Skye’s tourism businesses are fighting battles on multiple fronts as the country’s economic crisis starts to bite, according to the results of a survey by SkyeConnect.

Skye’s tourism businesses are fighting battles on multiple fronts as the country’s economic crisis starts to bite, according to the results of a survey by SkyeConnect.

The findings were announced today (16th November) at the Destination Management Organisation’s Autumn Conference at the Sligachan Hotel, entitled “Regroup, Reflect, Recover”.

The survey, which looked at the impact of the economic crisis on business plans for the winter and into the 2023 tourist season, was conducted through October and the first half of November and received responses from 94 businesses in Skye and Raasay, with the vast majority (65) representing the self-catering and B&B sectors.

Businesses were asked for their “Top 3” challenges and the overwhelming majority cited rising energy costs, the shortage of staff and the costs of preparing for short-term let licensing.

The wide-ranging survey also looked at winter demand and the impact of energy price rises on the willingness of business owners to stay open during the quieter winter months.

86% of respondents reported demand in December was poor or non-existent. That figure rose to 94% for February. Prior to the hike in energy prices 23% of respondents planned to close during the winter months, but that figure increased to 39% as the impact of energy prices hit, despite the Government’s temporary price cap.

77% of respondents to the survey have little or no confidence in the UK Government’s management of the economy, although it should be noted that the survey was carried out during both Liz Truss’ and Rishi Sunak’s time in 10 Downing Street.

A third of businesses taking part in the survey expect their energy costs to increase by over 50% next year with 72% planning to increase their prices to customers if the energy price cap is removed in March. 79% of those reliant on heating oil expect their costs to rise between 50% and 100%.

However, despite the macro-economic gloom, 56% of respondents said they have optimism or confidence in their own business with 82% planning no change to the number of people they employ in 2023. However, the hotel sector is feeling significantly less confident than other sectors represented in the survey.

Respondents were asked what measures they would like to see introduced to assist the hospitality and tourism industry. A VAT reduction or holiday was a popular choice along with postponing the introduction of short-term let licensing and an extension of the energy price cap. For the bigger businesses, such as hotels a reduction in business rates is a significant priority.

The survey also asked for views on the Transient Visitor Levy (TVL) or tourism tax. Opinion was fairly evenly divided with a slight majority in favour of a small surcharge on visitor bills as long as the money raised was spent on Skye infrastructure and marketing.

Many of these topics were discussed during today’s SkyeConnect Autumn Conference with speakers representing the Scottish Tourism Alliance, VisitScotland and HIE along with local business owners.

SkyeConnect Chairman, Gary Curley, is pleased with the level of engagement of the business community both with the survey and the conference. 

“SkyeConnect has an important role to play in bringing businesses together to discuss our collective challenges and to support each other as we find ways of navigating these tough economic times. As we discovered during the Covid pandemic, having hard data to take to Governments and public agencies is vital if we are to shape policy and lobby for the support our industry and our community needs. We strongly support the industry’s call for cuts to VAT and businesses rates, an extension of the energy price cap and a postponement of the implementation of short term let licensing. These measures will preserve jobs and protect the livelihoods of so many people in our community who rely on tourism.”