'Bleak future' for Highland hospitality sector, economist warns as traders feel pinch of latest restrictions
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Hundreds of jobs could be lost in the Highlands' hospitality industry following the introduction of tighter coronavirus restrictions, a city economist has warned.
Tony Mackay made the bleak prediction as Scotland’s hospitality minister Fergus Ewing acknowledged the devastating impact on tourism.
Mr Ewing said further details of the government’s £40 million aid package to help those businesses directly affected would be announced this week.
Several city centre pubs have temporarily closed their doors following the introduction of the 16-day ban on serving alcohol indoors between 6am and 6pm – while alcohol can only be served outside at licensed premises until 10pm.
Other businesses are being innovative to try and keep trading.
The Kingsmills and Ness Walk hotels have set up restaurants and bars under canvas and are inviting customers to bring their own blankets, while Johnny Foxes is supplying hot water bottles to customers having a meal or drink outside.
And the popular Castle Tavern has opened a brand new extended beer garden after converting land next to its existing set up.
But the outlook remains gloomy among many restaurants, bars, hotels as well as their suppliers, who have also been hard hit.
Mr Mackay said: “I am pessimistic and expect some of these businesses to close permanently, with the loss of hundreds of jobs in Inverness.
“Both the UK and Scottish governments have been hoping for a V-shaped economic recovery but the latest official statistics on monthly economic output were very disappointing.
“The growth was only two per cent which was less than half the forecasts.
“The furlough scheme has been of great benefit to many businesses in Inverness and elsewhere in the Highlands, but neither the UK nor Scottish governments can afford to continue to provide such assistance for much longer.
“As the assistance is reduced, I expect more local businesses to shut down permanently.”
Mr Ewing said Highland hospitality businesses were being treated less strictly than those in the five central belt health board areas – where pubs and restaurants have closed until October 25 – as the R number is much higher there.
“I really need to stress nobody I am aware of wants to impose these restrictions,” he said.
“The only reason they are being imposed is to save lives and safeguard the NHS and reduce the alarming increase of those getting the virus.
“The measures being taken in Scotland look to be more or less applied in England as well as having been applied in parts of France and Spain.”
He would not be drawn on speculation as to whether the regulations will continue after 16 days.
“No-one wants these restrictions to continue for a day longer than necessary,” he said.
Meanwhile, family-owned wholesaler Williamson Foodservice in Inverness, which supplies hotels, restaurants and cafés and community stores, is bracing itself for job losses due to the knock-on effect.
Managing director Gary Williamson said the new restrictions had resulted in an immediate impact for many of the firm’s customers.
“Some of them have accelerated their plans for closure for the winter,” he said.
“This week will be a very telling week as to where things are going.”
He said the company, in Walker Road, had already had a round of voluntary redundancies and used the furlough scheme but could not avoid further job losses among its 108 staff.
Owners and senior managers of more than 100 Scottish hotels including many from the Highlands, have written to the First Minister, Nicola Sturgeon, urging immediate changes to the new measures saying the rules prohibiting the sale of alcohol in public areas to hotel guests is hitting revenue.
Tony Story, managing director of Patio Hotels, which owns the Kingsmills and the Ness Walk Hotels, said his company was fortunate in that it had the space to set up outside dining areas.
Praising his staff, he said: “There is a bit of the Dunkirk spirit about it and our guests are enjoying the experience, but whether we make money out of it is another matter.
“It is very costly. I am not entirely convinced indoor restaurant settings are contributing to the spread of coronavirus.”
Related: Ross-shire publicans react to restrictions
