordable compared to travelling abroad

– Improvement in holiday destinations and activities in recent years

The top three types of holiday among Britons are a city break, a beach holiday, and countryside break. This presents an opportunity for small to medium businesses to market to customers who choose different types of holiday break.

Impact of Staycations on the Local Economy

The local economy can really benefit from staycations due to more money being spent within the UK, which helps economic growth. Some further benefits of staycations to the local economy are:

1. Creation of jobs

An increase in the rate of staycations leads to a rise in demand for services by domestic tourists. Local tourist destinations and hotels are forced to hire more personnel to meet the increasing demand for their services. The creation of jobs is essential and allows for a higher revenue which can be used to enhance development.

2. Growth of SMEs

The average spending on UK staycations in 2017 was £599. In 2018 this amount rose to £823, representing a 37% increase. In 2019, more people are expected to stay in the UK for their holidays. Consequently, the average spending is expected to increase even further, with SMEs being the biggest beneficiaries. This boost has made the tourism industry one of the most robust growth areas in the country with an increase in turnover. The rapid growth of the SMEs during staycations is essential for the stability of the UK economy.

3. Boosts the Tourism Industry

Since 2010, Britain’s tourism industry has been the fastest growing sector in the country in terms of employment [3]. Projections show that the industry will be worth over £257 billion by 2025. It’s expected to contribute about 10% of the nation’s GDP and be able to support 3.8 million jobs. These statistics illustrate the importance of staycation to the tourism industry. Britons spend a lot of money in foreign countries while on holiday. If that spending can be invested in the UK instead, it will provide that much needed boost to the economy and industry.

Impact of the Unpredictable Weather

One of the reasons that has led to an increase in staycations in the United Kingdom is warmer weather during Summer [4]. Unfortunately, in the UK we tend to experience quite unpredictable weather patterns, which threatens to hinder the growth of SMEs and local businesses in the country because it can lead to unexpected losses and employee redundancies. However, in 2019 other factors such as the Brexit debate and improvement in local holiday offerings will play a significant role in the increase of the number of citizens who will prefer to enjoy their Summer holiday on home soil.





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