Marc Crothall: Scottish tourism - the road to recovery

Coronavirus was starting to fill the newspaper pages, but the threat still felt slightly peripheral. Within two days, my team had moved into crisis communications mode and entered what was undoubtedly the most devastating week in the history of Scottish tourism. We like many others worked 100 hours each easily in the initial period ,as the tourism sector started to collapse around us. Within days, our country moved into ‘lockdown’ and our industry, as did other sectors of the economy, ground to a halt.

We could never have predicted how things would be for us as an organisation or a sector a month on from the launch of our future tourism strategy. Like all tourism businesses, the STA remains exposed to the impacts of Covid-19, being a membership organisation for an industry that has come to a virtual stand-still in the last few weeks, and we know that things are going to be tougher for us too.

The support that has been announced for the industry to date has been hugely welcomed and will provide some much needed short-term relief for many, however as with all policies created as emergency measures under crisis conditions, there are understandably gaps where many businesses and individuals are not able to access the support they need in the short to medium term. Our role for the near future is to continue to work closely with both the Scottish and UK governments and the civil servants who have worked tirelessly too, to ensure that those gaps are highlighted and understood.

The key issues for the STA in the short term are to ensure that no one is left out and support is offered to as many small, medium and large businesses as possible over the coming weeks. Our businesses need immediate and seamless access to cash to pay employees, especially those who are on furlough and to maintain basic costs so that recovery preparation can be planned - this is urgent and essential if many tourism businesses are going to survive beyond three months.

We need to ensure that the criteria around support for the self-employed work for as many as possible, such as seasonal and full-time tour guides, owners of micro-enterprises and those that support and work in the events sector. There is also need for flexibility in the Employee Retention Scheme to ensure that some employees can work a proportion of their hours, perhaps on a rotational basis. Hotels, bars and restaurants may remain closed for some time, however basic functions such as security, IT and future sales and marketing activity needs to be resourced and planned for. For many businesses, loans although not preferred for the majority, will be the only way forward; it’s vitally important that the banks are flexible in their lending and that those businesses who have to access this type of support can do so quickly. It’s crucial that long term interest rates beyond the 12 month term are kept low as revenues similar to past years won’t start to flow through for many months and indeed years to come and as such, servicing any such loan needs to be affordable.

But what happens beyond the short term? Is it possible to understand what the future for Scottish tourism might be? When recovery might start to happen? In order to get ourselves through the immediate crisis, we must build a picture of what our new future might look like and look for the positives.

One thing we’ve always had going for us is our domestic market, which accounts for around 70% of total tourism in Scotland; c50% of this market are Scots holidaying at home. While we won’t see any tourism activity until the lock down restrictions are lifted or relaxed, those businesses that are best placed to re-open will be hoping that that the supply chain that they have been reliant on won’t be broken and they can operate in a sustainable way with continued support if required. Things will start to return, but it’ll happen in small steps and I suspect that a fair bit of our tourism offering will look different. Some businesses will diversify. Some businesses will not survive.

That said, with more Scots likely to stay home and enjoy days out with the family, and hopefully supporting local events, restaurants and pubs as they re-open will help to start to turn the tide. It is also true to say that many of us may not have the disposable income we once did so the type of travel and the experiences that people will look for will all change. Some businesses will have to adapt to this, but Scotland thanks to its richness of natural assets and what’s on offer all over the country will always offer opportunities and experiences for all.

Beyond that, estimations are that tourism globally will take around three years to recover and it remains to be seen how quickly we start to see a good flow of international visitors return. Our future strategy ‘Scotland: Outlook 2030’ has highlighted that tourism will continue to change at pace; the way we live, travel, spend, behave, interact and importantly, what businesses and brands we place our trust in. We had not expected it to be forced upon us by Covid-19. Our strategic focus in the immediate is on recovery but not losing sight of the longer term opportunity.

There will be hesitancy within the consumer market and of course there will be continued worry for our tourism businesses, but we are a resilient industry and have come together like never before. We have real strength in our community and although the road ahead for us all is unknown at the moment, I know that the spirit we have will see the majority of businesses through this extraordinarily difficult time and together we can rebuild, recover and move towards the future.

Marc Crothall is chief executive of the Scottish Tourism Alliance.