What leaving the European Union means for tourism in the Cairngorms
Reindeer Herd on the Cairngorm Mountain
The UK has left the European Union and from 2021 will no longer be part of the Single Market. This article outlines how leaving the Single Market will impact the tourism sector in the Cairngorms and proposes some next steps for businesses to consider.
Tourism makes up 30% of the Cairngorms National Park economy and employs 43% of the workforce. Visitor arrivals from the EU and EU labour supply from 2021 are the main concerns of the sector. Last month, the UK government published the points based immigration system which will replace freedom of movement of European citizens from January 2021.
European visitors
The good news is that EU citizens will not require a visa to visit the UK for a visit of up to 6 months. Businesses can proceed with investments and taking bookings knowing that official visa requirements will not impact decisions to visit the Cairngorms. The sector does however need to take responsibility to communicate this message to EU visitors through all available channels to avoid the visa issue being lost in ‘Brexit translation’.
European workers
22% of tourism sector workers in Scotland are not born in the UK. The good news is that European citizens already in Scotland can apply for European Union Settlement Scheme for the unrestricted right to work in the UK. The challenge is that the new immigration system currently provides no pathway for new European 'low-skilled' labour. This will impact the tourism sector in the Cairngorms where many jobs are below the £25,600 salary threshold to meet visa entry requirements. The points based immigration system is designed to be refined by the UK Government and monitored to identify and respond to sector shortages if necessary. However, this must be received with caution as last year the UK government threw down the gauntlet to the tourism sector to compete on wages and working conditions and invest in skills to attract and retain local labour, and to improve productivity. The focus of the UK government is to drive a high-skilled, high-wage, high-productivity economy. The tourism sector is expected to step up – or step out.
This approach does not take into account the characteristics of the rural Highland economy or demographic change and is at odds with the Scottish government’s 2015 Economic Strategy which identifies tourism as one of six growth sectors alongside Food and Drink, Financial and Business Services, Life Sciences, Energy, and Creative Industries. The Scottish government has proposed to take immigration into its own hands and will continue to advocate for a Scottish visa, publishing independent research with case studies on how regional visas have worked in Australia, Canada and Continental Europe to support this.
Brexit and Community
The impact of Brexit on UK society has been incredibly divisive and the number of migrant workers coming to the UK has fallen by virtue of the fact that many no longer feel welcome. As businesses operating in a close knit community such as the Cairngorms, it is possible to play a part in healing divisions and promoting diversity.
Next steps
Tourism operators are facing an unprecedented challenge. The short-term impact of the reduction in the pool of available workers in 2021 could be devastating for many businesses and nearly impossible to mitigate. The only viable solution for the sector is to adapt to the new reality in order to plan for improving wages, staff retention and working conditions. This is especially relevant to the Cairngorms where annual earnings in the National Park are 26% lower than the Scottish average.
Business to work smarter
Brexit aside there is also a business case to working smarter to increase the value of your business. A huge amount of research on mega trends has been done and if you are not sure what an ‘immersive’ or ‘non-googleable’ experience is, there are practical ideas on what this means for your business. And you are not on your own. The trends show that the collaborative economy is a way to meet a significant number of the new trends, pushing the business community to act as community, build partnerships and share resources. Information on the support available to your business is provided by the Scottish Tourism Alliance.
This case study draws key lessons on how a family run hospitality business in the Cairngorms increased occupancy rate by 50% and tripled turnover in just eight years. Lessons learned are outlined below.
1. Diversify. Every operator can plan a diversification journey to maximise the use of assets and create guest ‘experiences’ beyond accommodation. Find your passion, look to comparable establishments to inspire you, find a mentor and engage your local community as a prospective market too. After all nearly half of visitors to the Cairngorms are from Scotland.
2. Update your business plan and take financial advice. Whether investing in branding, upgrading marketing and digital infrastructure (e.g. social media platforms and websites), physical infrastructure (e.g. extensions), energy infrastructure (green energy), it is possible to invest in assets to increase the value of your bookings. Consider yourself as an asset too. Investing in your own leadership skills could make the difference post-Brexit.
3. Streamline your business. Many changes won’t cost you (e.g. fixed change over days can mean a reduction of housekeeping costs to 2 days a week or packaging your services for guests online can liberate your time to focus on the ‘bigger picture’).
4. Play your part in promoting a career in tourism to fill the labour gap in the market and to reap the benefits of growth in the sector (e.g. inspire the kids at your local schools to work in hospitality, offer apprenticeships and invest in your apprentices or encourage staff exchanges with other establishments).
5. Practice kindness. It costs nothing to foster an inclusive, diverse, welcoming workplace for employees and their families. Kindness impacts positively on productivity – and it’s contagious, creating better working conditions, for free.
Business to engage in the national tourism agenda
Staff retention is an age-old issue across the UK. In the Cairngorms, the poor perception of career progression in the sector is compounded by the lack of infrastructure to retain well trained, experienced staff in the community, such as insufficient affordable housing and the lack of digital and transport connectivity to support life as a family. The new backward looking immigration policy is not the only storm the sector will have to weather; climate change, coronavirus, fluctuations in the value of the pound, are also key challenges.
Businesses cannot assume that how these issues play out locally will be addressed if they do not engage on these agendas to make their voices heard, and there will be no scale of impact of businesses respond alone.
Scotland is unique in that there is cross-party support for the sector across government. The industry representatives have worked to ensure “tourism is everybody’s business” and have established a partnership approach to the next tourism sector strategy launched last week. The partnership approach will only benefit those who engage and call for a tailored partnership response to the Cairngorms agenda. Members playing an active role in the Cairngorms Business Partnership is critical to achieving this.