Business Focus: FSB Highland manager warns rising costs could damage recovering tourism sector
by David Richardson, Highland regional development manager at FSB
Life has been very far from easy for the business community in and around Inverness of late, and especially for tourism-dependant businesses, and the outlook is by no means assured for all.
At the start of June an FSB Highlands and Islands survey found that while just over a half of tourism and hospitality businesses in the Inverness, Moray, Badenoch and Strathspey area were doing OK or better, one in 10 was really struggling to stay afloat.
Two months later, in early August, a fresh survey found that two-thirds of Highland businesses were doing OK or better, but seven per cent were really struggling. So where are we now?
While trade appears to have picked up for many tourism businesses mid-season, the staycation boom has not made up entirely for the absence of almost all overseas visitors. Operators will be reviewing their finances and hoping that, supplemented where possible by late autumn and winter business, they have sufficient reserves to undertake essential maintenance, start paying off any debts, and carry them through to the spring.
Others will face different concerns, but whatever the case, the road ahead is uncertain.
Government support in the form of things like furlough and self-employed income support has come to an end, and utility and wages bills have risen generally too – in some cases substantially. Reduced income and increased costs mean increased prices for consumers, to which the VAT increase on tourism and hospitality from five per cent to 12.5 per cent must be added. The Highlands is becoming more expensive.
So, while we can hope for the return of greatly needed overseas visitors next spring, we must do everything possible to avoid a scenario where businesses are forced to introduce ever-higher prices for reduced services without having sufficient staff to make it all work. Poor value for money leads to serious damage to the reputations of businesses, areas and regions. With so much in the balance, it is imperative that governments – from Highland Council up – do nothing to add to businesses’ costs and woes.
