NEW FSB Highlands & Islands Tourism Report Finds 1 in 10 Businesses "Barely Staying Afloat"

Press Releases 5 Jul 2021

New research by FSB Scotland examines the current state of tourism and hospitality businesses in the Highlands & Islands.

A new FSB Highlands & Islands report finds that the eagerly anticipated staycation boom did not take place as soon as travel restrictions were lifted, leaving four in ten businesses struggling to generate sales and profits (42%), one in ten barely staying afloat (9%), and a quarter feeling pessimistic about their chances of surviving until 2022 (25%).
The FSB Highlands & Islands survey, conducted between the 25th of May and 4th of June, focused on tourism & hospitality businesses within the Highlands & Islands Enterprise area (Shetland, Orkney, Outer Hebrides, Highland, Moray, Argyll and Arran) and produced 290 responses.
It found that almost half of employers did not have enough staff to meet their needs (45%), which was resulting in cuts to opening hours and services offered to visitors.
The report calls on the Scottish Government to commit to a range of actions including withdrawing the need for physical distancing and self-isolation once most of the adult population is fully vaccinated. It also calls on the UK Government to pilot a remote visa for employers in the Highlands and Islands. 
A breakdown of the results within the HIE area reveals that the West was generally performing better than the East, the weakest performer was Shetland, and the best performer of all was the Northern Highlands – the area covered by the North Coast 500 (NC500). 
Commenting on the results the Federation of Small Businesses’ Highlands & Islands Development Manager, David Richardson, said:
“While the ambition has always been for the Highlands & Islands to have a truly mixed economy, the fact is that most of this vast region is dependent, directly and indirectly, on tourism. It sustains jobs and communities, and without its rich array of businesses and services the quality of life that we all enjoy would be greatly diminished. Tourism is everyone’s business, and it is in all our interests that it succeeds.   
“The fact that almost half of all tourism and hospitality businesses across the region are struggling is a matter of grave concern, and it’s no wonder that a quarter fear that they might not survive until 2022. 
“This is the time of year when these lynchpin businesses must build up the cash reserves needed to carry them through the long winter, undertake essential repairs and refurbishment, and start paying off any debts resulting from Covid loans. They simply cannot afford to be operating on ‘slow’.
“The lack of customers, especially overseas visitors, is a real worry and the sooner travel restrictions are lifted the better. 
“However, the concern that should be exercising minds most is staffing. Staff shortages have been a growing problem for years, even with a plentiful supply of EU workers, but now the situation is becoming critical. Hard-pressed businesses are struggling, and in many cases failing, to recruit people from wherever they can get them - locally, from the rest of the UK, or overseas – and four in ten have increased pay rates in a bid to improve recruitment and retention. Sadly, however, staffing shortages in tourism & hospitality are a national and international problem rather than something purely local, and solving the problem in the Highlands & Islands is going to be far from easy. 
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