Scottish tourism sector in 'fight for survival' amid economic slowdown

Significant parts of the Scottish economy face worsening conditions due to the pandemic before restrictions are set to ease this year, according to the Scottish Chambers of Commerce (SCC) Quarterly Economic Indicator (QEI).

Scotland’s largest business network called on the UK and Scottish Government to put in place a sustained programme of business support, particularly for the hardest hit sectors, to support economic recovery throughout 2021.

Tim Allan, president of the Scottish Chambers of Commerce, said that in the tourism sector, a number of businesses faced "devastation" until vaccines mean they can return to as normal trading as possible.

He said: “Last year was the most challenging year in living memory for many of us. In addition to the risk to health we all face as a result of Covid-19, restrictions imposed have created an ongoing recession and a jobs crisis which will likely take years to recover from.

“We were hoping 2021 would be a better year than 2020 but it seems it is always darkest before the dawn. We fear the restrictions that have been imposed to prevent the spread of the new variant of the virus will continue to destroy more jobs and businesses unless government support can ease the impact of closures and deliver an environment to enable economic recovery."

Mairi Spowage, deputy director at the University of Strathclyde's Fraser of Allander Institute, added: “We have discussed for some months the prospect of a 'K-shaped' economic recovery in Scotland. This is the idea that different sectors have been impacted very differently by the lockdown measures and have experienced divergent pathways in recovery.

“We can see from today’s survey results that hospitality and tourism in particular has been badly impacted, with further lockdown measures likely to cause more hardship for the industry. Other industries, such as construction, have been able to adapt to the restrictions they face and operate almost at full capacity, but possible announcements on further restrictions for this sector are likely to act as a new blow. The length of any new lockdown on construction will be key to the ripple effects this has for the wider economy."

On tourism, the Scottish Chambers of Commerce said the government had to take a "long hard look" at supporting the sector or risk setting it back decades.

Meanwhile, it called for a planned return to safe and sensible office working to help boost businesses in financial services as well as ailing city centres.