Scott Wright: The revival of outbound travel spells hard times for the Scottish tourism industry

THE long queues and flight cancellations that have become commonplace at UK airports in recent days will be hard to stomach for holidaymakers desperate to travel overseas. Especially for those vacationers who are traveling abroad for the first time after more than two years.

Airports have struggled to keep up with the huge spike in demand following the easing of coronavirus restrictions as staff shortages led to widespread disruption to travel plans. And as Easter approaches, there are no immediate signs that the chaos is ending.

That people are so keen to return to preferred destinations abroad is understandable given the sacrifices so many of us have made since the March 2020 pandemic. But the revival of outbound travel could well have less than positive consequences for one of Scotland’s most important industries, on top of the inconvenience it currently poses to travellers.

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Whilst the Scottish tourism industry has seen tremendous upheaval since the outbreak of the pandemic, tourism companies have capitalized on people’s inability to travel abroad during periods where restrictions have permitted.

The last two summers have seen a huge surge in staycations as people took the opportunity to holiday in their own country when access to popular destinations in mainland Europe and beyond was significantly more restricted due to travel restrictions .

This has provided a key source of income for thousands of Scottish tourism and hospitality businesses that have been in long-term cold storage during the lockdowns of 2020 and 2021, although the staycation trend will not have fully compensated for the lack of overseas visitors .

Now that people in Britain can travel abroad more freely, it seems inevitable that staycationers, who have been content to holiday in Scotland and elsewhere in the UK for the past two years, will want to broaden their horizons yet again.

Of course, this was something the Scottish tourism industry struggled with for decades prior to the pandemic, particularly in an era of cheap flights. In one sense, then, the fight for business against package holidays abroad is nothing new.

These are not ordinary times, however, and it could be argued that in the wake of Brexit, Covid and now the war in Ukraine, the complexity and range of challenges now facing the Scottish tourism industry are unprecedented.

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When Brexit ended the free movement of people between the United Kingdom and the European Union in January 2020, it seemed like a difficult task for the industry. Previously, thousands of European nationals had flocked to Scotland to work in the sector.

But conditions in the labor market became even more difficult when the pandemic hit. The crisis saw British hospitality workers of European descent returning to their home countries on the continent, leading to deeper staff shortages which combined with Covid-enforced absenteeism meant businesses were operating at less than full capacity.

Entire floors in hotels have been closed and opening hours in their bars and restaurants have been restricted, while city and inner-city pubs have decided not to open on certain days as staff shortages coupled with lower footfall make it unprofitable to run all of them Time.

As Covid infection rates remain high, the impact of staff shortages is being felt across the economy in businesses across a range of sectors, not just hospitality but also retail and housing. Kate Nicholls, chief executive of UKHospitality, told The Times last week: “The situation is not as serious as it was last summer or in the run-up to Christmas, but absenteeism is increasing and creating challenges.”

The challenge of staff shortages in recent months has been compounded by a pervasive disruption in global supply chains that has pushed up the cost of food and beverages, and in recent weeks after Russia’s attack on Ukraine, a worsening energy crisis has all have pushed up inflation, exacerbated to levels not seen in a generation.

With the Bank of England forecasting inflation to rise to 8% later this spring, it means businesses in the tourism sector will have to find some way to remain attractive while dealing with rising costs and the return of package holidays can compete overseas are now so tempting for consumers.

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And it’s not as if vacationing in the UK came cheap to begin with. A study published by consumer protection agency ‘Which?’ last summer found that short break prices in leading UK holiday destinations were in most cases more expensive than in similarly popular resorts abroad, while an analysis by AirDNA comparing the prices of thousands of Airbnb and Vrbo-listed properties combined revealed the price of vacation rentals had risen above pre-pandemic levels.

Now, amid a cost of living crisis that is disgracefully pushing more people into poverty, Scotland’s tourism industry needs to attract holidaymakers and find easily cheaper ways to get away at a time when consumers are increasingly money-concerned the continent.

Of course, British holidaymakers make up the bulk of the tourists Scotland attracts, and it’s likely to remain so. It will take time for overseas visitor numbers to Scotland to return to pre-pandemic levels.

But that doesn’t mean people who’d rather spend their breaks on these shores can’t necessarily book a UK holiday this year.

People haven’t faced such high cost of living pressures since the early 1990s.

In the coming weeks and months, households will review their budgets and decide what they can and cannot spend their money on.

Discretionary spending, including holiday spending, will come under scrutiny and this could lead people to conclude they don’t have enough money to get away this year.

Against this deeply challenging backdrop, the Scottish tourism industry must find a way to continue its recovery from the darkest days of the pandemic.

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