The Scottish Tourism Alliance has published the results of its research into the recovery of the tourism sector, revealing that summer and forward bookings are down, and almost 40% of businesses have reported a decrease in spending since May 2021. Looking ahead, it also noted that 57% of businesses reported fewer bookings than normal for the period of September-December in comparison to May 2019 forward bookings levels.
700 tourism businesses took part in the survey between 17th May to 8th June across all 32 of Scotland’s local authority areas and the industry sub-sectors, predominantly self-catering, hotels, bars and restaurants, bed & breakfast, visitor attractions, guest houses, and tour operators.
It found that 50% of businesses, along with seeing a decrease in customer spend, say they will have fewer bookings for the period of June-August in compared to this time in May 2019. This is believed to be caused by the cost of living crisis, the appeal of outbound international travel, Scotland’s inability to compete internationally on price and value for money, and people taking late decisions on holiday destinations.
Just over a third described their business as currently in steady recovery, with half of the respondents stating that it would take them at least a year to recover. 6% said they are unlikely to make it.
The main challenges for businesses are rising energy costs, an increase in supplier costs, recruitment, and staffing. Inflation is also a notable challenge. In terms of recruitment, the top three barriers are the lack of available staff wanting to work, the current UK Immigration visa Policy, and a negative perception of the industry.
STA Chief Executive Marc Crothall said, “The results of what has been one of our most robust surveys to date in terms of number of respondents and depth of data, confirms very much what businesses have been telling us for many weeks now; recovery is happening albeit at a much slower pace than anticipated and certainly not across all tourism sectors.
“The cost-of-living crisis is hitting Scotland’s tourism sector very hard on many levels. People are hesitant about committing to booking a break due to household financial challenges and uncertainty, consumer spend is down, and with the rise of energy prices and supplier costs, many businesses are finding that the level of recovery is almost static.
“This impacts the ability for our tourism industry to remain competitive globally; we struggle to compete on price and we’re unable to retain and attract the quality of staff required to deliver the level of service demanded by today’s consumers. The majority of our businesses cannot move beyond running to stand still, despite the fact that we’re now almost into the main tourist season.
“The transport disruption and planned rail strikes only make the challenge that much harder. The market is still fragile and businesses are finding it increasingly hard to trade their way into a place of sustainable recovery.”
“Customer uncertainty is at an all-time high right now which is reflected in the forecasts and future bookings; much greater support is needed by way of financial levers from both the UK and Scottish governments which could offer the industry the breathing space it needs to move at what is a much slower pace through recovery and build towards long term acceleration.”
“It is however very heartening to see that 86% of respondents have invested in transitioning to a greener business which underlines the potential for tourism to deliver transformational change in relation to the Scottish Government’s Net Zero ambition.”
“There are some indications of positive recovery; some businesses in the sector who have been able to invest and adapt quickly plus have the staff in place are doing better than others but it’s patchy and the autumn/winter forward bookings window remains worrying.”
“The STA will continue to call on the UK government for a lowering of VAT and a change to UK Immigration rules which are deemed by the majority in our industry as the most effective policies to support businesses.
“We will also continue to push the Scottish Government to extend business rates relief beyond this month and commit to much greater investment in tourism promotion of Scotland as a destination.”
Malcolm Roughead, CEO VisitScotland said, “The survey underlines some of the challenges facing the tourism and events industry. We know that the move towards recovery is not consistent and businesses are experiencing a shortage of workers, while the cost of living is also a concern.
“There are, however, some encouraging signs with the return of international visitors and consumer research which shows more UK residents expect to take an overnight domestic trip between June and September than in 2021.”
“We’re working hard to build on this interest and ensure Scotland is front and centre of mind for visitors planning a trip. By working together with industry, we can rebuild this vital part of Scotland’s economy and drive its sustainable recovery.”