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Insider UK
Insider UK
National
Peter A Walker

Scottish tourism and hospitality sector 'still in survival mode'

More than half of tourism and hospitality businesses (52%) are still in ‘survival mode’, while almost half do not have enough cash reserves for the next quarter.

The latest quarterly survey from the Scottish Tourism Alliance (STA), which received responses from 540 tourism businesses during May and June, also showed that nearly 60% want the Scottish Government to hold off on introducing additional regulations until the economy recovers.

Nearly half of respondents (49%) said they do not support the introduction of a visitor levy, and a quarter of those that do, only do so only if the net revenue raised is ‘used solely for tourism investment and enhancement’.

A further 39% of businesses responded that current domestic bookings for June to September this year are lower compared to the same period in 2022.

Looking towards October to December, 51% said that they feel ‘fairly’ or ‘very pessimistic’ about the outlook for their business. Only 1% of respondents said their business was ready to expand.

Survey responses came from all 32 of Scotland’s local authority areas and 21 core industry sub-sectors of the tourism industry, predominantly self-catering, bed and breakfast, guest houses, hotels, bars and restaurants, visitor attractions and tour operators.

The research revealed that 16% have no cash reserves, while just over a third (34%) have only one to three months of reserves.

More positively, 64% of businesses answered that they are operating with the level of staff they need to operate effectively - although the STA noted that most responses came from self-catering businesses, which require fewer staff, so this may have impacted on the final percentage.

The biggest barrier to recruiting and retaining is the lack of available staff who want to work in the business (31%), followed by Brexit and the immigration system (26%) The perception of tourism and hospitality was also selected by a quarter of respondents as a factor (25%), closely followed by their business being based in a remote or rural location (24%).

The STA stated that the top priority for nearly two thirds of respondents (59%) is a pause on new and impending regulation, followed by business rates relief for the sector (45%).

STA chief executive Marc Crothall said: “A holistic review of the current regulation and taxation environment is just one key action needing to be undertaken now before more damage is done to the sector, as a result of a multiple of consequences.

“The Regulatory Review Task Force must act quickly - the recommendations currently being developed by the New Deal for Business Core and Sub groups, when finalised, must also be endorsed and acted on quickly to not only help protect business failure.

“I very much hope that the work of these groups will lead to the delivery of more positive economic benefits for Scotland, which will see us able to compete far more effectively as a global tourist destination.”

Stephen Leckie, STA chair and chief executive of the Crieff Hydro Family of Hotels, said: “The survey results very much echo what I’m seeing and experiencing as a business owner.

“Recruitment continues to be a serious challenge from my point of view; the removal of a significant part workforce as a result of Brexit is curtailing the ability of businesses to operate with a full service, deliver the experiences we would wish to and invest in our product with the ambition we hold.”

“The continued cost pressures on tourism and hospitality businesses, combined with the constraints around operations as a result of the recruitment crisis, greatly diminishes the profitability of businesses in our sector, the quality of experience, our competitiveness as a destination and therefore the long-term outlook for Scotland’s tourism and hospitality industry.

“We urgently need a meaningful intervention in relation to working visas and immigration policy to give businesses that essential opportunity to grow and deliver much stronger benefits to our communities and Scotland’s economy.”

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