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.

Become a supporter of Shetland News

Shetland News is asking its many readers to consider start paying for their dose of the latest local news delivered straight to their PC, tablet or mobile phone.

Journalism comes at a price and because that price is not being paid in today’s rapidly changing media world, most publishers - national and local - struggle financially despite very healthy audience figures.

Most online publishers have started charging for access to their websites, others have chosen a different route. Shetland News currently has  over 600 supporters  who are all making small voluntary financial contributions. All funds go towards covering our cost and improving the service further.

Your contribution will ensure Shetland News can: -

  • Bring you the headlines as they happen;
  • Stay editorially independent;
  • Give a voice to the community;
  • Grow site traffic further;
  • Research and publish more in-depth news, including more Shetland Lives features.

If you appreciate what we do and feel strongly about impartial local journalism, then please become a supporter of Shetland News by either making a single payment or monthly subscription.

Support us from as little as £3 per month – it only takes a minute to sign up. Thank you.



Subscribe to a selection of different newsletters from Shetland News, varying from breaking news delivered on the minute, to a weekly round-up of the opinion posts. All delivered straight to your inbox.

Daily Briefing Newsletter Weekly Highlights Newsletter Opinion Newsletter Life in Shetland Newsletter

JavaScript Required

We're sorry, but Shetland News isn't fully functional without JavaScript enabled.
Head over to the help page for instructions on how to enable JavaScript on your browser.

Your Privacy

We use cookies on our site to improve your experience.
By using our service, you agree to our Privacy Policy and Cookie Policy.

Browser is out-of-date

Shetland News isn't fully functional with this version of .
Head over to the help page for instructions on updating your browser for more security, improved speed and the best overall experience on this site.

Interested in Notifications?

Get notifications from Shetland News for important and breaking news.
You can unsubscribe at any time.

Become a supporter of Shetland News

We're committed to ensuring everyone has equitable access to impartial, open and quality local journalism that benefits all residents.

By supporting Shetland News, you play a vital role in ensuring we remain a pivotal resource in supporting the community.

Support us from as little as £3 per month – it only takes a minute to sign up. Thank you.