THE Scottish tourism industry has called for “meaningful intervention” over working visas and immigration policy to boost the availability of staff, as a new survey underlined the sector's “continued fragility” due to the effects of Covid and the cost of doing business crisis.

Stephen Leckie, chairman of the Scottish Tourism Alliance, declared that staff recruitment “continues to be a serious challenge” following the UK’s departure from the European Union, which choked off a crucial supply of labour from the continental mainland.

The warning came as a major survey carried out by the STA found that more than half (52%) of tourism and hospitality firms are still in “survival mode” or “consolidation”, highlighting the ongoing fragility of the sector.

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Only 1% of respondents said their business was ready to expand while 16% said they have no cash reserves; just over one-third (34%) have only one to three months of reserves.

The survey found the biggest barrier to recruiting and retaining staff was a lack of available candidates who want to work in the industry, highlighted by 31% of respondents, followed by Brexit and the immigration system (26%). Perception of the tourism and hospitality industry was highlighted by 25% as a factor making it difficult to recruit, closely followed by the remote or rural location of businesses, which was cited by 24%.

While 64% of the 540 businesses surveyed said they were operating with the staff need to operate effectively, the STA noted that most of the responses came from self-catering businesses, which require fewer staff.

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The STA survey was published a day after Bill Costley, the renowned Scottish chef and hospitality operator who founded Ayrshire hotel firm Costley & Costley, underlined the difficulty faced by the industry in accessing staff.

Mr Costley told The Herald on Wednesday: "There is a dearth of talent in the industry, there is no doubt about it. There are not enough people to go around. If you want really professional staff, you have to pay through the nose for them. We hope we are at the top end, and at the top end you need to be consistently good, that is for sure.”

Mr Leckie, who is chief executive of the Crieff Hydro Family of Hotels, said today: “The survey results very much echo what I’m seeing and experiencing as a business owner. Recruitment continues to be a serious challenge from my point of view; the removal of a significant part workforce as a result of Brexit is curtailing the ability of businesses to operate with a full service, deliver the experiences we would wish to and invest in our product with the ambition we hold.

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“The continued cost pressures on tourism and hospitality businesses combined with the constraints around operations as a result of the recruitment crisis greatly diminishes the profitability of businesses in our sector, the quality of experience, our competitiveness as a destination and therefore the long-term outlook for Scotland’s tourism and hospitality industry.

“We urgently need a meaningful intervention in relation to working visas and immigration policy to give businesses that essential opportunity to grow and deliver much stronger benefits to our communities and Scotland’s economy.”

The STA survey emphasised concern in the tourism industry over the weight of red tape, with 59% stating new and impending regulation should be paused. Nearly half (49%) said they do not support the introduction of a transient visitor levy, more commonly known as a tourist tax.

Some 45% said the tourism and hospitality sector should receive from relief business rates.

On the trading outlook, 41% reported that they currently have fewer bookings for June to September compared with the same period last year, though an equal proportion said they were either ‘confident’ or ‘reasonably confident’ their level of confirmed bookings will increase before or during the summer season.

But looking ahead to forecasts for October to December, more than half (51%) said they feel ‘fairly’ or ‘very pessimistic’ about the outlook. The STA noted this was likely to be down to the ongoing energy crisis and rising cost of living, which are expected to hit the sector hard again this winter.

Marc Crothall, chief executive of the STA, said: “There has been a strong response to the survey, particularly from the self-catering sector which reflects the current climate of concern around the impacts of proposed legislation.

"It is also clear from respondents across other sectors that businesses continue to experience significant challenges, however, pleasingly there is an increase in customer demand and subsequently, a renewed feeling of optimism within sector.

“The reality is that healthy trading is all about the bottom-line performance of the business; while revenue may be strong for many businesses, the key to commercial success lies in the ability of that business to convert profit into sustainable recovery and growth.”

Mr Crothall added: “A holistic review of the current regulation and taxation environment is just one key action needing to be undertaken now before more damage is done to the sector, as a result of a multiple of consequences.

“The Regulatory Review Task Force must act quickly. The recommendations currently being developed by the New Deal for Business core and sub groups when finalised must also be endorsed and acted on quickly to not only help protect business failure, but importantly to improve Scotland’s economic conditions, performance and to create a better environment to do business.

"I very much hope that the work of these groups will lead to the delivery of more positive economic benefits for Scotland, which will see us able to compete far more effectively as a global tourist destination.”