Brexit, household budgets and taxation among challenges
BREXIT, squeezed household budgets and increased taxation are likely to be among the biggest issues facing the Scottish hospitality industry in the coming years.
That was the view of economist Graeme Roy, director of the Fraser of Allander Institute at the University of Strathclyde.
Speaking at the recent Scottish Tourism Alliance Signature Conference in Glasgow, Roy said that Brexit will “cast a shadow” over the industry for the next few years, with likely impacts on staffing and visitor numbers, among other areas.
However, he also stated that complications between Britain and the EU could encourage Scotland’s tourism industry to target emerging markets such as China and India.
And while a weak Sterling could help to make Scotland and the UK more attractive to foreign visitors, this could be partially offset by British people delaying or cancelling domestic holidays as household earnings continue to be squeezed.
Taxation will also continue to be a hot topic, said Roy.
“The debate in Scotland has centred on taxation, whether that be business rates, income tax or even the introduction of a tourist tax,” he said.
“The (opinion) on all of these things is mixed, and there are those for and against, but perception is important.
“And if Scotland is perceived – rightly or wrongly – as less competitive or less welcoming than other markets then the government will need to work hard to counter this view.”
The conference also heard from Peter Martin, vice president of research firm CGA, who reported on licensed trade trends from across the UK.
Among the findings were that there are five closures for every seven venue openings in the UK, with a “massive churn” in the market since 2012.
However, in Scotland, there is said to be growth in both food and drink sales in the on-trade, with craft beer, in particular, a success story in Scotland’s bars and pubs.
In the UK overall, craft beer was said to represent 6% of the beer market, growing at 5%. But in Scotland it now represents 8% of the overall beer market, growing at a rate of 4% each year.
Quality was said to be key to the industry across the UK.
“The key thing is about experience now,” said Martin.
“Value for experience is now more important than value for money. It’s not the food on its own, it’s not the drink on its own, it’s the whole package.”
Other speakers at the conference included the founders of Tens Sunglasses, Marty Bell and Kris Reid,
and Gordon Campbell Gray, founder of Campbell Gray Hotels.
The event was opened by a video address from first minister Nicola Sturgeon, in which she said the Scottish tourism industry “has continued to thrive”.
“That remarkable success is testament to the hard work, expertise and creativity of everybody working in our tourism industry,” said Sturgeon.
“It is also a result of the constructive partnership that exists between the industry and government.”