Brexit, Highlands houses shortage: Albatrosses for Scottish tourism

Thankfully, by last year at this time, conditions had returned to normal. However, the intervening year will have given large numbers of potential overseas visitors to Scotland plenty of time to either dust down travel plans abandoned amid the pandemic or formulate new ones.

Crerar Hotels chief executive Chris Wayne-Wills in February highlighted the strength of bookings for this spring and summer, and noted the clear return of North American visitors.

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With sterling’s slump in the wake of the Brexit vote, Scotland and the UK as a whole have become much cheaper for visitors from elsewhere in Europe, North America and many other countries.

There has been a raft of activity in the Scottish tourism sector, including many major refurbishments. Crerar Hotels itself has invested heavily in its seven-strong portfolio of properties with four and five-star ratings from the Automobile Association. And Highland Coast Hotels this week announced the official reopening of the Plockton Inn and The Tongue Hotel, following extensive renovation programmes.

However, as tourism and hospitality operators gear up for the peak period, the continuing major challenges facing the sector have also been to the fore.

Such constraints are particularly demoralising in these most difficult of economic times in the UK. The UK’s annual consumer prices index inflation rate of 10.1% for March is the highest in Western Europe, and we have no serious plan from the Conservatives at Westminster to address the country’s basement spot among the Group of Seven leading industrialised nations in terms of economic prospects for this year.

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Two key constraints for Scotland’s tourism sector were flagged last week by the owner of The Seaforth restaurant at Ullapool. These are in addition to the more general cost-of-doing-business woe for businesses in Scotland and elsewhere in the UK, amid Britain’s terrible inflation problem, and are the last things hard-pressed operators need after sustained and protracted pressure on their finances amid the pandemic.

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The first of these two constraints affects particularly the many Scottish tourism businesses operating in remote and rural areas. The second affects such businesses greatly as well, although it is also a far wider problem that spans tourism and the broader hospitality industry and many other sectors right across Scotland and in other parts of the UK.

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The owner of The Seaforth in Ullapool, J&R Group, revealed it had been “facing the reality of not being able to fully open” the popular seafood restaurant, bar, and fish-and-chip shop, citing “the acute lack of affordable homes in the area”.

It did so as it announced it had moved to “sidestep” what it describes as a “crippling housing shortage” in the region by purchasing a nearby motel to provide low-rent staff accommodation.

J&R Group, the partners in which are hoteliers Jon Erasmus and Richard Drummond, said that, when the Morefield Motel came on the market for £475,000, it had taken the decision to bid “as it would fill an accommodation gap currently unable to be met by local or national authorities”.

It was an innovative move - the purchase of the motel has made available 10 rooms at low rents for local and international employees with an additional apartment housing managerial staff.

However, it is also a move which throws into stark relief the housing crisis blighting so many of Scotland’s remote and rural areas.

Ullapool is on the North Coast 500 route but the great geographical scale of the housing crisis across the West Highlands was flagged by veteran Scottish hotelier Paddy Crerar last year. Mr Crerar, who recently unveiled the sale of Crerar Hotels to a joint venture between Blantyre Capital and operating partner Fairtree Hotel Investments, flagged severe housing shortages in and around Inveraray and Glencoe and on the Isle of Mull, the locations of three of Crerar Hotels’ properties.

The second constraint flagged by J&R Group is one also highlighted by Mr Crerar and by many other voices in the Scottish tourism industry: Brexit, of course.

J&R Group said: “The Highland housing shortage, allied with less EU workers following Brexit, has placed severe staffing pressures on hospitality and tourism providers in the Highlands and Islands.”

Brexit is, of course, weighing heavily on the overall economic performance of Britain through the impact of the loss of free movement of people between the UK and European Economic Area countries in exacerbating the country’s skills and labour shortage crisis and through the ending of frictionless trade.

And it is truly lamentable that the UK’s hard Brexit, something that was chosen most wilfully by the Conservatives in the face of countless warnings about the effect on the economy which have inevitably proved correct, is hampering Scotland’s tourism sector. This may stick even more in the craw of many people north of the Border given Scotland voted overwhelmingly to remain in the European Union.

In many ways, of the two albatrosses around the Scottish tourism sector’s neck identified by J&R Group, the housing shortage is a far more complex issue to solve. UK housing market dysfunction has been exacerbated by the many years of rock-bottom interest rates resulting from the global financial crisis, which got under way in earnest in 2008. These rock-bottom rates propelled house prices higher. The issue of second homes in rural and remote areas remains controversial and not without complexity, given the potential boost to tourism where these are let out and bring in bigger-spending visitors whose money is important to fragile communities.

Brexit’s huge part in severe staffing and skills shortages has a simple solution – rejoining the single market and reinstating free movement of people between the UK and EEA. Any kind of major U-turn on the Conservatives’ clampdown on post-Brexit immigration to the UK from the EEA would of course be a start. Regardless of the simple answer, however, the Brexit constraint on Scotland’s tourism sector is probably more of an intractable problem – by dint of the Conservatives’ sheer ideological bloody-mindedness.