New research has revealed that 60% of Scottish tourism and hospitality businesses have less than three months' worth of cash reserves - with just under a quarter having none.
The latest Scottish Tourism Alliance (STA) Business Barometer Survey also found that the standout challenges were energy costs (93%) and the wider cost of living (84%), followed by the short-term lets (STLs) licensing scheme (83%).
The Deposit Return Scheme (DRS) was also seen to be a challenge by 58% of those who took part in the survey.
A significant number of respondents also called for action on Business Rates - with the suggestion that rates relief to be aligned with England - as half of respondents are facing an increase in their business rateable values (45%), with 5% experiencing over 75% increase and 9% facing a 50% increase.
The survey took place between 3 and 19 February, with 714 respondents, representing views from 31 out of the 32 local authorities across Scotland - and 31% of responses coming from the Highland Council area.
Respondents continue to call for the UK Government to improve immigration measures; lower VAT for the sector; bring down inflation; lower corporation taxes and business rates; and ensure better distribution of levelling-up funding.
Almost all (96%) were ‘not confident’, ‘pessimistic’ or ‘extremely pessimistic’ that the UK Government’s new Energy Bills Discount Scheme will protect the tourism and hospitality industry from energy prices over the next 12 months.
A further 28% reported that they were ‘extremely pessimistic’ about energy bill protection beyond April 2023.
However, during 2022 most respondents made a profit (69%), although 28% said that they were still making less profit than in 2019.
STA chief executive Marc Crothall commented: “The intensity of feeling across the industry is tangible.
“The stark reality facing our industry is that the survival of many businesses will be entirely dependent on an immediate change in the direction of government policy.
“Our industry is experiencing the double whammy from inflation and the policy pain that is adding costs which could put many out of business altogether.
“This is entirely the wrong time for the Scottish Government to be piloting policies that will do limited good and risk maximum harm - at the same time, the withdrawal of financial support measures and a return to heavy taxation burdens will be a heavy burden to bear for too many.”
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