The Scotch Whisky Association (SWA) revealed this month that, between 2017 and 2018, distillery visits increased by 6.1% to a record two million-plus.
With 120 active whisky distilleries in Scotland, it’s no surprise they are the third most visited attraction for tourists. Whisky accounts for 25% of the UK’s food and drink exports, and in Scotland it's 80%. Increasingly, tourists are visiting to see exactly where and how our national tipple goes from grain to bottle.
While you could be forgiven for thinking that only the distilleries benefit from a boost in visits, the number of tourists looking for tours and tastings is also creating opportunities for firms outside of the whisky industry. For those businesses local to a distillery – from restaurants and cafes to gift shops and taxi firms – now is the time to start thinking about how this influx of whisky tourists could impact them positively.
A good example of a business taking this opportunity with both hands is the Coach House Restaurant and Pub in Dornoch. We recently supported two local entrepreneurs’ acquisition of the pub and its proximity to both Dornoch and Dalmore distilleries is allowing the new owners to capitalise on passing trade.
Within the first three months of summer alone, the pub expects to generate half of its annual profits thanks to passing tourists.
Tourism – like many other industries – is affected by seasonal peaks.
Although a rise in demand can be good news for businesses, it can also result in extra costs. This additional expenditure is often not recouped until tourists come to stay, purchase goods or visit attractions. To cope, businesses all through the supply chain need to effectively manage working capital – the amount of cash needed to cover day-to-day costs. Doing this will ensure they can deal with peaks and troughs without overtrading.
There are steps businesses can take to manage working capital more effectively – from improving the efficiency of payment practices to exploring specialist financial products.
For suppliers, invoice finance is one such way businesses can ease the pressure on cash flow and access up to 90% of the value of an invoice within 24 hours of it being issued.
Because it is flexible, local food and drinks businesses that supply hotels, restaurants and retailers for example, can use this during seasonal peaks such as the summer holidays or over Christmas to give themselves both access to cash and certainty of payments.
Fraser Sime is regional director at Bank of Scotland
