Digital infrastructure investment required

Tourism: VAT support and digital connectivity call

31 countries across Europe enjoy the benefits of a reduced rate of tourism VAT, meaning theUKis potentially losing ground to competitors

Strategic investment will keep Scotland’s hospitality and tourism businesses on track.

Tourism in Courier Country has grown significantly in recent years and the outlook is positive, with the national tourism strategy anticipating growth of up to 30% by 2020.

There is no doubt the Brexit vote has caused uncertainty, particularly in tourism and hospitality – arguably Scotland’s most important industry, bringing in an estimated £4.4 billion a year in direct spend from overnight visitors.

Made up largely of small to medium sized businesses, it accounts for 9% of the UK’s GDP and employs 10% of the UK’s workforce.

The weak pound makes the staycation a more attractive option than going abroad, and it makes Scotland a cheaper destination for overseas visitors.

However, the sector is under pressure from increasing wage bills and is facing up to retaining and attracting seasonal and permanent staff from the EU.

As the CEO of the Scottish Tourism Alliance said recently: “Tourism is not a large corporate that can be moved to a ‘friendlier’ commercial environment”.

However, it looks like help is on the way. The Scottish Government has recently announced more details of their apprenticeship levy, due to be formally introduced next year.

The initiative could potentially help small businesses who do not have the training budget for apprenticeships schemes to apply for funding from the Government, to the tune of 90% of costs.

This could help the sector develop its workforce from within and reduce recruitment costs.

Yet, the levy could come at a cost for larger employers with wage bills in excess of £3 million, who will be charged 0.5% of their annual payroll costs for their apprenticeship schemes.

Continued investment in Scotland’s digital infrastructure is vital to increase visitor experience as Scotland currently has the worst 3G coverage in the UK. The sector needs a clear timetable from Government to improve connectivity.

The recent Brexit Hospitality Summit, held in London, debated the issue of cutting tourism VAT, arguing that a VAT cut could provide a much-needed boost to the sector.

The UK ranks 140 out of 141 countries in terms of price competitiveness and, currently, 31 countries across Europe – both inside and outside the EU – enjoy the benefits of a reduced rate of tourism VAT, meaning the UK is potentially losing ground to competitors.

Whilst there are challenges ahead, Scottish tourism and hospitality is a resilient sector and, with the right investment in key areas, sustainable growth will follow. brought to you by

BT Openreach engineer Stuart Macdonald installs a fibre broadband box on the Isle of Lewis.