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Scottish tourism industry warns of dire situation ahead of Holyrood elections

The research, undertaken by 56 Degree Insight on behalf of the Scottish Tourism Alliance, was unveiled at the STA Signature Conference in Edinburgh yesterday (10 March) as representatives from six political parties gathered for a pre-election hustings ahead of the Scottish Parliament elections in May.

“The survey of 239 tourism and hospitality businesses across Scotland highlights growing financial pressure across the sector. While around two-thirds of businesses reported making a profit in the past financial year, the findings reveal growing financial vulnerability. More than half of businesses said they had no cash reserves or fewer than three months' reserves,” said a representative from the STA.

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“Performance during summer 2025 was notably weaker than the previous year. Visitor spend fell by 15%, and profitability declined by 23%, despite overall turnover remaining broadly flat. Domestic visitor numbers also fell significantly, with a net year-on-year decrease of 26%.”

The majority of businesses also reported higher supplier costs (86%), energy costs (82%), and staffing costs (54%) than in 2024. Fiscal and administrative costs were also significantly higher for many venues.

As a result, only 24% of businesses surveyed planned to invest in 2026, while some respondents indicated they could be forced to reduce staffing levels.

The survey also highlighted a strong dissatisfaction with the current policy landscape. Around 68% of respondents said they viewed the recent Scottish Budget negatively, while 79% said they had little or no trust in elected MSPs to deliver for the sector.

Marc Crothall, chief executive of the Scottish Tourism Alliance, commented: “Scotland's tourism and hospitality sector is resilient, but these findings show many businesses are now operating with very limited financial headroom. Rising operating costs, alongside continued concerns around non-domestic rates revaluation, are placing significant pressure on businesses across the sector. Many operators are now forced to act defensively rather than expansively, unable to invest in their people, their product and the places that create Scotland's world-class visitor experiences.

“The industry does not lack ambition. The aspiration to grow is very much still there, and there is frustration that businesses are unable to unlock their potential. The STA Holyrood Election Manifesto highlights what the sector can achieve with the right policies in place - that and today's research findings have provided the basis for today's political party debate.”

The STA has called on all parties to commit to working with industry to deliver a long-term “Tourism and Hospitality Growth Plan and to recognise the sector as one of Scotland's key economic drivers.”