Hotels and restaurants on brink, warns STA

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Job losses and business closures have been forecast over the coming months following research published by the Scottish Tourism Alliance.

It ran two surveys between June 16-21 asking hotels and restaurants about the impact of the two-metre rule on their viability long term.

Headline findings include:

Eighty three per cent of hotels said they would be financially unsustainable if they were required to trade at two metres without any additional government support beyond the next two months.

The STA said this could spark up to 25,000 job losses, just among those surveyed.

A total of 85 per cent of restaurants said their business would be financially unsustainable without any further government support from September. This could lead to circa 8,900, job losses, the STA said.

Eighty seven per cent of restaurants surveyed said they would lose more than half their business if they had to implement two metres.

The Scottish Tourism Alliance, the representative body for Scotland’s tourism businesses, said the surveys were designed to demonstrate the financial support needed to protect businesses from ‘total collapse’.

Of those responding to the survey, 69 per cent of hotels said that they were planning to reopen in July.

Eleven per cent had no plans to open under a two metre rule and five per cent are already open to people such as key workers.

Seventy eight per cent of hotels surveyed said they would lose more than 50 per cent of turnover with 11 per cent saying that they cannot afford to continue to stay open if physical distancing restrictions are not reduced, said the STA.

A total of 75 per cent of self-catering, B&B and caravan and camping parks  plan to open in July, according to the survey. Eleven per cent in this sector had no plans to open under two-metre physical distancing.

Marc Crothall, chief executive of the STA said it amounted to 85 per cent of hotels and restaurants in Scotland stopping trading if the two metre physical distancing rule remains in place for the next two months and no further financial support is forthcoming.

He said: ‘The figures reflect the many conversations we have been having with businesses across all sectors in the tourism industry for months and underline just how crucial the current review of the two-metre physical distancing rule is within the context of the health and economic crises.’

He said the industry welcomed guidance for reopening and fully supported measures to ensure the safety of employees, visitors and communities.

‘However, many businesses do not plan to open again with the two-metre rule in place as it’s simply not economically viable for them to do so.

‘Coupled with the expected slow recovery forecast, we expect a steady stream of job losses across the whole of Scotland over the coming weeks.

‘Also, as we all know, visitors will choose where to stay based on the tourism product available in that area and are unlikely to travel to destinations that have a limited product in the form of restaurants, visitor attractions and pubs.

‘This will have a direct knock-on effect on the current limited demand for accommodation in our destinations and the impact on our local economies and supply chain is likely to be severe.’

Tourism in Argyll & The Isles in 2019 amounted to 5.7m visitor days; 2.8 visitor numbers; £364m of direct expenditure by visitors and an economic boost to the area equivalent to £510m. Around 9,500 full time equivalent jobs depend on tourism, according to official figures.