Volcanic ash could boost ‘staycations’

Thursday 13th May 2010
Volcanic ash cast a cloud over the travel plans of thousands, but it may offer a silver lining to Norfolk’s hotel industry.

A survey of clients by accountants and business advisers PKF revealed that, in spite of the latest figures showing the county’s hotels were under-used in March, there was still an upbeat feeling among many that the growing “staycation” culture would boost their summer trade.

“The disruption to air travel because of the volcano, the continuing high cost of holidaying abroad, and the troubles in places like Greece are clearly making more people think about holidaying nearer home,” said Michael Muskett, PKF’s Senior Partner.

“The county’s hotel occupancy rates were among the lowest in the country in March, but I think that may relate more to Norwich where there is a high level of hotels. Away from the city, the picture remains an optimistic one and the volcanic ash seems to have had only a swings and roundabouts impact on business trade.

“It’s an ill-wind, even from Iceland, that blows nobody good,” said Paul Garrod, at Great Yarmouth’s Furzedown Hotel.

“The ash did mean we lost some business from people working offshore or travelling from Aberdeen, but many turned up later so it was only short-term. I think the whole experience and problems with the euro will put more people off holidays abroad and we are expecting a good summer. We have confidence in Great Yarmouth and have just invested in a 150-seat function room and more self -contained conference rooms.”

Nick Mobbs, director at the Imperial Hotel in Yarmouth, said: “The volcano meant one small conference was cancelled and we lost seven people who would have stayed the week. But we gained other people who were stranded here so one thing mitigated the other. It may persuade more people to stay in this country rather than holiday abroad, but I think that will be more about the euro and its strength against the pound.”

Bob Scott, manager of the Prom Hotel in Yarmouth, said the ash cloud had lost them some trade, mainly from offshore workers. “But other guests were stranded here, including an Indonesian family who had to stay 5-6 extra days waiting to get a flight home, so it balanced up. The ash may affect the way people think about travelling, but we were expecting a very busy summer anyway as it is very good value for money and people have other issues like our struggling economy, the euro, the troubles in Greece and the hassle at airports.”

Figures for March from PKF for hotels in regional UK, showed that room occupancy was up 6.1% to 67.4%, compared to the same time last year. But the average room rate for regional hotels continued to suffer, dropping 6.1% to £61.57.

In the Norwich area, however, hotel room occupancy was down 3.7% to 58.4%, one of the lowest figures in the country. Average achieved room rate was down 2.6% to £63.50 and rooms yield was down 6.2% to £37.08.

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