Over 400 delegates attended on the day with 12 guest speakers, and there were some important takeaways for the industry.
Scotland’s economy performed better than expected in 2023, proving to be resilient and avoiding the shallow recession that some had forecasted. Combined factors of high inflation and rising interest rates have meant that a revised 0.7% growth forecast has now been suggested for 2024.[1]
The Scottish Government have announced that they are to freeze council tax at current levels until April 2025 in a response to the current cost of living situation, an issue which is affecting tourism and the travelling habits of the population.
The travel and tourism market in Scotland has rebounded since the Covid pandemic. In the year up to June 2023, record levels of inbound spending were recorded in Scotland, and the recovery of inbound visitors was faster in Scotland than in the other regions of the UK.[3]
In 2022, £10bn was spent on tourism in Scotland including overnight trips from outside of the country, domestic overnight trips and domestic day trips.[2] Roughly half of the overnight domestic trips by tourists were from people living in Scotland, however £6 in every £10 spent was by visitors from England. For overseas tourists, visitors from the USA made up the highest percentage of foreign travellers.[3]
Of those people still willing to travel or take a holiday in the current financial backdrop, 41% of Brits planning a holiday in the next 3 months state ‘family time’ or ‘time with partner’ as the main reason for travel. 33% state the reason is ‘to have a rest’ and 19% to ‘spend time with friends’.[3] The motivations show that the reasons are less to do with features of the destination and that people are travelling to meet personal needs.
Scotland’s internal demographics are forecast to change in the coming years which will affect domestic travel and tourism from within the country. With the number of children (aged 0-15) projected to decline and an ageing population set to increase[4] there will be more people with a long-term illness, disability or impairment and businesses will need to adapt in order to be more accessible to this age group.
56 Degree Insight are a full-service market research agency specialising in travel and tourism research. At the STA Conference they presented the findings from their recent Sottish tourism survey.
The survey found 55% of tourism to Scotland in 2023 came from domestic markets and that these markets have declined slightly more than the overseas markets have picked up, leaving an overall reduction. Rising costs (significantly in energy, suppliers and staffing) and tighter spending shows that profit levels have fallen amongst 43% of the businesses surveyed (58% amongst pubs and bars). This has also resulted in investment levels falling.
However, despite the challenges, over half of the businesses including in the survey reporting to be performing well, leaving 14% either performing poorly, or having to close down. 12% of business have no cash reserves and a further 27% only enough to last for one to three months.
For those providers where occupancy levels have remained similar to previous years, there are still challenges. 49% said that booking lead times were shorter than pre-pandemic and that many guests were choosing to wait until the last moment and book only one to four weeks in advance. This affects the entire supply chain with businesses having to make last minute decisions on ordering, and with attractions being unsure which months to open.
The three highest contributing factors to impact on consumer behaviours that affected Scottish Tourism were all financial: rising cost of living, inflation and increasing fuel bills. After finances came the subject of travel disruption. It appears consumers have been reacting not only to the volatile nature of the economy before booking, but also to the possibility of travel strikes and journey disruption.
After an overview of the challenges facing Scottish tourism, we heard from the Scottish Tourism Alliance about some key insights for the future.
Scotland Outlook 2030 is the national tourism strategy for Scotland, launched in March 2020. Under the banner ‘responsible tourism for a sustainable future’ its vision is for Scotland to be the world leader in 21st century tourism.
The strategy has four strategic priorities:
It features a model for sustainable growth and collective ambition, where sectors come together to put communities, people and the environment at the heart of future plans. The model’s focus on sustainability matches with the future needs of consumers according to the Future Travel Trends survey and will be a key point for consideration moving forward.
What do the strategies mean for businesses?
The priorities of the strategy suggest ways in which Scottish tourism businesses will be positively impacted.
Firstly, “Our diverse businesses” prioritises supporting businesses to become more entrepreneurial, agile and resilient whilst putting measures in place to help businesses commit to sustainable practices.
Secondly, “Our passionate people” highlights the commitment to ensure Scotland have sufficient people to create a workforce which will meet the requirements of the 21st Century workplace.
Next, “Our thriving places” focuses on the dedication to ensure places across Scotland can develop and manage tourism in an effective and responsible manner.
Finally, “Our memorable experience” demonstrates the commitment to nurture Scotland’s tourism assets which will deliver high quality memorable experiences for visitors. Additionally, visitors will be encouraged to explore more of Scotland throughout the year, ultimately, having an overall positive impact to business owners in Scotland.[6]
The partnership which The Cumberland enjoys with the STA enables us to support hospitality businesses across Scotland and to allow them to thrive both in the present and for years to come.
Visit our website to find out more about hospitality lending and discover how we could support your business to grow.
NOTE: All facts sourced from the STA Autumn Business Survey 2023 unless individually referenced.
[1] Source: fraserofallander.org
[2] Source: scatteredclouds.co.uk
[3] Source: VisitBritain
[4] Source: NOMIS
[5] Source: all information in this section sourced from the How’s Business? 2023 Industry Survey
[6] Source: Scotland Outlook 2030 Responsible Tourism For A Sustainable Future