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Hospitality sector still ‘fighting for survival’ as costs soar, MSPs warned

MSPs heard while pubs, hotels and other hospitality businesses may be busy, they face sharply increased costs (PA)
MSPs heard while pubs, hotels and other hospitality businesses may be busy, they face sharply increased costs (PA)

Several Scottish Government policies are hitting the hospitality sector while it is still “fighting for its survival”, MSPs have been told.

Groups representing tourism and hospitality businesses gave evidence to Holyrood’s Economy Committee on Wednesday.

They said that while business is recovering from the pandemic, companies are now facing sharply increased costs.

Committee convener Claire Baker asked the groups why they feel the sector still needs Government support when visitor numbers are rising and its economic value is increasing.

Leon Thompson, director of UKHospitality Scotland, said: “Whilst venues may be busy, the costs have just gone through the roof.

“Whilst turnover is high, there’s little profit for businesses that are making any profit at all.”

Colin Wilkinson, of the Scottish Licensed Trade Association – which represents pubs, hotels and restaurants, said planned legislation will also have an impact on the industry.

He said: “We’ve gone through the deposit return scheme, which I’m afraid to say was shambolic and really hit the industry who were doing their best to prepare for this. That’s going to be back in the limelight in 2024.

“You’ve got a tourism tax – I know it’s a visitor levy – that’s going to put extra burden on industry.

“You’ve got alcohol advertising restrictions, now I understand that’s going to be reduced in its scope from what we were expecting last year.

“These kind of things don’t help the industry – our sector is fighting for its survival.”

Marc Crothall, of the Scottish Tourism Alliance, read out an email he had received from an independent tourism company operator.

The email said the Scottish Government is “destroying any hope for growth” and the sector is being seen as a “cash cow”.

The SNP’s Gordon MacDonald said many of the concerns expressed were about policy areas under Westminster’s responsibility.

Mr Crothall said there is concern about the cumulative impact of several policies.

He went on to say some businesses are paying certain employees higher wages than their equivalents south of the border due to the different tax bands in Scotland.