Scotland’s tourism industry is ‘gazing over a cliff’

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Scotland’s booming tourism industry is ‘gazing over a cliff’ as the impact of Brexit and rising food and drink prices threaten businesses, a leading tourism expert has warned.

Professor John Lennon, director of the Moffat Centre for travel and tourism business development, at Glasgow Caledonian University, believes hoteliers and food and beverage operators will be put at risk as ‘staycationers’ are squeezed  by low wage growth and rising inflation.

The Moffat Centre is the UK’s largest university-based consultancy and research centre for tourism and travel market research and business development. It works with almost 1,000 organisations across Scotland and holds the most comprehensive and up-to-date data on Scottish visitor attractions.

Writing in The Conversation, which uses information and research backed by academics, Professor Lennon said: ‘Despite the unsettled backdrop of Brexit and an increasingly insecure world, Scottish tourism is performing incredibly well against its competitors.

‘Tourism in Scotland and indeed across the UK has also made gains from the big decline in the value of sterling against major currencies. The UK is far more affordable to many tourists from key international markets than it was before the Brexit vote.

‘Yet despite all these positives, my strong impression is that the Scottish industry is gazing over a cliff.

‘Scotland, like the UK as a whole, is a net importer of foods. Hoteliers and food and beverage operators are going to have to move their prices up because their margins are going to be attacked. Talk to anyone in the hospitality world at the moment and they will tell you about food price inflation already well in excess of the 4 per cent to 5 per cent reported. The time has to be coming when tourists will find the pound in their pocket going less far.

‘Many international visitors will be able to take the price hike. Many domestic tourists will not because they are being squeezed in two ways: low wage growth and gathering inflation at the same time. What does this mean? As we move through January, February, March, expect to see more liquidations in the tourism industry; more businesses going to the wall, particularly the highly leveraged ones.’

Writing as part of an overview of tourism in 2018, Professor Lennon also highlights the Scottish industry, which generates £1.4billion a year and employs 219,000 people, is dependent on EU nationals.

He added: ‘Another issue is labour: Scottish tourism and hospitality relies on a supply of migrant workers, and the country is already bleeding EU nationals. The availability of labour working in the sector is becoming acute and will continue into 2018. Productivity is going to become more and more of an issue and it will do the country’s reputation no good if the quality of service dips.’

There are also calls for closer co-operation between Glasgow and Edinburgh to help rural areas benefit from increased visitor numbers.

Professor Lennon said: ‘Detractors may talk about over-tourism, but Edinburgh isn’t full 100 per cent of the year yet: hotel occupancy was 83 per cent in 2017, only three points up on five years ago. Glasgow occupancy is not far behind, but the two cities could arguably work better to spread the benefits of tourism across the central belt, to try and get more tourists out of the cities and into rural areas.

‘Rover rail tickets allowing unlimited rail travel between Edinburgh and Glasgow would be a good idea, as would cooperation on accommodation supply and transport during the Festival and Hogmanay. There is also an argument for spinning these out to places like the borders, which hasn’t enjoyed the same type of success.’