This year, restrictions on travel have meant most British people have opted to stay within the UK for their holidays, resulting in an exponential rise in ‘staycations’.
Richard Bearman is Managing Director of Start Up Loans, a government-backed programme launched in 2012 to provide loans to early stage businesses throughout the UK who might otherwise have struggled to secure backing from high street lenders. As we reach the peak of the UK summer holidays and many opt for staycations over trips abroad, Richard reflects on the opportunities this presents for British start-ups.
This year, restrictions on travel have meant most British people have opted to stay within the UK for their holidays, resulting in an exponential rise in ‘staycations’. This ‘staycation boom’ has already made its mark on the UK economy, be that house prices in seaside hotspots, high demand for holiday cottages or an overall uptick in consumer spending.
Airbnb active listings were up in key seaside locations this year: in April, they were up by 43% in Great Yarmouth and up by 34% in Scarborough compared to 2020. Similarly, Awaze, the UK’s largest holiday cottage operator, has reported double digit price increases on their cottages, particularly for bookings in the summer. And Rightmove have noted a 50% increase in asking prices for beach huts – which are now on sale for £39,392 on average, up from £25,999 last year.
But the impact of staycations is not limited to property and hospitality; small businesses across the country are also feeling its effects as UK holiday destinations see an influx in consumer spending, particularly in the services sector.
This fresh wave of consumer activity has come as a welcome relief to small businesses, many of whom have had to put some operations on hold due to lockdowns over the past year and have now re-opened to more business than ever before. I’m delighted to see this growth in the UK small business landscape and to see tourists choosing to invest in start-ups when they visit holiday destinations.
I’d like to share with you the stories of two inspiring business owners who launched their businesses with our Government-backed Start Up Loans of up to £25,000 and were impacted by lockdown restrictions, but are now benefitting from our new holidaying habits.
James Talbot, Co-Founder of Pobi Bakery, Oxfordshire
James Talbot and Jake Jones, both 25 and from Whitney in Oxfordshire, set up their baking business in March 2020 using a Start Up Loan of £20,000.
Starting out by baking bread in their kitchen at home, their business snowballed and they were quickly able to open a café in their own in their hometown of Oxford. While they were forced to close for periods of lockdown due to restrictions, the café is now open and bustling, and the pair are enjoying meeting new customers who’ve taken an interest in the area this year.
“It’s been a really interesting time for the bakery. Oxfordshire and the Cotswolds receive lots of international tourism, which has been significantly impacted this year. However, we have instead seen an influx of people visiting families in the area, which they might not have done so much if the French Riviera had been calling!
“We have also seen many people with second homes making Oxfordshire their base, since they are no longer going into the city. Similarly, we’ve had a few customers who are looking to purchase new homes in the area.”
Anthony Quinn, Founder of The Pudding Pantry, Nottingham
Anthony, 33, took out a Start Up Loan of £10,000 in 2013 through delivery partner First Enterprise, to launch The Pudding Pantry – a dessert-inspired brunch restaurant in the heart of Nottingham.
Having overcome the challenge of setting up an outdoor space in April, Anthony is now enjoying inviting people through the doors of his restaurant again and has seen an uptick in customers.
“We have of course noticed significant growth now that lockdown has eased, which we expect will continue into the summer. In addition, the VAT rate is currently at 5% for food businesses, which has been a fantastic boost for revenue over the past 12 months. Our plan is to grow sustainably, so we will focus on making the most of strong customer activity, while ensuring each customer receives the best possible service.”
For anyone who is considering starting up a business now that restrictions are easing, I wanted to remind you of the tools that Start Up Loans can offer you if you choose to partner with us, as we know that consumer spending trends are not the only factor in helping businesses thrive.
We offer a pre-loan support and mentoring package to all our customers as they bring their business ideas to life. We’ve created a series of guides on important areas of business including social media, marketing and Search Engine Optimisation (SEO). The guides, which can be downloaded free of charge from the Start Up Loans website, are designed to ensure business owners of all stripes have the resources they need to build and grow a successful business.
Further to this, we recently partnered with the Open University to provide a range of free business learning online courses that can be accessed by visiting our website.