Environmental responsibility

With economic headwinds set to send a chill through the country well into 2023, rural businesses will need to be as creative as ever to maximise opportunities from the tourism and leisure sector. Energy costs for businesses and disposable income challenges for consumers will weigh heavily on diversification decisions. Despite this, or perhaps because of this, the overall rural tourism and leisure themes of wellness, experience and sustainability remain true. For rural businesses looking to navigate the difficult times ahead, understanding the overlap between these trends could be the source of inspiration for new business ideas.

In this publication, we look at Savills updated Rural Vibrancy Index and show how large tourist attractions are tackling sustainable transport; simultaneously reducing their Scope 3 (see Greening your business) carbon emissions, while making it easier and cheaper for visitors to get to them. We also provide some insight on the overlap between wellness, experience and sustainability, and the cost of living crisis. We highlight the bicycle to give rural businesses some inspiration for low-cost, high-enjoyment ideas to welcome visitors to the countryside.

Is sustainability still important?

Covid has produced a dramatic shift in how we work, travel, and entertain ourselves. While some indicators have returned to pre-pandemic levels such as cars on UK roads, others have not. Recent estimates from the Office of National Statistics indicate a 27% reduction in the number of UK residents travelling overseas in May 2022 compared to May 2019. These behaviours are exactly what regulators were trying to nudge society towards in order for us to meet our collective net-zero targets.

While the recent change in political leadership at Westminster signals a change in environmental focus, net zero remains a primary goal. More importantly, the sustainability of fossil fuel consumption has been thrown centre stage by the ongoing energy crisis. Short-term reliefs may be welcome, but undoubtedly the energy crisis will be the ultimate accelerator of the sustainable fuel shift, from walking and cycling more to electrifying transport and the adoption of small-scale renewable self-sufficiency.

Sustainability continues to be a growing trend within the tourism sector. Consumers increasingly believe acting in an environmentally responsible way is the right thing to do and are actively choosing brands that match their ideals. Booking.com’s annual sustainable travel report revealed that 71% of UK travellers confirm that sustainable travel is important to them (a 10% increase on 2021). A third say they have stayed in sustainable accommodation over the past year and 62% intend to do so at least once in the coming year. The research indicated an increasing desire to make more conscious choices across the entire travel experience, from transportation to accommodation. Some 23% of respondents said they chose to travel to a destination closer to home in order to reduce their carbon footprint, and 14% said they had researched public transport or options to rent a bicycle at their chosen destination.

As consumer interest in sustainable travel choices increases, so do the opportunities for rural tourism and leisure. Businesses that identify hotspots in their carbon emissions and make appropriate changes are consequently more likely to prosper and attract more business.

Rising cost of living

Understanding how consumers feel about rising costs of living with regards to travel and leisure will be vital in helping rural businesses with diversified enterprises survive and be successful over the coming years. Recent research from Visit Britain indicates 76% of UK adults think “the worst is still to come” with the top three barriers to taking a UK overnight trip in the next six months from August 2022 being the rising cost of living, the cost of fuel and personal finances. Interestingly, with regards to day trips, 32% of UK adults say that they will “look for more free things to do” on their day trips.

What is the Rural Vibrancy Index?

Trend tracker for rural tourism and leisure

The Savills Rural Vibrancy Index (RVI) tracks some of the key influences on farm tourism and leisure trends and aims to give a comparative indication of the strength of the rural tourism and leisure sector over time.

The RVI combines a wide range of indicators into three separate categories: farm business drivers, economic indicators, and diversified enterprise performance results. The vibrancy of the sector is represented as standardised values indexed relative to the year 2011 (2011=100).

Looking back

Strong recoveries from the Economic Base and Farm Drivers indices saw the RVI (weighted index) grow by 7% between 2020 and 2021l exceeding its peak during 2019 (see chart, below).

Although the rate of growth in the Diversified index between 2020 and 2021 was not as strong as previous years at 1%, this follows a resilience through 2020 that was not seen in the other categories represented in the RVI.

Looking ahead

Current data and activity for 2022 suggests the Economic Base index will decline with notable downward pressure from the poorly performing UK pound. The Farm Drivers index will experience a mixture of influences, with increased input costs being partly offset by increased prices in some sectors, such as arable and dairy.

A notably dry and sunny summer will have supported certain farming sectors, as well as many diversified rural businesses. However, it remains to be seen how the cost of living crisis has impacted consumer spending habits across those diversified enterprises.

We expect the overall RVI to be steady in 2022, but the outlook for 2023 is challenging. Rises in fuel, energy, and food costs will undoubtedly have a knock-on effect on levels of disposable income for consumers.

Opportunities in rural tourism and leisure will therefore be centred around those that cater to the demand for sustainability, well-being and experiences, while simultaneously providing value for money to the consumer.

Staycations are likely to enjoy continued favour with holidaymakers, while midweek-weddings are rising in popularity. In addition, sustainable transport, such as cycling, will rise in prominence.

_{Read the articles within Spotlight: Rural Tourism and Leisure below.}