Why the growing crisis in Scotland's £10bn tourism industry may engulf us all
The cost-of-living crisis, increases in National Insurance contributions and looming tourist taxes pose a real problem for a sector that is vital to Scotland’s economy
In 2023, tourists spent a total of £10.8 billion in Scotland, sustaining an industry that employs some 245,000 people – or one in 11 jobs in the country. So it should go without saying that, in troubled economic times, we must do everything we can to ensure the tourism sector not only survives but thrives.
However, giving evidence to the Scottish Parliament’s Economy Committee, leading industry figures painted a frightening picture of the reality for many businesses, warning variously of “really difficult”, “very, very challenging” and even “brutal” trading conditions.
Marc Crothall, of the Scottish Tourism Alliance, told MSPs that guests “share a glass of wine now, they are sharing a bowl of soup”, and that pubs and restaurants were “absolutely desperate to survive”.
Leon Thompson, of UKHospitality Scotland, said one business he had been talking to had made a £600 profit in the last year, adding “others are making nothing at all and are simply haemorrhaging cash”. And David Hope-Jones, of the South of Scotland Destination Alliance, said businesses were operating in a “punishingly hard trading space”.
Over-tourism complaints
The cost-of-living crisis still appears to be causing real problems with a significant decline in the numbers of domestic tourists, while the UK Government’s decision to increase employers’ National Insurance contributions was described as “a real hammer-blow”. Many Scottish hospitality firms also do not qualify for the 40 per cent business rates relief available to their counterparts in England and small companies here.
Furthermore, the sector’s financial problems could be made even worse by looming tourist taxes. After MSPs voted to give cash-strapped councils the power to introduce them, Edinburgh is set to bring in a 5 per cent levy from July next year.
Complaints about over-tourism have risen in recent years, with genuine concerns in places like Edinburgh about the effects of large numbers of short-let properties on house prices. However, as Thompson said, Scotland is hardly Barcelona or Venice.
Given the importance of tourism, it is vital that both our governments listen to those pleas of desperation or the pain they are experiencing may start to spread and we will all feel the pinch.
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