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The British Hospitality Association Scotland ( BHA) welcomes the opportunity to comment on the Scottish Executive's Tourism Strategy Refresh.
The BHA has been representing the hotel, restaurant and catering industry for over 90 years. Some 3000 establishments in Scotland, across all sections of the industry, are represented by the BHA - not just group-owned properties, but also hundreds of individually owned hotels, restaurants and catering operations.
The BHA believes that, if the industry is to reach its target of 50% growth in tourism by 2015, a step change is required in the support the industry receives. The focus of the refreshed strategy should be on four priority areas. The four priority areas should be as follows:-
- Inbound transport capacity.
- Accommodation capacity.
- Recruitment and training of Scottish hospitality workers.
- Issues surrounding the tax/regulation of the Scottish economy.
Question 1 Is there more that can be done to improve the marketing of Scotland?
The correct marketing of Scotland is essential to allow the industry to grow sustainably over the next ten years. However, the new VisitScotland network created out of the ATB review is well positioned to build on the strong VisitScotland foundation to improve routes to market for tourism businesses in Scotland. Indeed, as a result the recent Scottish Executive spending review the investment in marketing Scotland is twice that spent on promoting England. The BHA perspective is that the marketing structures to facilitate sustainable growth in the coming years are being put in place, but that the focus must not be on marketing at the expense of skills.
We would add that one area requiring further attention is the development of a more coherent UK-wide tourism marketing strategy.
Question 2 What more can be done to meet the challenges of e-commerce?
The BHA fully supports VisitScotland.com and its continued development. However, it is up to the industry and market forces to lead the innovative use of ICT to respond to changing consumer demand, by customising services, and lowering marketing and selling costs. The increased uptake of e-commerce can be driven by the enterprise agencies offering support to companies to develop their IT and e-commerce infrastructure.
Question 3 What more can be done to raise our game and improve quality throughout the industry
Question 5 How can we overcome the problem of skills gaps?
Question 6 How can we improve recruitment and retention of staff in the industry?
The BHA supports the quality assurance work being carried out by VisitScotland and believes that the correct schemes are in place and that they should be allowed time to establish themselves.
Making a quantum improvement in quality is best addressed through the skills and recruitment gap. According to the Sector Skills Council for the hospitality sector, People 1 st, the 'sector has the second highest number of unfilled vacancies as a percentage of employment at 5.3%' (see table below). In addition, the main skills gaps have been identified in customer service, basic skills, generic skills and attributes, ICT, management/supervisory skills, multi-skilling and occupational -specific skills.
At present a significant proportion of the workforce in the Scottish hospitality industry are non- UK in origin. Research carried out by VisitScotland revealed that people come to Scotland for the scenery, Edinburgh and the Scottish people - so it is not good for the perception of the industry in Scotland if they find few Scottish people working in hotels. Currently, the Scottish hospitality industry is attracting many Polish people. However, Poland's expected economic growth of at least 4% per annum will result in better paid jobs, with fewer people moving abroad to obtain employment.
The Lothian Labour Market Statement 2004 showed that tourism plays a crucial role in the Edinburgh economy and that an additional 5000 jobs were expected to be created in the hotel and catering sector in Scotland. However, with continued low unemployment recruitment problems are exacerbated and a continued recruitment crisis has the potential to seriously damage the sustainable growth of the sector.
The industry recognises that it has to take a lead role in improving its attractiveness as a career option and that it must communicate better that the sector offers fast moving careers in many areas including marketing, customer service and hospitality management with excellent salary prospects.
However, the hospitality sector also needs to be promoted in schools as an attractive career option and the enterprise agencies must do more to provide the training required to address the skills gap - i.e. more support for vocational education to give colleges the resources to offer top quality food production and food & beverage service courses.
Question 4 Is there more which should be done to better join up public sector support for the industry
Support for the tourism industry should not simply come from the enterprise agencies. The whole public sector ranging from those responsible for business rates through to planning policy must buy-in to the importance of growing the tourism industry in Scotland.
The ambition to grow the industry by 50% by 2015 can only be met if capacity within the industry is increased considerably. There are many companies willing to put multi-million pound investments into Scotland to build the new 'Gleaneagles' or 'Centre Parcs'. However, the Scottish planning system means that any new applications for a development of a considerable size can get stuck for years. Furthermore, difficulties around planning are not restricted to new developments but also extend to alterations to existing premises.
According to figures produced by VisitScotland, Scottish hotel occupancy is 61% on average which rises to near 80% in August. A separate survey carried out by PKF of larger hotels estimates average occupancy at 70%. Based on the VisitScotland figures, Scottish hotel occupancy in people nights is about 27 million a year. Therefore, if the growth targets are to be met capacity would be required for an additional 13 million nights a year. According to figures produced for the BHA1 1743 bedrooms and resort lodges were opened in the 18 months to December 2004.
Therefore, if the tourism industry is going to be allowed to grow sustainably, planning must be viewed as a way of supporting progress not a way of preventing it. The tourism industry cannot allow itself to standstill in what is a competitive global market place. An enlightened planning regime can ensure the quality of hospitality businesses as well as the industry's buildings. The importance of the planning system to Scotland achieving its growth targets cannot be underestimated.
Tourism in general makes a major contribution to the UK tax yield, but much of this contribution is hidden within the yields obtained from taxes on goods and services purchased by both tourists and local residents. While many of the taxes that particularly affect tourism such as Air Passenger Duty are levied on a UK-wide basis they can have a disproportionate effect on Scotland as Scotland is more reliant on air travel. The higher level of non-domestic rates in Scotland disadvantages tourism businesses on a number of grounds. For example, it can sway the decision on where to invest in a new hotel from Scotland to England, and, costs in Scotland are greater, and margins are lower, which means that less revenue can be reinvested into capital projects or skills and training.
Given the importance of tourism to Scotland it is worth noting that the tourism industry in the UK is not competing on a level playing with our European Competitors as the rate of VAT levied on hotel accommodation and other tourist businesses at 17.5 % is higher than in almost any other EU country.
As outlined above, increasing capacity is a major issue for the tourism industry if it is to meet its growth targets. The Scottish Executive or enterprise agencies could stimulate increased tourism activity in the tourism industry, for example, by offering lump sum grants towards capital investment.
In addition, the costs associated with hospitality businesses continue to rise inexorably, whether it be wages as a percentage of turnover, high water rates in comparison to other parts of the UK, or significantly increased insurance premiums. The costs of doing business continue to rise, damaging the ability of the sector to grow and compete globally.
Question 7 What else can be done to improve access to Scotland, particularly to remoter areas?
The priority in relation to transport has to be on getting tourists into Scotland. It is clear that the plans to extend Edinburgh Airport outlined in the UK Government's "Future of Air Transport" White Paper will be required if the sector is to grow in Scotland.
Quite simply a tourist needs to be transported to the eventual destination and back. In recent years, demand from tourism has been one of the driving forces behind the expansion of transport links. The ability of a tourist to travel to Scotland efficiently and by their chosen mode of transport is crucial. However, it is not just a question of having good transport links to get tourists into Scotland, but having the correct infrastructure in place that can 'disperse' tourists throughout Scotland.
The proposed Edinburgh and Glasgow airlinks will play an important role in integrating the airports with the rest of the transport network which is vital to the tourism industry. In addition, the continued Executive support of the route development fund is welcomed in attracting new flights into Scotland. Good transport links whether through budget airlines, road or the Zeebrugge ferry is crucial when it comes to influencing the destination choices of tourists.
While encouraging work has been carried out by the Scottish Executive further work on improving the transport infrastructure is required to make it easier to disperse tourists out of the gateway cities of Edinburgh and Glasgow to the more remote areas of Scotland.
1 Source: Wordsmith & Co