The Lake District economy is bracing itself for a double hit from the coronavirus outbreak and a new post-Brexit immigration system.

While tourism businesses have already reported a slump in the number of visitors from China due to travel restrictions, alarm has been raised over new immigration rules that could deliver a “serious blow” to the county’s £3 billion tourism industry.

China overtook Japan as the Lake District’s biggest overseas tourist market a number of years ago and it is estimated that around eight per cent of Cumbria’s £3bn annual tourist spends comes from Chinese visitors.

Cumbria’s most popular tourist attraction has already reported a slump in numbers. Windermere Lake Cruises estimates around eight per cent of its 1.63m visitors each year are from China.

Its sales and marketing director Jennifer Cormack, who is also chair of the English Lake District China Forum, said: “We saw the effects of it as soon as it was announced after the Chinese New Year.

“Soon after that we started to get some cancellations and since then we have seen it dramatically drop. At this time of year we do see a lot of Chinese visitors, both groups and independent travellers.”

Mrs Cormack said that while it was still too early to quantify the drop in independent travellers, the number of coach parties from China was definitely down.

“The first week in February we usually have 150 coaches in the coach park – we had 50 this month,” she said.

“To lose that extra business is quite noticeable.”

Windermere Lake Cruises is using Chinese social media platform Weibo to communicate with customers, with Mrs Cormack saying travellers were still intending to visit when they are able to travel again.

However, she warned: “If this goes on through the year it is going to have an impact, not only on us as a business, but the entire region.”

James Tasker said his business, the Lamplighter Dining Rooms in Windermere, was not feeling the effects as yet but was worried about the future.

“Twelve per cent of our visitors last year were Chinese,” he said.

“However, they tend to book more heavily from May to November and have lead-in times of eight weeks max. If we are having this conversation again in May then it will be worrying.”

The sentiment was echoed by chair of the Lake District Hotels Association, Joe Cobb, who said numbers were considerably down for a number local businesses during Chinese New Year.

“The biggest concern however is forward bookings, with some Chinese nationals still banned from travelling through mass groups,” he added

Westmorland and Lonsdale MP, Tim Farron, said the increasing popularity of the Lake District left him in “no doubt that a short-term drop in the number of Chinese visitors will serve as nothing more than a bump in the road”.

Meanwhile, Rob Johnston, Cumbria Chamber of Commerce chief executive, said the effects of the coronavirus outbreak were spreading beyond tourism, with companies that import from China seeing disruption to shipments and exporters suffering from weak demand from Chinese consumers.

“But the disruption will be much more severe if there is a major outbreak in the UK, which is why businesses should be assessing the risks and making plans now,” he said.

The organisation has produced an online toolkit to help businesses prepare for a coronavirus pandemic.

Mr Johnston added: “We’re telling businesses to do a risk assessment, look at their supply chains, identify vulnerabilities if supplies are interrupted and make contingency plans. Businesses also need to consider cash flow if there’s a risk that their business model will be disrupted.”

Coronavirus is not the only serious headache facing the Lake District’s economy.

This week the Government unveiled its new post-Brexit immigration policy for when freedom of movement ends.

Its new ‘firm and fair’ system includes a wage threshold of £25,600 for overseas workers wanting to stay in the UK longer term, but does not include a visa option for low-skilled migrant workers after Brexit.

The Government said employers “will need to adjust” to rules that breaks the economy’s “reliance on cheap labour from Europe”.

Employers will have until January 1, 2021 to adhere to the new rules and ensure their staff have a right to work in the UK.

Mr Johnston said the changes “pose a serious challenge” for businesses that rely heavily on migrant workers.

While it is estimated that around a third of Cumbria’s 65,000-strong tourism workforce are from overseas, more than half of workers in the Lake District come from the EU.

And the new wage threshold has long been a sticking point given the average wage for a hospitality role in Cumbria is £17,000.

With South Lakeland and Eden having some of the lowest levels of unemployment in the UK, and not enough young people entering the jobs market to replace those retiring, the region, he believes the region is “facing a perfect storm”.

“We’re not scaremongering,” said Mr Johnston.

“Hotels have told us they might close if they’re no longer able to recruit migrant workers. It’s likely that some will convert to self-catering accommodation or aparthotels, which need fewer staff.

“There will be a knock-on effect on other sectors. In a tight labour market, everyone is fishing in the same pool for staff. Even businesses that don’t employ migrants themselves will find it harder to recruit.”

Cumbria Tourism – which has around 2,500 members – described the new immigration as a “serious blow” to the industry.

Its president Eric Robson said: “European workers are an important asset and we’re calling on the Government to rethink this flawed policy, which will severely restrict our industry’s ability to attract and retain the staff they need to not only to fill job roles but also to deliver world class customer service.

“From the start, we have been calling for ‘special case’ recognition for rural areas like Cumbria which face unique recruitment challenges. Disappointingly, these proposals fail to recognise the specific needs of our visitor economy.”

Mr Robson vowed to keep pressing the Government and lobbying local MPs to “urgently address” the situation.

Local MP, Mr Farron is already on side. He accused the Government of unleashing a “wrecking ball” on the Lake District hospitality industry.