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Home Lifestyle Travel

Scottish tourism bookings fall as cost-of-living crisis bites

by Markel
in Travel
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Scottish tourism bookings fall as cost-of-living crisis bites

Travel bookings for this summer and beyond are down and almost 40% of businesses have reported a decrease in spending in since May 2021.

That’s according to the latest Scottish Tourism Alliance (STA) research, which revealed that half of those surveyed think they have fewer than normal bookings for the period of June to August in comparison to this time in May 2019.

Looking ahead, 57% of businesses report fewer bookings than normal for the period of September to December, in comparison to pre-pandemic.

Bookings this summer are perceived by businesses to have been impacted by the UK 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.

More than 700 tourism businesses took part in the survey which ran from 17 May to 8 June, with responses coming from all 32 of Scotland’s local authority areas and 15 core industry sub-sectors; predominantly self-catering, hotels, bars and restaurants, bed and breakfast, visitor attractions, guest houses and tour operators.

Of those, 34% described their business as currently in steady recovery, 50% of respondents stated that it would take them at least a year to recover and 6% said they are unlikely to make it.

The top three challenges for businesses currently are rising energy costs, an increase in supplier costs, recruitment and staffing. Inflation is also a notable challenge.

More than half have seen a decrease in customer spending in comparison to the same period in May 2019.

Digging into the research, other findings include:

Recruitment

The STA’s survey showed that 60% of hotels, 43% of visitor attractions and 45% of bars, pubs, restaurants, cafés and takeaways are unable to trade effectively with the level of staff they’re currently operating with.

The top three barriers to retention of staff are business seasonality, other sectors being perceived as being more attractive, and an inability for business to pay more competitively. Additional workload on staff due to the wider recruitment crisis is also a notable challenge.

Recovery

More than half of businesses say it will take them at least a year for the financial recovery of their business, if at all.

A further 30% of more are not confident how they feel about their long-term recovery and survival over the next one to three years

Meanwhile, more than 60% of businesses have adapted, changing their business model to give them the best possible chance of commercial viability in the current business climate.

Policy

A lowering of VAT relief, the energy price cap being extended in October and a change to UK immigration rules and visa requirements were listed as the most effective policy changes that would support businesses at a UK Government level.

At a Scottish Government level, the extension of business rates relief beyond June and greater investment in tourism promotion were listed as being the most effective policy commitments to support businesses.

Net zero

Only 14% of respondents had not made any investment into transitioning to a greener business, with the majority having installed energy saving measures (69%), followed by sourcing locally (67%) and making improvements to business energy consumption (46%).

Affordability and other priorities were listed as the top reasons businesses haven’t yet invested in transitioning to a greener business.

Competitiveness

Improved infrastructure and transport, removal of policies which seek to impose further tax business and on tourists, and improved quality of the visitor experience were the top three things that businesses listed that Scotland needs to do in order to be a more globally competitive tourist destination.

Businesses also said that they need more staff and the ability to invest and develop product to be more competitive in the marketplace.

Looking ahead, 57% of businesses report fewer bookings than normal for the period of September to December, in comparison to reviewing this period in May 2019.

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STA chief executive Marc Crothall said that the survey confirms what businesses have been telling the organisation for weeks; recovery is happening, but at a much slower pace than anticipated and certainly not across all tourism sectors.

“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.

“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.”

He added that the STA will continue to call on the UK Government for a lowering of VAT and a change to immigration rules which are deemed by many in the sector 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, chief executive of VisitScotland, said: “The survey underlines some of the challenges facing the tourism and events industry.

“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.”

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