THE cost-of-living crisis, lure of overseas holidays, and Scotland’s inability to compete on the world stage on price and value for money are hammering the country’s tourism prospects.

A major new survey has underlined the challenges facing the Scottish tourism industry, revealing that 50 per cent of businesses have fewer bookings than normal for June to August, compared with 2019.

Nearly 40% of the 700 businesses surveyed by the Scottish Tourism Alliance, between May 17 and June 8, reported a fall in spending since May 2021.

According to the STA, summer bookings are perceived by businesses to have been impacted by a range of factors, including the surging cost of living in the UK, the draw of holidays abroad and people taking late decisions on vacations. Scotland’s inability to compete internationally on price and value for money was also cited.

The survey also lays bare the cost of doing business for firms in the Scottish tourism sector, with rising energy bills, increasing supplier costs, and issues around recruitment and staffing identified as the top three challenges.

The three biggest barriers to recruitment are a lack of available staff, current UK immigration visa policy, and a negative perception of the industry. The survey found that 60% of hotels, 43% of visitor attractions, and 45% of bars, pubs, restaurants, cafes and takeaways say they are unable to trade effectively with the number of staff they currently have.

More than 50% of respondents said it will take at least one year for their business to make a financial recovery, if it does at all; more than 30% said they are not confident or unsure about their long-term recovery and survival over the next one to three years.

Marc Crothall, chief executive of the STA, said: “The results of what has been one of our most robust surveys to date in terms of number of respondents and depth of data confirms very much what businesses have been telling us for many weeks now; recovery is happening albeit at a much slower pace than anticipated and certainly not across all tourism sectors.

“The cost-of-living crisis is hitting Scotland’s tourism sector very hard on many levels. People are hesitant about committing to booking a break due to household financial challenges and uncertainty, consumer spend is down and with the rise of energy prices and supplier costs, many businesses are finding that the level of recovery is almost static. 

“This impacts the ability for our tourism industry to remain competitive globally; we struggle to compete on price and we’re unable to retain and attract the quality of staff required to deliver the level of service demanded by today’s consumers.

"The majority of our businesses cannot move beyond running to stand still, despite the fact that we’re now almost into the main tourist season.  The transport disruption and planned rail strikes only make the challenge that much harder. The market is still fragile and businesses are finding it increasingly hard to trade their way into a place of sustainable recovery.

“Customer uncertainty is at an all-time high right now which is reflected in the forecasts and future bookings; much greater support is needed by way of financial levers from both the UK and Scottish governments which could offer the industry the breathing space it needs to move at what is a much slower pace through recovery and build towards long term acceleration.”