Fears for hotels after support fund ‘heavily oversubscribed’
WARNINGS have been issued that Scotland’s hotel sector could be on the risk of collapse after a government package of support was “heavily oversubscribed” and was only expected to help around 60 businesses.
Almost 300 hotels have applied for emergency funding as part of the Scottish Government’s hotel support programme.
But Tourism Secretary Fergus Ewing has confirmed that the £14 million pot of money was only intended to help around 60 hotels to cope with the economic onslaught caused by the pandemic.
Scottish Labour has said that the Scottish Government has failed to grasp the scale of the crisis in Scotland’s hotels sector and risks putting thousands of jobs at risk. But Mr Ewing said he expected all applications to receive funding, although the support is yet to be processed.
Responding to a parliamentary question on the support for hotels, Mr Ewing confirmed that 295 bids have been received for the funding, including 46 from hotels in Edinburgh, 37 in the Highlands and 21 in Glasgow.
He added: “We are not yet in the position to confirm the number of hotels which have been successful as final discussions are ongoing with a small number of applicants around the detail of their support package, and the enterprise bodies await the return of a number of issued contracts of offer of support.
“Originally, the hotel support programme was expected to support in the region of 60 hotels.
“Despite the programme being heavily oversubscribed following the submission of 295 expressions of interest, our expectation is that we will be able to exceed the original expected number of hotels supported.”
Scottish Labour deputy leader and finance spokesperson Jackie Baillie, who lodged the Holyrood question, has called on the Scottish Government to draw up better plans to support the hotel industry.
She said: “The SNP’S catastrophic miscalculation on the level of support needed risks leaving scores of hotels high and dry and puts the jobs of thousands of workers at risk.
“Tourism is pivotal to Scotland’s economy, but the SNP are playing fast and loose with the very future of the industry by providing such limited support.
“Frankly, the support on offer doesn’t touch the sides. It’s time for SNP ministers to go back to the drawing board and come up with a proper plan to protect our hotel industry.”
The organisation that promotes tourism in Edinburgh’s New Town has warned that the capital’s hotels need “all the support possible” in order to stem the impact of the pandemic.
Roddy Smith, chief executive of Essential Edinburgh, said: “The simple fact that 46 hotels in Edinburgh have applied to the hotel support programme is testament to the scale of the issue in the country’s capital city. With the capital a thriving business, cultural and visitor hub, it has suffered exponentially since March with hotel occupancy and forward bookings both massively down on past years.
“Our hotel sector has grown in recent years due to the attractiveness of Edinburgh as a tourist and business destination with additional bed nights to meet the expected continued demand.
“Edinburgh is also the gateway to Scotland for the majority of our international visitors, so impacts on tourist numbers Scotland-wide.”
He added: “Our visitor numbers will of course rise in due course, but no one can predict either when this will happen or how long it will take to return to levels close to those pre pandemic.
“Edinburgh must be ready to market itself to the world and have our existing and new world class hospitality providers ready to welcome people back to the city.
“To this end, our hotel sector needs all the support possible to help them get through this incredibly difficult period and allow them to plan for a brighter future.”
Last week, Finance Secretary Kate Forbes announced £185 million of support, which will be handed out to businesses after being passed on from the UK Government.
Ms Forbes said that “£60 million will be provided to the tourism sector, details of which will be developed in consultation with the industry”.