The decision by the new Scottish Government to appoint a Cabinet Secretary for Economy, Tourism and Transport is both significant and welcome.
During the recent election campaign, the Scottish Tourism Alliance (STA) called for stronger Cabinet-level recognition for Scotland’s tourism and hospitality industry. In our Holyrood manifesto and in an open letter to Scotland’s new MSPs, we made the case that if jobs, growth and the economy are priorities for Scotland, then tourism and hospitality must be too.
The appointment of Stephen Flynn sends an important signal that tourism is now being recognised as part of Scotland’s wider economic future. He is a proven political communicator with strong pro-business instincts and a clear understanding of the importance of economic growth.
I have had the benefit of engaging with Mr Flynn on a few occasions when he was an MP in Westminster, so he was aware of the STA and our role in Scottish tourism before his appointment as Cabinet Secretary. The STA chair, Rebecca Brooks, and I very much welcomed the early invitation to meet with him soon after taking up his post. During those early discussions, it’s been extremely encouraging to hear his recognition of the industry’s contribution to Scotland’s national and local economies and its role as a key export sector. It is clear that Mr Flynn understands the many of the immediate pressures facing businesses, particularly around rising costs and competitiveness.
This matters. Tourism and hospitality are a vital part of Scotland’s economy, but have too often been viewed as being the ‘golden goose’ and that tourism “just happens”.
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When you scratch beneath the surface of our tourism and hospitality sector or speak to any business owner or senior industry figure, you might ask yourself how on earth it has happened at all in recent years.
There is not a single constituency in Scotland where our industry is not a critical source of employment and business. It is the lifeblood of communities across Scotland.
Visitors spend £11.4 billion annually, supporting around 239,000 jobs and more than 16,000 businesses across Scotland. In many rural and island areas, it is the main employer.
It is one of Scotland’s most important export earners, bringing vital external spending into the economy and serving as a powerful introduction to the country, not just as a place to visit, but also to work, live, study, and invest.
Tourism does not simply benefit from a strong economy. It drives one.
For too long, tourism has often been viewed as an industry that will continue delivering regardless of the pressures placed upon it, and while our industry is resilient, resilience should not be mistaken for strength.
The last round of STA research revealed that half of Scotland’s tourism and hospitality businesses are at risk due to a lack of cash reserves. That should concern every MSP and every policymaker in Scotland as we move into a new era of government.
Businesses across the sector continue to face rising operating costs, workforce and skills shortages, business rates and tax pressures, housing challenges, fragile transport links, poor digital connectivity, an increasing regulatory burden, and a far more competitive, price-sensitive market. The margins are being squeezed at every level, yet businesses remain under pressure to invest in meeting the expectations of today’s visitors, whether international or domestic.
The ability to invest is essential. It determines whether businesses can recruit, grow and compete, impacting Scotland’s quality and competitiveness as a global destination.
For too long, businesses have heard warm words without the follow-through required to create a policy landscape that fosters competitiveness and opportunity.
The first 100 days of this Government now matter enormously for tourism and hospitality businesses across Scotland, and its depth of understanding of the challenges our industry continues to face will be measured during those first few months.
The appointment of a Cabinet Secretary for Economy, Tourism and Transport is an important and welcome first step; however, businesses will now be looking to see whether tourism is genuinely being placed at the centre of economic policymaking and investment decisions, or whether this becomes simply another structural change without meaningful action behind it.
The next Parliament must be clear in its ambition and practical in its support. That means accelerating business rates reform and creating a policy and investment environment that supports competitiveness, confidence and growth. It means recognising tourism and hospitality as a priority growth sector and key export earner. It means improving transport and digital connectivity across Scotland and ensuring far better cross-portfolio working across government.
It also means addressing recruitment and retention challenges by investing in our people, particularly in rural and island communities where businesses are faced with enormous challenges around workforce shortages and housing pressures.
Our industry wants to improve, grow and compete. We want to embrace new technology, strengthen sustainability and continue building world-class visitor experiences. That ambition is not lacking. A supportive policy environment, however, has been lacking for too long. The erosion of Scotland’s tourism industry began years before the pandemic, and geopolitical volatility and instability, and the effects are now evident.
The choices made by politicians over the coming months will determine whether we invest in and grow one of Scotland’s greatest economic and cultural assets, or whether we risk a continued decline that will be catastrophic for businesses, jobs and communities across the country. Most of you will already have seen the beginnings of that in and around the places you live and visit.
The sector’s businesses remain ambitious. Scotland has the opportunity to be a world leader in 21st-century tourism - the vision of our National Tourism Strategy, ‘Outlook 2030’; however, we will only realise that ambition if the sector is properly understood, prioritised and supported.
Tourism and hospitality are not operating on the periphery of Scotland’s economy. In many parts of the country, they are the economy. Our industry supports local supply chains, sustains high streets and communities, creates opportunities for young people and brings life and investment into areas where few other industries can operate at the same scale.
If we get this right, which we absolutely must, and we have a real opportunity to do so, tourism and hospitality can deliver more jobs, an ambitious return on investment, stronger communities and much greater economic value for Scotland.
The creation of a Cabinet Secretary role which explicitly includes tourism is an encouraging and important signal from the new Scottish Government. The challenge now is ensuring that recognition translates into meaningful action.
Scotland’s tourism industry does not lack ambition - the question is whether national policy will now match it.
Marc Crothall is the chief executive of the Scottish Tourism Alliance
