The blossom is blooming and the crocuses are out. There is heat in the sun when it breaks through but the threat of rain barrelling in from the estuary of the Severn is never far away.

Normally in Cheltenham these are telltale signs that it is festival time, that March respite from daily worries when fans of horseracing descend on Gloucestershire in their tens of thousands.

But this year it will be very different. The festival will take place behind closed doors from Tuesday and the royals and aristocrats, the reality TV stars, footballers, farmers, those who like to bet and those out to sink as many pints of Guinness and glasses of champagne as possible will have to watch from afar.

The loss in Cheltenham is being keenly felt, financially and psychologically. “It is such a shame,” said Adam Lillywhite, who runs the Cheltenham Townhouse hotel at Pittville Lawn, just down the hill from the course. “It’s usually my first target of the year to get the hotel spick and span for that first day of races. It’s a great milestone for the whole town. Of course, we understand why it can’t go ahead with crowds this year and I agree with the decision, but it is difficult.”

The festival is estimated to be worth £100m to the regional economy. Dan Watts, who owns a butcher’s shop on Bath Road, said: “It will be very hard for a lot of businesses – from the greengrocers to the fishmongers, the bakers, the pubs, the restaurants, the entertainment venues, the hotels, the B&Bs. Even the students who normally work up there will miss out.

“We supply a lot of restaurants, hotels and pubs for the festival normally. It’s like another Christmas for us usually. There’s a sadness about the town but they’ve taken the right decision.”

Chloe Bryan, who helps run a cafe on Bath Road, said she will miss the buzz of the festival. “The whole town comes alive,” she said. “Everywhere is busy and the shops have a real boom time. I don’t think it should have gone ahead last year but the fact that it did shows how important it is for the economy.”

Cllr Victoria Atherstone, the cabinet member for economy and development on Cheltenham borough council, said the festival was “by far and away the largest event of the year” for the area.

“Its importance to the local economy and to that of the wider region cannot be overestimated,” she said. “It provides a huge boost to the town’s hotels, bars and restaurants for the whole week – but so too all of the supporting businesses and supply chains, with a multiplier effect that extends way beyond Cheltenham.”

Jake Doherty, the manager of micropub and off-licence Bath Road Beers, said: “A lot of businesses rely solely on it for any profit they make through the year. One bar I know takes £100,000 a night and gets through staggering volumes of Guinness. But it’s absolutely right it should not go ahead with crowds. It’s insane that it went ahead last year.”

The photographs of packed stands at Cheltenham last year as Covid spread may become one of the defining images of the UK’s initial reaction to the pandemic. The organiser of the festival, the Jockey Club, introduced measures to try to keep coronavirus at bay, such as setting up disinfectant stations. It insisted it had followed government advice in going ahead with the event.

“Pressing ahead gave Cheltenham a bit of a bad name,” said Malcolm Hannaford, who runs an office supplies shop. “We know people who have died from Covid, we know people who have long Covid. A lot of people blame the festival.”

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Cllr John Payne, a member of Prestbury parish council, said the suspicion lingered that the festival had cost local people their lives. “I think it was irresponsible for it to go ahead,” he said. “I’m convinced it will have led to deaths not just in Cheltenham but further afield. It was effectively a Covid exchange. The Jockey Club says it was following government guidance. The guidance was wrong.”

This year, the Jockey Club has appointed a “community engagement manager” to reassure the public that the event will be Covid-secure. He has written to local businesses explaining there will be no owners, annual members, hospitality guests or general public at the course.

He wrote: “We appreciate that there is concern in the community about the impact the festival could have but we feel confident our plan is robust enough.”

There is always a very large Irish representation at the festival. Irish trainers, grooms and jockeys will all be tested several times for Covid prior to arrival, and they will be accommodated within a “green zone” taking in the racecourse and a luxury hotel nearby – Ellenborough Park – for the duration of the visit, remaining segregated from their UK counterparts and local people.

Cllr Paul Hodgkinson, the leader of the Liberal Democrats on Gloucestershire county council, said he was still amazed that the event went ahead last year. “We’ve had about 1,000 people die from Covid in Gloucestershire and many others have been very sick. We know people who who attended the races and fell very ill. It didn’t feel right to run the event as they did at the time and it still doesn’t.”

But there has been no in-depth official review of the impact. “That is incredibly disappointing,” said Hodgkinson. “Lessons have to learned so that similar mistakes will not be made again.”

Related: ‘If you wanted to design a virus dispersion hub, you could do worse’: the Cheltenham Festival, one year on

In the month after last year’s festival, mortality figures compiled by the Health Service Journal showed that Gloucestershire hospitals NHS trust, which covers Cheltenham, recorded 125 deaths, roughly double that in two nearby trusts at Bristol (58 each), and those covering Swindon (67) and Bath (46).

NHS data analysts Edge Health suggested the impact of the Cheltenham festival, along with two big football matches played in Manchester and Liverpool that week, together caused more than 100 deaths, 500 hospital cases and 17,000 infections.

The government argues there are many factors that could influence the number of cases in a particular area, including population density, age, general health and the position of an area on the pandemic curve. It stresses that its advice to go ahead was taken in consultation with England’s chief medical officer, Chris Whitty.

A government spokesperson said: “It is our absolute priority to protect people’s health and our advice to the public is based on direct, continuous consultation with scientific and medical experts. The Cheltenham festival took place within clear government health guidance at the time.”

A Cheltenham racecourse spokesperson said: “It’s a real shame for the local economy and for racing fans that it’s not possible for spectators to attend this year. However, just as last year when the festival went ahead in accordance with government advice that it should do so, we continue to respect and adhere to the nationwide restrictions in place.”