Perched on a financial knife-edge, Scottish tourism and hospitality businesses need ‘more than warm words’ from the Scottish Government.
But ahead of the Scottish Budget this Wednesday (4th December), the industry’s people have expressed little faith that Holyrood is on their side.
The industry’s key request – described by some as the bare minimum it should expect – is that ScotGov pass on the 40% business rates relief from the UK Budget, to match the concession that has been benefitting their counterparts south of the border.
However, a sector survey conducted on behalf of the Scottish Tourism Alliance found that 85% of hospitality trade respondents have ‘no or low trust’ that ScotGov will deliver greater funding for the sector.
STA chief executive, Marc Crothall MBE, said: “Tourism and hospitality businesses are telling us loud and clear that they need more than warm words from the Scottish Government in the latest Budget.
“They need to see measures that will immediately ease the financial burden on them and that will directly support the sector to grow and be more competitive.
“At a minimum, the business community is looking to the Scottish Government to pass on the 40% business rates relief from the UK Budget, with a roadmap to introducing a permanently lower rate that is fair and proportionate.”
The STA survey, which polled more than 300 tourism and hospitality businesses, also turned up some sobering financial facts about the Scottish industry – despite a 21% rise in net turnover and a strong boost from international visitors, 33% of survey respondents reported a drop in profits over the past year.
STA noted that its survey was carried out before the UK Government’s National Insurance employer contribution announcement, which will place an even greater cost burden on businesses.
Against that background, Crothall called for a Scottish budget that ‘protects, restores and invests’: “Protects our businesses and the wider tourism and hospitality sector, restores funding that has been taken away and rebuilds trust in government to support the industry, and invests in future-proofing and making Scotland as competitive a destination as possible.
“Although celebrated for its contribution to the economy and its remarkable recovery post-COVID, the tourism and hospitality sector has felt overlooked in recent years as a key economic driver.
“Despite repeatedly delivering for the Scottish economy, outperforming the rest of the UK when it comes to attracting international visitors, the majority of business owners who have responded say that they continue to feel overlooked and undervalued by the Scottish Government.”
Analysis by UKHospitality Scotland has found that the continued denial of the 40% rates relief would place Scottish businesses at a significant disadvantage to businesses in England.
UKH calculated that, on average, a local pub would pay almost £6000 more – 66% more than an equivalent business in England; a town centre restaurant would pay almost £10,000 more – 66% more than an equivalent business in England; while a hotel would pay £26,000 more – 70% more than an equivalent business in England.
Executive director of UKHospitality Scotland, Leon Thompson, said: “Scottish businesses need business rates support from the Scottish Government, especially after they have missed out on relief measures in the past two Scottish Budgets.
“Venues will continue to find themselves tens of thousands of pounds out of pocket, compared to their English counterparts, if this happens again. This time, it will hit even harder when combined with billions more cost hitting businesses in April through employer NICs,” said Thompson.
“Introducing at least 40% business rates relief for hospitality businesses could be the difference between venues choosing to employ more people and making investments, or abandoning those plans in order to survive,” he warned.
“Hospitality has so much potential to deliver for Scotland economically, socially and culturally. I know the Scottish Government recognises this and I hope that it chooses to implement some business rates support for our businesses, which is so crucial for them to both survive and thrive into the future.”
