Scottish hospitality businesses adapting so they can rise to market challenges, say industry leaders

Scotland’s hospitality businesses are finding new ways to adapt to challenging market conditions as they look to appeal to visitors throughout 2024 and beyond.

From wine safaris, where guests explore Scotland’s countryside, to developing wedding venues and corporate event spaces, Scotland’s hospitality businesses are expanding their range of services to draw in visitors.

The past few years have presented a challenging time for many businesses across Scotland, with the hospitality and tourism sector feeling the hit.

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Rising costs, staffing issues, and reduced footfall due to the cost of living crisis have all put a strain on an industry that is vital to the Scottish economy, with 15,830 registered tourism businesses providing 175,900 jobs across the country according to the Scottish Tourism Alliance.

Figures from the Great Britain Tourism Survey 2023 show almost a 7% fall in domestic holidays across Scotland in 2023 compared to the previous year. Meanwhile, the figures for Scotland also showed nearly a 6% drop in spending last year.

Despite a fall in domestic holidayers and their spending, Scotland’s hospitality businesses experienced some respite with an increase in international visitors vying to see what the country has to offer.

International tourism in Scotland is showing promise, with almost 4 million international tourists visiting the country in 2023. Additionally, their spending increased by 41% from 2019, with visitors spending £3.6 billion last year.

The statistics make for good reading and the outlook for 2024 shows continued improvement. Visit Britain anticipates 39.5 million overseas visitors will holiday to the UK in 2024, bringing a boost of £34.1 billion, some 7.6% more than the previous year.

With Scotland offering must-see destinations, such as Perthshire, Dumfries & Galloway, and the Highlands, all of which are listed in Booking.com’s top 5 most welcoming destinations for global travellers, and 40% of visitors stating their break in Scotland was ‘the best holiday they had ever taken’, hospitality business owners can feel positive for the future.

Alasdair Swan, Senior Commercial Relationship Manager at specialist hospitality lender, Cumberland Building Society, which provides commercial lending to Scotland’s hospitality businesses, says: “Scotland’s hospitality and tourism sector has suffered several setbacks over the past few years which have presented considerable challenges to overcome.

“Our people-first approach to banking allows us to work incredibly close with our customers in the hospitality space, and so we’ve seen first-hand just how difficult things have been for these businesses to stay afloat.

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“What is noticeable is the resilience of Scotland’s business owners who work day in, day out to adapt their services and evolve the experience they offer to visitors so they can continue to serve their local communities and contribute to their local economies.”

He continued: “There is still a long way to go before the industry can consign the challenges of recent years to the past, but it’s fantastic to see positive actions from Scotland’s hospitality businesses to create value for their guests and increase their appeal.”

One such business owner looking to evolve his hotel’s offering to deliver a truly unique experience is Tom Lewis, owner of Lochearnhead based Monachyle Mhor.

He said: “Last year has been up and down. Our weekends have been bigger but we're quieter during the week. There are a lot of things influencing this from the cost of living crisis to weather and so on.

“What we know is that people like to come for the peace and tranquillity and that they are also looking for more than just accommodation, they are looking for experiences. So, we are trying to offer something different and to show people how beautiful the landscape truly is.

To adapt, we've introduced a wine safari which is a unique experience. People can walk up the beautiful Glen and try different wines, paired with the best of Scottish produce prepared by our chef, such as Scottish scallops and venison. It’s something that everyone can enjoy, from families to couples, as well as dogs being welcome too. It has become a popular experience.

“Weddings are another revenue driver for us where people want to get married surrounded by a stunning location. We're also looking to host corporate experiences that impress.”

As well as Scotland seeing an increase in international travellers, there are still plenty of Scottish residents planning to take breaks within the country’s borders also.

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Some 40% of Scottish nationals are anticipated to take a holiday within Scotland, 56 Degree Insight reports. Crucially, 43% - up from 36% at the start of the year – of Scottish nationals are looking to protect their full holiday budget by making cutbacks elsewhere so they can spend without worry when enjoying their break away.

Marc Crothall, CEO, Scottish Tourism Alliance, said: “What’s clear is that while people are keen to spend their vacation in Scotland, they are also looking for an experience that will give them unforgettable memories. For hospitality and tourism business owners who adapt and can do this, they will stand themselves in good stead for the future.”

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