Investment
Confidence is running high

Investing in your business can seem a daunting prospect when times are tough. It appears, however, that most of Norfolk’s tourism firms are acting optimistically — though some are feeling the squeeze thanks to the banks.

When the economy is in difficulty, it can be tough for businesses to know whether to invest for the future or try to steady themselves and weather the storm. The results of the Larking Gowen Norfolk Tourism Survey provide an interesting insight into their thinking on this issue.


Tourism is a really important sector for the Norfolk economy, and it is one that has helped us weather the economic downturn


The businesses’ responses regarding turnover give a snapshot of current confidence levels in the industry. According to 62pc of those who participated in the survey, turnover had increased within the past 12 months, with 21pc saying it had stayed the same and only 17pc saying it had decreased. Meanwhile, 47pc said they expected turnover to grow in the next 12 months and 40pc thought it would stay the same, with only 13pc expecting a drop in turnover.

And as well as the amount of cash coming in, there remains a healthy attitude towards investing money back into the business. In all, 77pc had increased the amount of money they had invested in their businesses in 2009.

“That is excellent news for the tourism industry in Norfolk,” says Michael Timewell, head of Norfolk Tourism. “It shows that they have confidence in their product and in their marketplace, and the county as a whole. To me that is great news for the future.”

Chris Starkie, chief executive of Shaping Norfolk’s Future, shares his confidence in the sector. He said that 2009 was “undoubtedly a good year for tourism, with a combination of factors such as the weak pound and increased appetite for holidaying at home, thanks in part to the EDP’s Holiday Here campaign, which meant that businesses across the county saw, on average, an increase of between 10pc and 20pc.

“The signs are that 2010 could well exceed those figures. Tourism is a really important sector for the Norfolk economy, and it is one that has helped us to weather the economic downturn.”

Many of the respondents’ comments are encouraging, speaking of a need “to remain competitive”, and that “we have a policy to reinvest and don’t see the economic climate as a reason to move away from this”.

But others warn that the banks’ changes of policy have created a trickier working environment. The survey shows that 26pc of businesses had found it harder to obtain funding, loans or overdrafts from banks in the previous year, although 29pc said they had found it no harder.

Just over 60pc of businesses surveyed said that their bank charges had stayed the same as they had been in the previous year, while 33pc said they had increased.

To quote one respondent: “Higher bank lending rates have stopped further development. Also the uncertainty in the economy has been a large factor — not much faith in growth whilst there are still high levels of unemployment and no prospect of serious recovery in the economy.”