Sunday, April 14, 2024
Sunday, April 14, 2024
HomeNewsLatest industry survey reveals sector remains financially fragile

Latest industry survey reveals sector remains financially fragile

The Scottish Tourism Alliance has published the results of its latest quarterly industry survey which has revealed that over half of tourism and hospitality businesses (52%) are still in ‘survival mode’ or ‘consolidation’ following COVID 19 and the ongoing financial crisis, and only 1% of respondents said their business was ready to expand.

Looking ahead, 16% of businesses that responded have no cash reserves, while just over a third (34%) have only 1-3 months of reserves, demonstrating some continued financial fragility of the tourism and hospitality sector.  However, there are signs of improvement with over a quarter (28%) of businesses saying that they are making a ‘good steady recovery’, while 18% report their business is ‘performing well’.

The survey, which ran from 24 May to 14 June, included responses from 540 tourism businesses, predominantly self-catering, bed & breakfast/guest houses, hotels, bars and restaurants, visitor attractions and tour operators.

It found that 60% of businesses say that they want the Scottish Government to hold off on introducing and progressing additional regulations until the economy further recovers, and almost half (49%) don’t support the introduction of a visitor levy.

In terms of staff, there are mixed signs of improvement but overall levels remain challenging, with 64% of all businesses saying that they are operating with the level of staff they need. The biggest barrier to recruiting and retaining staff is the lack of available staff who want to work in the business (31%), followed by the Brexit/Immigration system (26%).

Overseas bookings are also showing some positive signs, with 74% of respondents reporting that they currently have similar or better international bookings for June to September 2023 compared to last year. Domestic demand looks static with 81% saying that current domestic bookings for June to September this year are similar or lower to the same period in 2022.

Marc Crothall, STA Chief Executive said, “There has been a strong response to the survey, particularly from the self-catering sector which reflects the current climate of concern around the impacts of proposed legislation.  It is also clear from respondents across other sectors that businesses continue to experience significant challenges, however, pleasingly there is an increase in customer demand and subsequently, a renewed feeling of optimism within sector.”

“The reality is that healthy trading is all about the bottom-line performance of the business; while revenue may be strong for many businesses, the key to commercial success lies in the ability of that business to convert profit into sustainable recovery and growth.”

“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, but importantly to improve Scotland’s economic conditions, performance and to create a better environment to do business.  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, CEO 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 of the 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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