THE build-up to the UK Government’s Autumn Statement was characterised by an increasingly vocal campaign for action from ministers to provide support for the tourism and hospitality sector.
The travails of the sector and its hopes for backing from both the Westminster and Scottish Governments were highlighted in one of my Business Voices columns.
It followed the publication of a major survey from the Scottish Tourism Alliance, which while providing strong indications that foreign tourists were returning to Scotland in encouraging numbers showed that the all-important domestic market was continuing to toil.
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The STA survey found the number of people visiting Scotland from Europe has increased by 30% and from North America by 29% this year compared with 2022. However, when it came to the domestic market, which accounts for 65% of Scottish tourism, the survey reported a 16% fall in visitors from Scotland, and a 20% drop from other parts of the UK.
As to the reasons for this decline, the column stated, look no further than the cost-of-living crisis and spike in interest rates.
Respondents to the survey, which was carried out over two weeks from early October, observed that a range of economic factors were having a significant influence on choices made by domestic consumers. Some 83% said they believe the cost-of-living crisis was a barrier to people taking a holiday; 77% cited inflation (which remains stubbornly high) as a key factor; and 71% mentioned higher energy and fuel costs.
In the event, Chancellor of the Exchequer Jeremy Hunt did offer some support for the sector in the Autumn Budget, in England and Wales at least. Mr Hunt extended the 75% relief from business rates for the hospitality, retail, and leisure sectors south of the Border, leading hospitality groups in Scotland to urge First Minister Humza Yousaf to make a similar offer at the Scottish Budget in December.
READ MORE: Scotland tourism: 'Concerning' visitor trend hitting trade
The decision to freeze alcohol duty was welcomed, too, particularly by the Scotch Whisky Association which had mounted an extensive campaign for the tax to remain unchanged following a major hike implemented in August.
But there was disappointment in the Autumn Statement for the industry too, including with the decision to raise the standard business rates multiplier in England Wales in line with inflation. There was despondency, too, because the 2% cut in employee national insurance contributions was not matched by a corresponding cut in employer contributions.
Yet, although the industry does not have its problems to seek, there are operators which are continuing to thrive.
My report on the latest results from Apex Hotels showed that resurgent demand from the corporate and leisure markets had helped the Edinburgh-based firm hike profits and return revenues return to pre-Covid levels in its most recent financial year.
The family-owned company, which has hotels in Dundee, Edinburgh, Glasgow, London, Bath, and Perthshire, booked an operating profit of £14.5 million for the year ended April 30, up from, £2.9m the year before. Profits surged as turnover leapt to £74.8m from £47.3m.
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Chief executive Angela Vickers signalled the firm’s hopes of capitalising on its momentum with an acquisition strategy which saw it move into the rural market with a deal to buy the Pine Trees Hotel in Pitlochry – a “classic Scottish country house hotel” – for undisclosed sum in July.
“This year we have built upon strong foundations in 2022, with a renewed confidence in the market as demand from our UK and international guests returns,” Ms Vickers said. “Our ambitious acquisition strategy will help diversify and expand our portfolio, delivering more choice through a wider range of destinations for our guests.”
Canadian hospitality giant Sandman Hotel Group is also upbeat about the future. I interviewed the firm’s UK and Ireland director Mitch Gaglardi on the day it opened its first Signature Hotel in Glasgow, and he revealed plans are in place for further investment in Scotland. A site has been acquired next to Edinburgh Airport where Sandman plans to build its third hotel in Scotland, joining properties in Glasgow and Aberdeen.
Mr Gaglardi said: “We are certainly not done with Scotland. I think that Scotland is a great market. It has real welcoming people, it is a fantastic country, people want to come here. They want to stay here. It has all the ingredients that we need.”
Outside the hospitality sector, one story which appeared to catch the stock market by surprise was the bumper takeover of Hotel Chocolat by Mars.
Directors of the luxury chocolatier and retailer, which was founded 20 years ago, recommended that shareholders accept an approach from Mars that values the London listed company at more than £530 million. Shares in Hotel Chocolat surged by more than 160% on the day the deal was announced.
Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, said: “We know our brand resonates with consumers overseas, but operational supply chain challenges have held us back. By partnering with Mars, we can grow our international presence much more quickly using their skills, expertise and capabilities."
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