Jobs still at risk
Tourism fund ‘not enough to halt hotel closures’
Hotels have faced a tough time (pic: Terry Murden)
New support offered for struggling tourism businesses will not prevent hotels closing and jobs being lost, say industry leaders.
Finance Secretary Kate Forbes today announced a £14 million Hotel Recovery Programme to help to secure up to 3,000 jobs at Scotland’s larger hotels until the start of the summer 2021 tourism season.
Eligible businesses can apply for individual grants of up to £250,000 in addition to a suite of wrap-around business support and advice.
The programme will be jointly administered by the Scottish Government’s enterprise agencies and builds on the existing funding and support for tourism businesses through the Creative, Tourism and Hospitality Hardship Fund and the Pivotal Enterprise Resilience Fund.
VisitScotland will also deliver £1 million in grants to self-catering businesses that have not received any other Scottish Government COVID-19 support. Businesses that apply and meet the criteria will be eligible for a one-off £10,000 grant to support them through the winter season.
Marc Crothall, chief executive of the Scottish Tourism Alliance, said tthe funding package is welcome, but will not be enough to prevent many of Scotland’s hotels being forced into permanent closure which will result in many more thousands of jobs still being lost.
“Today’s announcement will be extremely welcome news, particularly for the hotels eligible for this support, many of which will have been unable to access grant funding to date,” he said.
“The £14m pot of cash whilst sizeable is however limited and there won’t be enough to support all the hotels that are in need of immediate financial support to help them survive, recover and maintain their previous staffing levels.”
UKHospitality also expressed concern that the programme is not sufficiently resourced to deliver the scale of support required by the hotel sector.
Executive director for Scotland, Willie Macleod said: “The £14m programme is a positive sign of intent, but it is going to be a drop in the ocean for the sector.
It must be hoped that this is an initial step in supporting these businesses and that further resources will be made available– Willie Macleod, UK Hospitality
“The reality is that any programme of recovery intended to keep hotels in Scotland open and staff in jobs, will need to be much bigger and much more wide-ranging. It must be hoped that this is an initial step in supporting these businesses and that further resources will be made available in the likely event that the programme is over-subscribed.”
UKH estimates that there are around 950 larger hotels in Scotland, with a rateable value over £51,000, which did not qualify for grants that were available to smaller businesses. Many were unable to access government-backed loans or the Hardship and Pivotal grants provided by Scottish Government. On average, hotels had to meet £60,000 each month during lockdown to cover fixed costs.
Mr Macleod added: “As the Government has identified, these businesses employ lots of people and support a long supply chain. A budget of £14m may mean that only 50 businesses, 5% of larger hotels, will be supported if each qualifies for the maximum sum. This is not enough to avert the crisis facing the sector.”
Tourism Secretary Fergus Ewing blamed a lack of borrowing powers for restricting what the Scottish Government can do to support businesses.
He said: “We recognise the important contribution the hotel sector makes to tourism and the wider Scottish economy, supporting approximately 46,000 jobs across the country.
“Scotland is home to many of the world’s iconic hotels and they, like much of the sector, have suffered considerably this year from the impacts of coronavirus. The Hotel Recovery Programme is a dedicated funding package designed to safeguard jobs in these establishments and offer some security until the new tourist season begins in summer 2021.
“The Scottish Government is doing everything in its power to support the tourism industry, however without significant borrowing powers at our disposal this action will always be limited.”
The Enterprise Agencies (Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise and VisitScotland) will begin taking expressions of interest for the Hotel Recovery Programme in late August.
Businesses that meet the criteria for the Programme will be eligible for both grants and a holistic business review with bespoke support based on their individual needs.
The Hotel Recovery Programme comprises £9 million in revenue and £5 million capital.
Applications for the self-catering support scheme will open in early August. VisitScotland will work with The Association of Scotland’s Self-Caterers (ASSC) to review applications received for the self-catering support scheme.
Further details and opening dates for both funds will be announced in due course.