East Anglia’s tourism sector still standing, but resilience is being stretched, new survey warns

Tourism,
leisure and hospitality businesses across Norfolk, Suffolk and Essex remain
operational, innovative and determined, but are now operating under structural
pressure rather than short‑term disruption, according to the Tourism Business
Survey 2026 from Larking Gowen, the region’s leading advisers to the visitor
economy.

The
findings reveal a sector that continues to attract visitors and grow turnover,
yet is increasingly constrained by rising employment costs, taxation, business
rates and regulatory change. Many businesses describe trading conditions as a
“slow squeeze”, where resilience is maintained through endurance rather than
recovery.

While around
60% of respondents reported increased turnover in 2025, margins are being
eroded, with 40% expecting lower profitability, highlighting a growing
disconnect between demand and sustainability.

Chris
Scargill, Tourism, Leisure and Hospitality Partner at Larking Gowen, said: “Tourism
businesses in East Anglia are still trading, still investing and still
delivering exceptional experiences, but the nature of resilience has changed.
This is no longer about bouncing back from a single shock. It’s about absorbing
a permanent reset in costs, policy pressure and customer behaviour. Hospitality
is resilient, but it is not invincible. Without greater stability, clarity and
proportionate policy, even well‑run businesses will struggle to sustain
themselves long‑term.”

Now in
its 20th year, the Tourism Business Survey draws insight from visitor
attractions, hotels, pubs, restaurants, holiday parks, cultural venues and
retail businesses, making it one of the longest‑running and most trusted
barometers of the East Anglian visitor economy.

Costs
rising faster than confidence

Staffing
remains the defining challenge. Nearly 80% of businesses reported increased
wage costs, driven by National Living Wage changes and compressed pay
differentials. Almost a quarter reduced staff numbers during 2025, while many
more are considering further reductions, shorter hours or operational
compromises to remain viable.

Business
rates and taxation are now seen as existential issues. Future government tax
changes, the state of the UK economy, energy costs and National Insurance are
all cited as major concerns. Many respondents warned that rising rates
liabilities, the return of full rates relief and uncertainty around VAT and
proposed overnight visitor levies risk accelerating closures, particularly in
the mid‑market, where businesses are neither budget nor luxury.

Experience
still wins, but only with investment

Despite
the pressure, optimism has not disappeared with around 43% of businesses expect
increased profits in 2026, albeit modest and nearly half are increasing spend
on marketing, technology and customer experience.  The survey highlights a clear shift toward
experience‑led differentiation, with businesses investing in service quality,
brand identity, digital capability and memorable guest experiences as the
primary route to competitiveness in a crowded and cautious market.

Sector
voices:

Iain
Wilson, owner of Byfords, The Pigs and several of Norfolk’s best‑known
hospitality businesses, said: “If you’re not reinvesting, you’re going
backwards. Costs have reset permanently and busy no longer means profitable.
People may go out less often, but when they do, they want something memorable.
That means being absolutely clear about who you’re for, investing in experience
and having the courage to stop doing what no longer works.”

Samantha
Prince, Deputy Director at the Food Museum in Stowmarket, added: “Museums and
attractions can no longer rely on collections alone. We have to be confident
brands, agile businesses and meaningful community spaces at the same time.
Relevance and not just nostalgia, is what now keeps the doors open.”

Brian
Keane, hospitality operator and investor, said: “The cost base has shifted
permanently. Payroll, compliance and energy are not coming back down. The
winners will be those who use technology to protect margins while redeploying
people where they genuinely add value to the guest experience. Doing nothing is
now the biggest risk.”

Nick
Steven-Jones, Chief Executive, Jarrolds, “Retail is no longer competing just
with other shops, it’s competing with weekends away, cafés, culture and
experiences. Destinations that combine hospitality, retail and tourism will
outperform those that don’t. If people are going to leave the house, the
experience has to justify the time, as well as the spend.”

A
warning and a call for stability

While
businesses continue to adapt, the survey warns of a longer‑term risk: not fewer
visitors, but fewer viable and distinctive businesses in five years’ time. Respondents
were clear that they are not asking for rescue, but for stability, clarity and
realistic policy that reflects how tourism and hospitality actually operate,
particularly in labour‑intensive, seasonal and place‑based economies such as
East Anglia.

Jo
Burton, Tourism Director at Larking Gowen, said: “The visitor economy remains
one of East Anglia’s most important drivers of jobs, identity and local pride.
But resilience has limits. Without proportionate support and policy certainty,
even the most committed operators will be forced into defensive decisions that
hold back growth, investment and opportunity.”

You
can read the full results report brochure here.