Latest tourism industry findings “paint a troubling picture”, the boss of VisitAberdeenshire said on Thursday.
One in three tourism businesses in Scotland fear they could close in the coming year according to a survey carried out by the Scottish Tourism Alliance (STA).
The STA survey received 1,335 responses across all but one of the local authority areas in Scotland.
More than one-third (35.9%) of the respondents said their business was either quite likely (27.9%) or very likely (8%) to fail.
Critical summer period for businesses
VisitAberdeenshire chief executive Chris Foy said: “The findings… are borne out by Aberdeen and Grampian Chamber of Commerce (AGCC)’s survey earlier this week and paint a troubling picture as we head towards spring and the critical summer period.
“Any measures that help to restore consumer confidence and reduce cost burdens on business will be welcomed as tourism suppliers look for the stability from which they can trade their way out of the current situation.”
AGCC found more than three-quarters (76%) of the 170 north-east businesses that took part in its survey said the Scottish Government was not balancing health and economic harms correctly with its Covid-19 policy.
A total of 42% of firms warned they may have to cut staffing levels if restrictions continued beyond next Monday (January 17), with almost one-third (31%) saying there was either a moderate or high risk their business could collapse.
Funding to help tourism sector
The government yesterday announced £9 million of funding for the tourism industry to counter the “severe economic impact” of the Omicron variant.
It will be split between affected businesses across the tourism sector, with coach operators, day tour operators, hostels, inbound tour operators and visitor attractions all eligible for help.
STA chief executive Marc Crothall welcomed the funding but said it was unlikely to “touch the sides” for most firms.
He added: “The strength in the number of responses to the survey shows just how anxious tourism businesses are to communicate the level of deep financial pain and commercial instability they’re experiencing as a result of the recent measures introduced and, of course, the dip in consumer confidence in line with public health messaging.
“Emergency financial support from the Scottish Government has been hugely welcomed by the sector, including the announcement of a further £9m.
“However, for the vast majority of businesses, this won’t touch the sides of what is evidently a gaping chasm between business failure and any sense of stability.”
Rising utility costs cause for concern
The STA survey also found 68% of respondents were in financial difficulty, citing extreme concern over increased costs, particularly with utilities, reduced revenue or a combination of both as contributory factors.
More than half (52%) said they had been impacted by staff shortages over the survey period, the majority being in the hospitality sector.