People who work in tourist hotspots are generally low paid

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Asian maid tidying up bed and cleaning luxury hotel room

The FINANCIAL — Those who work in tourist hotspots earn less on average than people who live there.

For example, as of April 2020, Cotswold residents earned 28.7% more than people who were employed in the area. There were similar differences between the earnings of residents and workers in other tourist areas such as Derbyshire Dales (27.5%) and Allerdale (24.5%).

This is comparable with areas of Outer London such as Bexley (29.0%) and Harrow (27.3%) that are subject to the “commuter effect”, where people who earn high incomes in the city centre live on the outskirts.

In tourist hotspots, workers earn less than residents because of the types of jobs in those areas, with hospitality being the largest employer.

The median hospitality salary for a full-time employee was £22,779 per year in April 2020, which was 28% lower than the national average of £31,461.

Hospitality workers were also the most likely to be furloughed during the pandemic. On average, between 23 March 2020 and 31 July 2021, more than half of employees in hospitality were furloughed.

As a result, tourist hotspots were among the areas with the highest average furlough rates during the pandemic.

South Lakeland and Eden in the Lake District recorded the highest monthly furlough rates of anywhere in the country, at 40% and 39% respectively in June 2020.

Furlough rates tended to be higher in tourist hotspots than elsewhere

Monthly average furlough rate in selected tourist hotspots compared with the range for all areas and the UK average, June 2020 to July 2021

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Young and low paid at greatest risk of being priced out

While house prices have been rising during the pandemic, many people have seen their income fall because of furlough, reduced hours or losing their job.

The poorest fifth of workers were more likely than the richest fifth to see a drop in income in the 12 months to March 2021 (42% compared with 31%), according to recent analysis.

Data from the Opinions and Lifestyle Survey (OPN) show that young people (aged under 30) have been more likely to report reduced income than those aged over 60, but less likely to do so than 30- to 59-year-olds.

However, young people remain worse off than other age groups in terms of their overall financial situation. A third (34%) of under 30s responding to the Survey on Living Conditions (SLC) had at least some difficulty making ends meet in the year to March 2021, the highest percentage of any age group.

This has implications for the industries that tourism economies rely on, such as hospitality which is reporting record levels of job vacancies.

Nearly a third of hospitality businesses were finding vacancies difficult to fill in late August 2021 (30%), amid reports of workers being priced out of buying or renting near their job.

We do not yet know the full impact of coronavirus on housing affordability. The most recent data cover April 2020, towards the beginning of the pandemic and before the subsequent rise in house prices.

The next housing affordability release (with data up to April 2021) is due to be published in spring 2022.

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