SCOTTISH hotel and tourism businesses are seeing a dramatic fall in job applications from people in the European Union (EU), as sector chiefs warn the introduction of a tourist tax will undermine moves to boost Scotland’s appeal on the world stage.

The Scottish tourism industry has declared the uncertainty over the future rights of EU nationals to live and work in the UK is severely hampering the ability of firms to recruit the staff they need.

Speaking on the sidelines of a major tourism conference in Glasgow yesterday, Marc Crothall, chief executive of the Scottish Tourism Alliance, said one company that specialises in recruiting staff for roles in the sector has seen applications from the EU drop from 20,000 to 2,000 per month.

The comments come after Stephen Leckie, the boss of the Crieff Hydro hotel group of seven hotels, told The Herald that job applications from EU countries outside the UK have dried up. Applications from the EU dropped from 40 per of the Crieff total three years ago to 30% this year, with numbers continuing to slide.

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Mr Crothall said: “The uncertainty is costing business an awful lot of money. We have already experienced cancellations by European visitors [and] guests because of their own uncertainty as to what may play out.

“The workforce piece is probably the biggest concern for us – that lack of that of freedom of movement opportunity and, on top of that, what is being proposed in terms of the migration cap in the [post-Brexit immigration] white paper just does not play out well. We can hope to have an increased volume of people, but if we don’t have a workforce to supply them then that is also a challenge.”

Mr Crothall also observed that, while sterling’s weakness since the Brexit vote has made it more affordable for international guests to visit Scotland, it has raised the cost of imported goods and made wages less attractive for people coming to work here from overseas.

The STA boss was speaking on the sidelines of the Scottish Tourism Alliance Signature Sessions 2019, where Fiona Hyslop, Cabinet Secretary for Culture, Tourism and External affairs, defended the Scottish Government’s decision to consult on giving local authorities the power to introduce a tourism tax. Ms Hyslop said the commitment was given as a “necessary part of the agreement” with the Scottish Green Party which ensured the Scottish Budget was passed by Holyrood, claiming that had given “certainty and stability to taxpayers and business” amid the challenges posed by Brexit.

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Ms Hyslop had earlier told delegates that tourists were spending less per head on visits to Scotland despite visitor numbers rising, meaning there was a need to ensure the Scottish industry remained competitive on the world stage.

Asked whether that message was at odds with the tourist tax, which industry bosses argue will increase the impression globally that Scotland is an expensive place to visit, Mr Crothall said: “We would agree.”

Mr Crothall added: “We have to attract new markets, we have to be competitive, we have to be open and welcoming. We should be on the front foot of saying we have a low taxation system for tourism, [and] we welcome tourism.”

However, Mr Crothall said it was important to emphasise that the tourist tax would not come into effect either this year or in 2020, given the measure has yet to be passed by parliament.

He stated: “What we have heard today from the Cabinet Secretary is the tourist tax isn’t here yet, first and foremost. That is a message that needs to be made very clear to the wider world.”

Mr Crothall added: “The importance of demonstrating that Scotland is open for business, and there is no incremental tax to worry about right now, is really key.”

The tourism boss added that questions remain over how any tax would be levied, its implications for valued added tax and over the cost to business, which he said the industry has been assured will be examined in the current consultation.

He emphasised that, if local authorities are empowered to levy the tax, the industry will lobby to ensure it is applied consistently across the country.

And he warned that any council which proceeds with the tax as a mechanism to boost public finances “could seriously damage an economy that will drive continued growth and employment in their communities”.

Mr Crothall added: “Seventy-eight per cent of people who holiday and stay overnight in Scotland are from the UK, and 50% of those people are actually Scots. We already pay a lot of tax – now we are asking our own people to potentially pay more tax to stay in their own country.

“And that’s not just leisure visitors, that’s people who are here doing business.”

Meanwhile, Mr Crothall responded to criticism from the Women in Tourism (WiT) group that the STA had failed to attract enough female speakers for this week’s conference.

The WiT was reportedly angry that just four of the 15 speakers were female.

Mr Crothall said10 of the 25 speakers over the two days of the event were female, noting: “We are probably one of the most diverse industries in terms of gender balance.”

However, he said there does need to be more female leaders in business.