IT is difficult to believe now, but less than a year and a half ago there was concern that Glasgow had too many hotels.
As a seemingly never-ending procession of new builds were proposed, adding to the large stock of rooms already in circulation, there was worry in some quarters that the city had so many hotels it was becoming increasingly difficult for operators to compete.
The picture was crystallised by Nicola Taylor, the chief executive of Chardon Hotels, whose family owns six Holiday Inn hotels across Glasgow, Edinburgh, Perth and Dunfermline. Ms Taylor said she had “never seen such over-supply”, declaring at the time that “it makes for a future that can only be described as challenging.”
Sixteen months on, the situation could not be more different.
Hotels in Glasgow and across Scotland as a whole are locked in a battle for survival, only this time the enemy is not the proliferation of competition. It is the brutal, and in some ways unexpected, fall-out from the pandemic.
READ MORE: Scots tourism sector pours scorn on claims of ‘staycation boom
Hotels have belatedly reopened after months of lockdown, but many have done so laden with debt after long periods of enforced closure. There are reports of deep skills shortages and, crucially for the wider tourism industry, there is the continuing absence of international visitors to contend with.
In these circumstances, it was no surprise to hear one insolvency expert warn last week that as many as 10 per cent of Scotland’s hotels could ultimately be forced to close permanently by 2023, so acute are the trading conditions they face.
Although coronavirus restrictions have begun to ease, statistics show that occupancy levels remain critically low, especially in the major Scottish cities of Glasgow, Edinburgh and Aberdeen.
A survey published by the Scottish Tourism Alliance (STA) showed that 94 per cent of hotels in Scotland’s cities had an occupancy level of less than 50% in May. And it forecast things are not going to get better over the rest of the summer, with 98% of accommodation providers forecasting occupancy of less than 50% for June. The percentage expecting occupancy to be below 50% in July was captured at 87%.
The survey was carried out by the STA from May 3 to May 7. Should restrictions on international travel begin to ease, it is possible that occupancy levels could improve this summer. But that is a big if, especially given the unpredictability of coronavirus and its propensity to mutate into new variants.
READ MORE: Scott Wright: Does Glasgow really need more hotels?
Hotels are also having to contend with the continued suspension of the events industry, and as yet there is no sign of concerts and conferences resuming in Scotland.
“What is coming across loud and clear is occupancy levels are very, very low just now, compared to what they ordinarily would be at this time of year,” said Derek Forsyth, head of restructuring at accountancy firm Azets.
“The city centre hotels, particularly, rely on business travel [but] nobody is travelling, nobody is coming up from London or coming in from abroad for business meetings.”
Mr Forsyth rightly expressed worry about over the level of debt hotels across Scotland are now burdened with. Many businesses will have taken on additional borrowings to stay afloat during the months they were forced to close, which they will have to service and repay.
Hotels in Glasgow may well have further handicapped after the anticipated move into level two restrictions, originally scheduled for May 17, was abandoned at the eleventh hour, as concern grew over infection rates of the so-called Indian variant. Much-needed revenue was lost as hospitality operators were forced to absorb a wave of cancellations, and dispose of stock that was no longer needed.
Meanwhile, a serious skills shortage has emerged across the wider hospitality sector, notably for chefs. The end of freedom of movement between Britain and the European Union brought by Brexit has staunched the flow of migrant workers from Europe, who would traditionally work in Scottish hotels over the summer months.
Moreover, many people based in the UK have moved into other sectors after either losing their jobs in hospitality or finding themselves on furlough during the pandemic.
The shortage is so acute that hospitality companies are offering cash bonuses and gift cards to staff if they are able to recruit friends to fill some of the vacant posts. It has also been reported that the hospitality industry is campaigning for a “coronavirus recovery visa” to tempt back foreign workers who returned to their homeland during the crisis.
For decades, summer could traditionally be relied on by hotels in Scotland for the bulk of their annual earnings.
In these strange times, the old certainties no longer hold true.
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