Nearly half of tourism businesses (46%) say they will delay or cancel investment in a warning to the Chancellor that they cannot continue to absorb rising costs.
Ahead of next week’s Budget more than 70% of businesses reported a negative outlook for the next six months and 15% expect lay offs. Many are now relying on staff performing multiple roles.
Respondents to the survey by the Scottish Tourism Alliance said rising operating costs (59%) and taxation (50%) are the biggest threats to profitability. Weakening consumer confidence, cited by 32% of respondents, was also held up as a significant barrier.
Businesses said they are “running lean” following repeated cost shocks and “cannot absorb any further increases in employment costs”.
Many operators say they have no option but to cut services and move to multi-role staffing because of the pressure on overheads – a trend has been in evidence across the tourism and hospitality sector for some years now.
Marc Crothall, chief executive of the STA, said: “Confidence across Scotland’s tourism industry has weakened significantly, and these results are a clear indicator of just how stretched businesses are.
“Although many businesses are telling us that trading has been strong in terms of top-line sales, the bottom line is squeezed. In nearly all cases, businesses are telling us that as a result of shrinking margins, plans for any investment are severely constrained.
“Many businesses have made all the redundancies they can, are running lean and have no room left to reduce staffing without cutting services or compromising the visitor experience. Employers are increasingly relying on staff to take on multiple roles just to keep their doors open.”
The majority of respondents expressed frustration or pessimism. Respondents called for a reduction in employment taxes, “meaningful” business rates relief and a more stable, long-term approach to the fiscal environment for tourism and hospitality.
Concern was also expressed over the introduction of visitor levies across Scotland. Edinburgh became the first local authority in Scotland to launch a visitor levy last month, but there remain serious concerns among accommodation providers over how it is implemented.
Glasgow, West Dunbartonshire and Aberdeen are pressing ahead with plans to introduce visitor levies while other councils, including Argyll and Bute, have put plans on hold.
Mr Crothall said: “The message from this survey could not be clearer – even slight increases to the costs of doing business will cripple many tourism and hospitality businesses.”
The survey is based on the views of 74 owners of a range of tourism businesses gathered over the weekend.
#Tourism #firms #cancel #investment #warning #costs #Daily #Business