Date set for return
Macdonalds threat to 1800 jobs as tourism gets restart date
Fergus Ewing: calling for VAT review (pic: Terry Murden)
Another hotel chain announced that hundreds of jobs could be axed just hours after an announcement that Scotland’s tourism industry will be back in business from 15 July if the Covid crisis allows.
Tourism Secretary Fergus Ewing announced the planned date for the reopening of the sector, including pubs, hotels and restaurants, and said he was in talks with the UK government over possible VAT relief.
He unveiled a new Scottish Recovery Tourism Taskforce to look at the sector’s needs, and the development of a new domestic visitor marketing campaign.
Tourism business groups welcomed the announcement but called for a relaxation of the two-metre rule to make reopening viable and a speeding up of grant support amid reports that failure to secure funding has forced some firms to close.
The announcement came ahead of an announcement by Macdonald Hotels, that it could cut 1,800 jobs due to a fall in custom during the coronavirus lockdown.
The Bathgate-based group has 31 hotels and resorts throughout Scotland and England and has begun issuing consultation notices to its 2,299 employees.
Group deputy chairman Gordon Fraser said: “Our monthly cash outgoings are still running at £2 million while we are forced to remain closed. Even after cutting all non-essential spending and with senior management and our remaining staff accepting reduced salaries, the current situation is simply unsustainable.
“There is no realistic prospect of us returning to anything approaching normality for the foreseeable future and, whilst its enormously regrettable, we simply must take these steps to ensure that we have a meaningful business when this situation ends, enabling us to bring back as many of our employees as possible.”
Macdonalds is the latest in a number of other hotel groups that have ceased trading or announced they will be forced to make large scale redundancies, including the Crieff Hydro chain and Apex Hotels. Staff at the Kimpton Blythswood Square and Grand Central hotels in Glasgow were told they are at risk of redundancy as luxury operator InterContinental Hotels Group (IHG) moved to restructure its teams in Scotland. Seven hotels in the Specialist Leisure Group in the Highlands and Borders have ceased trading.
Mr Ewing said: “The coronavirus pandemic has presented challenges across the entirety of the Scottish economy, but it is very clear there are exceptional circumstances facing this sector that must be recognised.
Tourists may start to return in July (pic: Terry Murden)
“We have acted as quickly as we can to address the significant financial challenges faced by businesses and provide a comprehensive package of support.”
The taskforce is in addition other measures specific to the tourism and hospitality industry such as a full year’s non-domestic rates relief and grant schemes which are not available elsewhere in the UK.
Mr Ewing said efforts were being stepped up to encourage more support from the UK government.
“We are also pushing the UK Government to do more, including a review of VAT rates and to consider extensions to schemes such as the Coronavirus Job Retention Scheme,” he said.
“I’ve been engaging with businesses since the beginning of the outbreak and I have heard their calls for more clarity which today I can provide.
“Businesses should start to prepare for a provisional return to trading – with appropriate safety guidelines – on the 15 July 2020.”
However, while advising firms to prepare, he cautioned against expectations that this date was firmly fixed.
“This date cannot be definitive and is conditional on public health advice and progression to Phase 3 of the route map,” he said.
“Businesses must now use this time to satisfy the necessary regulations and adapt to the new way of living.”
Membership of the Scottish Tourism Recovery Taskforce is being confirmed and more details will follow.
Tourism and Hospitality safer workplace guidance is due to be published shortly.
Andrew McRae: ‘opportunity to salvage the season’
Andrew McRae, Scotland policy chairman at the Federation of Small Businesses, said: “With these new details about when they’ll possibly re-open, small accommodation providers can start making the necessary preparations.
“That gives these firms an opportunity to salvage a share of their summer season. Ministers have made a sensible decision by releasing this information.
“But Scottish tourism isn’t just a bed for the night. Other businesses in the visitor economy – such as tour guides or local galleries – can now start making decisions about how and when they should re-open.”
UK Hospitality executive director for Scotland, Willie Macleod said: “It will take time, weeks in some cases, for businesses to get back in working order, communicate with customers, handle bookings, arrange staffing and order supplies, so this lead-time is very helpful.
“Businesses will need ongoing support – many to see them through to the Spring of 2021.”
Colin Smith: ‘continuing to push for support’
Colin Smith, chief executive of the Scottish Wholesale Association (SWA), the trade association for Scotland’s food and drink wholesale businesses, said: “Some of our food service members lost 90% of their income overnight and even now they are losing more than 60% of their turnover.
“Until we know whether the Scottish Government will be relaxing the two-metre social-distancing measure there will be huge concern about the viability of the hospitality and tourism sectors and all the supply chain businesses which rely on them.”
He added: “The Scottish Wholesale Association will continue to push for financial support, including business rates relief and grant funding for wholesalers – the majority of whom have received no Scottish Government financial support so far.”
Scottish Licensed Trade Association (SLTA) managing director Colin Wilkinson said: “We welcome the Scottish Government’s announcement that Scotland’s pubs, bars, hotels and restaurants will reopen on July 15.
“But the main question now is what the social-distancing parameters will be.
“The SLTA and other industry bodies have asked the Scottish Government to give serious consideration to reducing the current two-metre parameter as we have seen in other countries and to bring the level in line with the World Health Organisation.
“If the current distancing measures are maintained, normal capacities could be reduced by between 60% and 80%, and each business will need to assess the practicalities, cost and viability of complying with the new guidance.”
In addition, the SLTA has welcomed the efforts of the Scottish Government to seek a VAT reduction for the hospitality and tourism sector.
But he said funding support was still not reaching many businesses that need it.
“We must see a greater increase in the number of successful applications – industry research shows that as of last week, only 14% of applicants have been successful with their applications for these grants, the rest either having failed or are still waiting to hear,” he said.
“These businesses need that support now and all business will continue to need ongoing support if the industry is to survive and rebuild.
“Already we hear of business closures and redundancies within the industry and if businesses and jobs in the hospitality and tourism sector are to be saved, support must be given now. Time is of the essence and the clock is ticking too fast for too many.”
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