Scotland’s tourism industry is “gazing over a cliff”, an expert has warned, with an acute shortage of migrant workers just one of the problems the sector is facing.
Professor John Lennon, director of the Moffat centre for travel and tourism business development at Glasgow Caledonian University, said rising food price inflation could force many operators to increase charges.
Such a move could hit business from so-called “staycationers”, with many across the UK seeing their budgets squeezed as a result of low wage growth and increases in the cost of living.
As a result, Mr Lennon warned of more businesses in the tourism sector going to the wall in the coming months.
Mr Lennon said Scotland’s tourism industry had been performing incredibly well, partly as a result of the drop in the pound post-Brexit making the industry more competitive.
A recent survey by Visit Scotland said tourism was worth around £11 billion each year to the Scottish economy.
Major attractions also saw a record boost in visitor numbers amid claims terrorism in other parts of Europe has seen tourists flock to “safer” destinations.
Last summer saw a 20 per cent increase in footfall to paid-for attractions on last year, making it the busiest season on record.
The increasingly high profile of Scotland also led Rough Guide travel reviewers to place the country at number two on its top 10 list of countries to visit.
Mr Lennon said: “Tourism in Scotland, and indeed across the UK, has made gains from the big decline in the value of sterling against major currencies.
“The UK is far more affordable to many tourists from key international markets than it was before the Brexit vote.”
Despite this, the expert added: “My strong impression is that the Scottish industry is gazing over a cliff.”
In an article on The Conversation website, which highlights work by the academic and research community, he stated: “Scotland, like the UK as a whole, is a net importer of foods.
“Hoteliers and food and beverage operators are going to have to move their prices up because their margins are going to be attacked.
“Talk to anyone in the hospitality world at the moment and they will tell you about food price inflation already well in excess of the four per cent to five per cent reported.
“The time has to be coming when tourists will find the pound in their pocket going less far.
“Many international visitors will be able to take the price hike. Many domestic tourists will not because they are being squeezed in two ways: low wage growth and gathering inflation at the same time.
“What does this mean? As we move through January, February, March, expect to see more liquidations in the tourism industry; more businesses going to the wall, particularly the highly leveraged ones.”
He added: “Another issue is labour: Scottish tourism and hospitality relies on a supply of migrant workers and the country is already bleeding EU nationals.
“The availability of labour is becoming acute and will continue into 2018.”
To help tackle the problems the industry is facing, he suggested Scotland’s two largest cities work together to spread the benefits from tourism across the central belt.
Prof Lennon said: “Rover rail tickets allowing unlimited rail travel between Edinburgh and Glasgow would be a good idea, as would co-operation on accommodation supply and transport during the Festival and Hogmanay.
“There is also an argument for spinning these out to places like the Borders, which hasn’t enjoyed the same type of success.”
Another idea to boost tourism, suggested by SNP MSP Angus MacDonald, was a new ferry route between Scotland and Scandinavia.
Mr MacDonald is calling on ferry operators to get round the table with the Scottish Government to help make a new route happen.
He recently said: “There is great demand on both sides of the North Sea for a direct passenger ferry link between the UK and Scandinavia.
“This represents a great opportunity for Scotland.”
The Moffat centre is the UK’s largest university-based consultancy and research centre for tourism and travel market research and business development.
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