Business Briefing: Solve the staffing problem to secure tourism's future

David Richardson of the FSB on a mixed picture for the tourist sector across the Highlands and elsewhere.

In the dark days of winter many assumed that the lifting of Covid travel restrictions would see visitors from urban Britain quickly flocking to the Highlands and Islands to have fun in the great outdoors, but have they? As the voice of smaller businesses, FSB Scotland has done what we always do and asked, and our survey of tourism and hospitality operators across the Highlands and Islands enterprise area – the Highlands, Islands, Moray, Argyll and Arran – has just closed.

First the good news, almost six in 10 businesses are doing OK or better. The bad news is more than four in 10 are struggling, or worse. Businesses in the west – from Durness to Campbeltown plus the islands – are generally performing better than those from Dunnet Head to Drumochter, but the top performer is the northern Highlands, where three in four businesses are doing OK or better. Looking forward, we asked operators how positive they are about surviving until 2022. Across the region as a whole, a quarter were pessimistic; in the busier northern Highlands it’s half that.

And while there is a lot for businesses to worry about, those in the northern Highlands are less worried generally than their counterparts elsewhere.

But the well-publicised staffing shortages are hitting businesses hard, especially hotels and restaurants. Almost half of employers are short-staffed across the region, while in the north the problem is more acute in sparsely populated Wester Ross and west Sutherland than in the east – Caithness, east Sutherland, Easter Ross and the Black Isle. And while a half of Highlands and Islands employers are struggling to open as normal, a half have had to make cuts, some cutting the range of services they offer and others opening hours. Most have cut both. Four in 10 have increased pay rates to retain or attract staff, but increased costs mean increased prices. Can the market take it?

For so long the poor relation amongst Highland holiday destinations, why is the northern Highlands now outperforming the rest? The answer has to be the NC500. It is bringing people north – people with money to spend – and their spending is keeping local businesses alive; the same businesses that make the quality of life that we all enjoy as residents so special such as cafés, restaurants, hotels, shops and activities. And tourism businesses in turn give considerable work to their supply chains and to joiners and plumbers and so on. Tourism really is everyone’s business.

With forced staycations in the UK resulting in many more first-time visitors heading north, we should be seizing the opportunity to showcase all that is best about our great region in the hope that they will both return and spread the word. Fine, but with staff shortages forcing so many businesses to reduce services and opening hours, matching visitor’s expectations is far from easy, let alone surpassing them. The sooner we solve the staffing conundrum the better, for visitors who find businesses closed or unable to serve them will leave frustrated and/or annoyed, and that is very damaging.

Whatever happens, with more than one in 10 north Highland tourism and hospitality businesses feeling pessimistic about their chances of surviving until 2022, we certainly can’t relax.

David Richardson is Highlands and Islands development manager for the Federation of Small Businesses.

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