Scott Wright: When will cost of holidaying at home become too much to bear?

IT would take a heart of stone to have not felt sympathy with Scotland’s tourism and hospitality industry during the tumultuous months of the pandemic.

To cover this story in the early months of the crisis was to be given a window into a world of despair.

People who had built strong and successful businesses over many years were suddenly faced with the risk of losing everything they had, almost in the blink of an eye. Their sense of worry and responsibility extended to the many thousands of people who depended on these businesses for their livelihoods.

There were interviews with senior industry figures over this period that will live long in the memory. A conversation with Roy Brett, owner of the celebrated Ondine seafood restaurant, ahead of fresh Covid restrictions in October will certainly be hard to forget.

Responding to the news that a 16-day shutdown was to be imposed on the hospitality trade in the Central Belt, in a bid to combat surging infection rates of coronavirus, Mr Brett said: “I had staff in tears, just broken. I have got young, talented professional people in my team.

“They are talking to me as young chefs and waiting teams and [asking]: ‘have we got a job. Are we going to get closed down?’ There is a genuine fear amongst the team that their time is coming.”

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The outlook for the industry nearly one year on is thankfully a good deal brighter, but there are other major problems to deal with.

An acute shortage of staff, attributed to an exodus of EU nationals because of Brexit, and the need for people to isolate due to the pandemic, has crippled operating capacity just at a time when businesses need to be firing on all cylinders. And the price of goods is shooting up because of deep problems in the supply chain, a ramification of Brexit as well as the pandemic.

These challenges are being heaped on top of an industry that is also carrying significantly more debt than it was before the pandemic, and which is continuing to be without the custom of business travellers and foreign tourists in significant numbers.

“The silver bullet for recovery is not the staycation market,” Stephen Leckie, chief of the Crieff Hydro group of hotels said recently. “It is a whole lot more than that.”

That said, there is no doubt the staycation market has provided a vital shot in the arm for Scottish tourism this year. Mr Leckie, who is chairman of the Scottish Tourism Alliance, acknowledged as much as he expressed sympathy for those in the industry who depend on overseas and business travellers.

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Domestic tourists have helped revive the finances of hotels and self-catering accommodation businesses across Scotland, as well as those of bars, restaurants and attractions in their eco-system, since the industry began to gradually re-open in late April.

Yet even here the industry must proceed with caution, for there appears to be growing concern over the prices now being charged for holidaying at home.

A report published last week found that the cost of private holiday accommodation in the UK has soared during the pandemic, rising by 41 per cent on average since 2019.

One area highlighted was West Dunbartonshire, a region covering Loch Lomond, where the average nightly price of private accommodation on Airbnb and Vrbo was found to be £114.75 in the week beginning August 23 – 49.4% higher than the same week in 2019.

The analysis, which was commissioned by Which? and based on data from rental specialist AirDNA, also found that it now costs hundreds of pounds more to holiday at UK destinations favoured by Scots than equivalent locations in Europe.

“Holidaying at home has always been expensive, but the situation has become far worse during the pandemic and it’s no wonder many people have felt priced out of a holiday this year,” said Rory Boland, travel editor at Which?.

“The reasons for these higher prices are complex, but it is hard to avoid the conclusion that some unscrupulous accommodation providers are charging over the odds.”

It is not only the cost of self-catering accommodation that has been attracting attention in recent months. The cost of staying in hotels in the UK, too, has been steadily rising during the pandemic – an inevitable consequence of the economics of supply and demand.

The ongoing travel restrictions which continue to make it complicated – and costly – to holiday overseas have led to a spike in demand for hotels and resorts on these shores.

It is also, of course, totally understandable for business owners to attempt to make up for the many months they have been unable to trade during the pandemic.

A vast amount of extra debt has been taken on during periods of lockdown while revenue has dropped like a stone, so the imperative to capitalise on consumer demand when it is there is inevitably strong.

And it is worth reinforcing that the costs facing hoteliers and self-catering accommodation providers have been rising sharply.

The well-documented problems in the UK supply chain are bringing not only scarcities of goods but also higher prices, and some operators may have no option but to pass those on to the consumer.

Then there are the ongoing labour shortages which are pushing up wage costs: stories abound of restaurants and hotels having to ramp up pay rates and bonuses in order to secure the staff they need, so competitive the labour market has become.

Such pressures will doubtless be extremely difficult to bear for many businesses that are struggling to get back on to their feet because of the massive disruption brought by the pandemic.

In that context, some price increases are surely unavoidable. But there is a balance to be struck.

Many consumers may have been willing to pay a premium price to holiday within the UK this year.

Having spent so much of the last 17 months cooped up at home, people have been desperate to sample freedom once more and have been flocking in recent weeks to the many glorious beaches, lochs, forests, towns and villages this country has to offer.

In time, however, foreign travel will return and once more be widely available. In many cases it will also be cheaper, while almost guaranteeing the warm summer weather that Scotland cannot take for granted.

The challenge for Scottish tourism and hospitality, therefore, is to continue offering great experiences – but at a price people are comfortable paying.

The Herald Scotland

The Herald Scotland

The Herald is a Scottish broadsheet newspaper founded in 1783. The Herald is the longest running national newspaper in the world and is the eighth oldest daily paper in the world. The title was simplified from The Glasgow Herald in 1992