Foot and mouth has claimed another victim - the Youth Hostels Association.

It's having to close 10 hostels after a dramatic decline in visitors during the height of the outbreak.

The YHA is expecting to lose �5m as a result of foot and mouth and also the fall in tourism after 11 September.

"This was a very hard decision to take, but a necessary one in the circumstances," says YHA chairman Chris Boulton.

Those closing include hostels in Buxton in the Peak District and Dufton in Cumbria.

Because the YHA owns these properties it can sell them to raise cash.

It could have been much worse. There had been speculation that more than double that number would have to close.

Blow softened

The YHA has 230 hostels in England and Wales. At the height of the foot and mouth crisis, occupancy levels fell by up to 50% in areas such as the Lake District and the Yorkshire Dales.

The YHA has 300,000 members

But member donations and government aid have helped soften the blow, as did the temporary shutting down of some hostels during the outbreak.

Andy and Niki Reynolds run the Malvern Hills Youth Hostel.

They were badly affected by foot and mouth, but luckily their hostel isn't facing closure.

"We lost a lot of business," says Andy. "In March last year we had 350 cancellations. But we survived.

Bookings up

"And even though the footpaths on the hills here were closed for a few months we managed to stay open."

Since then walkers have returned. And now, a year on, bookings are up on previous years.

HOSTEL FACTS

Annual membership is �13 for adults, �6.50 for children Overnight costs vary depending on location, size and facilities A night at Malvern Hills will cost �10.25 for adults and �7 for children

Andy and Niki started running the Malvern hostel just before the outbreak. It's been a hard first year, but Andy is glad they took the job.

"My wife and I worked in the money markets of the City for 11 years. Eventually we'd just had enough. So we packed it in and went back-packing for a year.

"Friends of ours ran a hostel and it looked like a great life. And when we came home that's what we decided to do."

Quality of life

Running the hostel allows them more time to spend with their baby daughter.

"We live in a beautiful part of the country, in a fantastic Edwardian manor house. We have a much better quality of life than we had before."

But it isn't all a rural idyll.

The Youth Hostels Association is a registered charity. But it is also a big employer - it has 1,350 staff and has to run itself like a business.

Andy and Niki are a bit like pub managers. They decide how to run their hostel, dealing with suppliers and catering for members.

Increase

But they have to keep within the YHA's rules, which means, for example, they don't set the overnight charges.

The YHA has 300,000 members, which it's hoping to increase to 500,000 in the next five years.

To do that, it recognises it can't stand alone. It's already working with local authorities and the National Trust, and this year will open nine new hostels in the likes of Portland, Leominster and the Lizard.

The partnership arrangement means the YHA won't own the actual premises, and start-up costs for the new hostels will be comparatively low.

It is also keen to point out that the Youth Hostel Association isn't just for young people. All are welcome.

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Student Guide

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The YHA is a charity, but just like many other businesses, it sells a service.

And, like any other business, it has to make its revenue cover its costs and have some left over. If it doesn't it's in trouble.

A charity aims to make a surplus to help it to help other people or to support its cause.

The YHA uses money from members' subscriptions and their payments for staying in hostels to keep the organisation going.

Good condition

This means paying the staff, buying everything they need and keeping the hostels in good condition.

When foot and mouth hit, people couldn't go into the countryside, so the YHA lost lots of money because people couldn't stay at its hostels.

Even if they could, many didn't want to because you couldn't walk in the hills or ramble along the coastal paths.

Although its revenue still covered its costs it hadn't enough surplus to continue to update hostels.

Just think...

What sorts of things does the YHA need to buy to keep the organisation going?

Foot and mouth hit many businesses in both rural areas and in towns. Anyone who had anything to do with the countryside or the meat business was hit.

Draw a spider diagram with foot and mouth at the centre. Think of all the businesses, organisations and people who were affected by it. How many legs can you put on the spider?

Side effects

Events are always happening which have side effects. A new supermarket will affect all the other food shops in a town.

An out-of-town supermarket will take people from the town centre so other types of shops will also suffer.

Sometimes side effects are positive - an expanding business will:

employ more people

need more resources from other business in the area and beyond

pay more taxes so the government can provide more services.

Just think...

What has happened near you recently that has had side effects on other businesses or people?

Draw another spider diagram to show the effects.

Coping with change

When the YHA decided that its only option was to close 10 hostels, it was a tough decision to make.

If its revenue was not covering its costs, it had no option.

Something had to change. It had to think hard about its future.

Should it close and sell the hostels?

Should it cut back on other things?

Should it try to be more efficient?

Should it try to sell more?

Just think...

Draw up a table of all the advantages and disadvantages of these strategies and any others you can think of.

Which would you pick and why?

Send your ideas to Duncan Simpson at [email protected]. He's the corporate affairs manager with the YHA and would like to know what you think.

Who are the stakeholders?

The decision to close the hostels affects all sorts of people.

Business decisions often have this effect. It's hard to make a change without making a difference to someone.

Sometimes it can be for the good. Other decisions can have negative effects.

Just think...

Who is affected by the decision to close the hostels? How are they affected?

Have a look at the YHA website at www.yha.org.uk. It will help you to find out more about what the organisation does.