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BRI Business Recovery and Insolvency

We are an independent company of insolvency practitioners committed to finding the right solutions for businesses and individuals in financial difficulty

Recent Closures Highlight Challenges for Tourism Sector

Recent Closures Highlight Challenges for Tourism Sector

27 November 2015:  Alan Limb, from BRI's Southampton Office, considers the recent closure of three established tourist attractions on the Isle of Wight.

The end of the Summer Season on the Isle of Wight in October this year brought the closure of three established, animal related tourist attractions. Colemans Farm Park near Newport offered a petting farm, tractor rides and play barns. Seaview Wildlife Encounter operated for 44 years as a zoo specialising in non-native species of birds and mammals (particularly penguins and flamingos). The Isle of Wight Aquarium traded for 31 years as an indoor attraction at Fort Victoria, near Yarmouth and focussed on native marine fish and invertebrates.

None of the closures occurred as a result of Insolvency so the businesses have been able to work with the relevant authorities to put orderly plans in place for the rehousing of animals. In announcing the closure of each business, some of the reasons given by the owners were specific to their situation. For example at Seaview, the challenge of managing succession in a family business was mentioned. However, there were some common themes which could apply to all businesses that target tourists:

  • the impact on cashflow of changes in legislation. Stricter controls have been introduced on all animal related tourist attractions. Additionally, the businesses have been affected by rising employee costs from automatic enrolment for pensions, the increased National Minimum Wage and the forthcoming National Living Wage;
  • increased competition generally from new entrants to the market as other tourist attractions have opened locally. As a result, visitor numbers had declined or not increased in line with costs; and
  • the challenge of increased customer expectations as similar businesses opened elsewhere.  When the Aquarium opened it was a unique attraction. More recently, some visitors have found it smaller than expected as they were used to visiting larger, purpose built facilities elsewhere in the UK and abroad.

The management team at BRI has a wealth of experience in advising businesses in all sectors. If you or one of your clients operate in the tourism sector and are struggling as a result of the issues outlined above please contact us to explore the options available.