DAVID RICHARDSON: Cost of living crisis is now impacting on staycation bookings

David Richardson, of the Federation of Small Businesses, on the latest challenge to face the hospitality sector.

The good news is that we’re back to normal – businesses in Caithness & Sutherland are enjoying their first summer trading without any restrictions since 2019, and their customers are unrestricted too. So, can business owners sit back and relax while listening to the merry kerching of their till drawers opening? Certainly not, for even in ‘normal’ times few ever have the opportunity to truly relax, and things are very far from normal now.

Many firms have greatly depleted cash reserves thanks to the pandemic, and some took on debt to survive; many are facing shortages; all are seeing their costs shoot up, especially energy; and staff shortages have become endemic. Indeed, mirroring our FSB Highland research, a new Scottish Government report states that 64.7% of businesses with 10 plus employees in the accommodation & food sector (mainly tourism & hospitality) experienced difficulties recruiting staff in April. And it’s not solely down to a lack of accommodation, for some Highland businesses that provide staff accommodation with jobs are failing to attract any candidates even for interview.

Of course, a bumper staycation tourist year would really help, but as things stand 2022 is not going to be a bumper year. Indeed, most operators that I speak to are disappointed with the year to date, something true for hotels, self-caterers and activity providers alike, and the picture is not a great deal brighter looking forward. We must hope that things change soon and that last-minute bookings flood in.

The problem is that it’s not just businesses that are being squeezed. As we all know, inflation is hitting everyone’s pockets and every penny is a prisoner as a result. Vehicle fuel prices are rocketing, Highland holidays are becoming ever more expensive by the day, and some people will inevitably be thinking twice before heading north.

We all expect governments to do all they can to alleviate the situation and get the economy back on track, but we can and must play our own parts in keeping the beating hearts of our communities – small, independent businesses – alive by supporting them. We really are all in this together!

David Richardson is Highlands and Islands development manager for the FSB.

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