Coronavirus: nearly half of tourism businesses may not survive


NEARLY half of Scotland’s tourism businesses may not survive the coronavirus pandemic, according to new research from the Scottish Tourism Alliance (STA).

The survey of 280 tourism businesses from across Scotland highlighted the fragile state many companies are in as the COVID-19 shutdown continues.

Compiled by research company TRKR, the survey covered a range of tourism businesses, with 55% of respondents classed as hospitality companies.

While just over half of respondents to the survey reckoned their business will survive the pandemic, only 11% said they would be able to survive without making changes and only 3% predicted growth.

Meanwhile 45% of respondents said they will struggle to get through the crisis at all.

Staff cutbacks across the sector seem likely after 81% of respondents said they would be unable to retain all their staff after the UK Government’s Job Retention Scheme ends. Nearly half of respondents – 47% – said they don’t expect to be able to retain any staff after the scheme ends.

Only 12% of respondents were managing to continue trading during the pandemic, while half were using the Job Retention Scheme, 32% were benefitting from business rates relief and 46% had made use of the Business Support Grant. Just 8% had applied for loans through the Business Interruption scheme.

Of the businesses polled, 30% said they had enough cash reserves to last three months. A quarter said they were struggling to get through the current month and 13% said they had already had to close their business.

Some respondents were better off – with 16% saying they had enough reserves to survive for six months. Though only 9% said they had enough reserves to survive the crisis.

However, respondents were not sitting idle. Just under half of businesses – 47% – were actively making plans for trading post-COVID, with a further 34% having discussions but not yet actively making plans.

STA chief executive, Marc Crothall, said although government support has been welcomed by the tourism industry, there are “concerns about whether long-term support will be forthcoming to bolster these emergency measures”.

“There is a very long road ahead in terms of recovery for our sector; this is acknowledged by both UK and Scottish governments and it is critical that tourism businesses are supported in the long term for our industry to survive,” said Crothall.

“The STA will continue to work with our members, currently c70% of Scotland’s tourism industry, to present evidence and make the case for funding and support to protect and in time, grow our industry again and find our ‘new normal’.”

The full report can be viewed here.