North Coast 500: Staffing shortages threaten Scotland's tourist route

The man in charge of a string of hotels serving the North Coast 500 tourist route that he helped to create has said he is “determined” to maintain staffing levels despite extreme pressures bearing down on the hospitality industry.

David Whiteford of Highland Coast Hotels said the group goes to significant lengths to look after its employees because “it’s not easy to get good people”. This is particularly true in remote and rural locations where a lack of affordable housing is a major barrier.

“Costs as we all know have spiralled and it was very difficult to budget for any of these – food and drink costs, energy prices, staffing costs – but we are determined we are not going to reduce staff,” he said.

“We are going to be efficient with staff but we are a people industry. You can use technology to some extent, but guests want to meet people and be given a good Highland welcome so we are determined to employ locally and keep people as an integral part of what we do.”

Mr Whiteford was previously chairman of the North Highland Initiative (NHI) charity which helped to establish and develop the NC500. He resigned from that post in 2021 after securing backing from leisure sector investment specialist Kings Park Capital to launch Highland Coast with an initial portfolio of four properties: the Royal Golf Hotel in Dornoch, the Royal Marine Hotel in Brora, the Kylesku Hotel in Sutherland, and the nearby Newton Lodge in Unapool.

The group has since taken over two further hotels – the Tongue in Sutherland and the Plockton Inn overlooking Loch Carron – taking total employee numbers to 200 during peak periods. Highland Coast aims to expand further despite the difficult economic climate.

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In a submission last year to the Scottish Government on labour shortages, UKHospitality Scotland estimated that vacancy rates in the sector are running at anywhere from 10% to 16%, equalling as many as 48,000 unfilled jobs. As is the case in many other industries, shortfalls have been particularly acute in the wake of Brexit.

These difficulties are compounded in remote spots where a lack of affordable housing, leisure and healthcare services creates a barrier to creating a local pool of labour. Managing director Alex McKie of Fusion Group, which has interests in nearly 40 hotels and self-catering properties across west and central Scotland, said the industry has lost a lot of skills during the last three years as the combination of Brexit and the pandemic led many who were “historically gainfully employed” to either return home or switch industry sector.

“It is massively challenging in rural areas,” Mr McKie said.

“The only advantage that rural areas have is when they have staff accommodation. Staff accommodation is pretty key to at least 10 of the sites I either have or work with.”

Highland Coast Hotels has six properties along the NC500, including one in Kylesku (Image: Unknown)

Asked about the impact of employee shortages, he said some operators are “overpaying” for staff and that “poaching” has become widespread. The upward pressure on wages is leaving some business owners with no option but to put up prices, but there is a limit to this because consumers are facing inflationary pressure as well.

As highlighted earlier this week in a survey from the Scottish Licensed Trade Association, Mr McKie said operators have also been reducing service levels, be it by opening on fewer days or offering restricted menus.

Mr Whiteford at Highland Coast said there were times last year when some of the group’s establishments had to turn business away because staff were in short supply. The restaurant at Kylesku, for example, was unable to serve passing trade because hotel residents had to take priority.

“There is a cost associated with not having people, so having really good people in situ means you are open for business,” he said.

“Not being open for business is a real concern for us because we are here to be active and perform well. You can’t be active if you are semi-closed.”

While there will always be a need for seasonal workers, Mr Whiteford said Highland Coast “never” employs on zero-hours contracts and wherever possible opts for long-term employment arrangements. He added that the group sees itself as a “local leader” on a variety of issues affecting those living nearby, be that housing, healthcare or the provision of child care: “If it is good for them it is good for us – it’s quite as simple as that.”

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He continued: “We are trying to get as many local as we can, but affordable housing is a major barrier – or sorry, the absence of it is a major barrier.

“I find myself lobbying for that in Tongue, in Scourie, which is a village next to Kylesku, and in Plockton itself. It is a barrier to getting the young and couples and families to come in and be colleagues in our establishments.”

Alex McKie (Image: Scottish Tourism Alliance)

Highland Coast has accommodation to house seasonal workers, but these people have been harder to come by in recent years given the “significant” impact of Brexit.

“Some of our friends from the likes of Eastern Bloc countries like Poland did go back, although I would say some of them were going back anyway because their economy was improving, and quite rightly they wanted to go home.

“But there is evidence to say there are people from Czechoslovakia and other places that would want to come here [and work], so it would be really, really good to have a visa scheme from Eastern Bloc countries to allow us to ‘top up’ during peak season, and a reasonably-priced visa scheme as well.

“We would always like to see if we can grow more from within, but we always need to top up, and I do think we need to promote better within the opportunity that hospitality can give to young people.”

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