Blackford steps in as Highland hotels face winter of discontent

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Concerns from a Skye hotelier have prompted Ross, Skye and Lochaber MP Ian Blackford to appeal to chancellor Rishi Sunak to freeze the rate of VAT at five per cent for another year to help Highland businesses survive the winter.

The goods and services payment rose from five per cent to 12.5 per cent at the weekend following a temporary reduction for the hospitality industry introduced last July.

The SNP Westminster Leader said: ‘There is a cost crisis that is building from an increase in VAT and national insurance that the hospitality industry will struggle collectively to deal with.

‘One hotelier has told me they are facing a 20 per cent increase in costs.

‘I am appealing to the chancellor Rishi Sunak to reverse the VAT increases and to freeze the rate for another year. A failure to do so risks sending businesses to the wall.’

The MP’s comments follow a warning from Skye hotelier Anne Gracie Gunn that the ‘double whammy’ of Covid-19 and Brexit could shut hotels across the Highlands and Islands unless the government intervenes.

Ms Gunn, who owns the Sonas Collection of boutique hotels on the Isle of Skye, said hospitality businesses face an uncertain future after a summer of low occupancy rates and chronic staff shortages.

Usually, her three hotels – Duisdale House, Toravaig House and Skeabost House – attract international visitors all year round but Ms Gunn plans to close this winter in a bid to protect her business.

‘Brexit is killing us with staff shortages,’ she said, adding that, for many, the weekend’s VAT rise is ‘the straw that has broken the camel’s back’.

A survey by the Federation of Small Businesses has revealed that 42 per cent of businesses are struggling to generate sales and profits, with nine per cent barely staying afloat and 25 per cent pessimistic about their chance of surviving into 2022.

‘I know of many hotels that will close for the winter,’ Mr Blackford said. ‘They have no option if they are to survive. The expected staycation summer boom for 2021 has not materialised to the extent that some expected.

‘Many of the hotels I have spoken with have had summer occupancy rates down 20 per cent on 2019 levels. Put simply, many are loss-making now – even before having to negotiate a difficult trading environment in the winter.

‘Hotels and restaurants closing over the winter affects the wider supply chain, local suppliers, butchers, fish mongers, fishermen and crofters.

‘We may be facing a long dark winter. The chancellor must listen to the hospitality industry.

‘As Ann Gracie Gunn has said, Brexit and Covid are killing the industry. I am deeply worried hotels will close for the winter and some may not be in a position to re-open.’

Photograph should be in Fort 2021 Week 29 dated folder (NO_F29_IanBlackford_OSH_SkyeVisit1.jpg)