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Business / Carmichael warns of ‘lasting downturn’ in tourism sector without government support

Alistair Carmichael. Photo: Shetland News

NORTHERN Isles MP Alistair Carmichael says a recent report into the experiences of tourism and hospitality businesses in the Highlands and Islands shows the need for lasting government support for the sector.

As previously reported, the Federation of Small Businesses survey found that around four in ten businesses in the sector are struggling to generate sales and profits.

A quarter were also concerned about their ability to survive through to 2022.

The report suggests that, while allowing for a smaller sample size, Orkney and Shetland are seeing a more severe level of anxiety amongst businesses, particularly around travel restrictions and access to staff.

Commenting on the report, Carmichael said the concerns from the industry showed why the government should implement long-term support, such as a permanent VAT reduction.

“These figures suggest that with the high season, such as it is, quickly passing us by there has been no great boost to tourism from staycations as some hoped,” he said.

“We may yet see better numbers through the rest of the summer but this is a warning that we need a long tail for government support for our businesses which rely on seasonal trade.

“People have understandably felt caught between a desire to get business moving again and a concern about mass influxes of tourists and that will have had a knock-on effect for trade.

“On the reverse side, the longstanding message for people to stay as local as possible and avoid public transport is likely to have discouraged people coming to the isles from the south.

“A quarter of businesses fear they will not continue into 2022 – if it is anything like that in reality we could see the short term problems of the pandemic turn into a lasting downturn for the isles economy. To counter this danger we need lasting support with measures like the VAT reduction.”

Locally the tourist sector has received a boost in the past week following the return of cruise ships to Shetland.

Around 800 passengers were onboard the Marella Explorer 2 as it docked in Lerwick yesterday (Monday), with roughly one third heading ashore.