Tackling skills shortage must be high on the menu - Liz McAreavey

Arriving in Edinburgh after a few weeks away, it’s good to see George Street and our city centre once again transformed to accommodate the influx of visitors and locals here to enjoy our world-renowned summer festivals.

Liz MacAreavey
Liz MacAreavey

More visitors, more people out and about, with hotels, restaurants and bars all busy – you could be forgiven for thinking all was rosy again in Edinburgh’s vitally important tourism and hospitality sector.

However, two surveys published recently have laid bare yet again the vital part that skills play in our economic success or failure and nowhere is this more evident than in our hospitality sectors.

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As a perfect storm of business challenges – soaring energy costs, price rises, supply chain issues and Brexit – continue to provide headwinds to our post pandemic recovery, the surveys showed the issue is of growing concern.

The Open University’s latest Business Barometer, in partnership with the British Chambers of Commerce, found that more than two thirds (70 per cent) of Scottish organisations are experiencing the knock-on effect of recruitment challenges.

Labour shortages are also hitting staff morale and wellbeing, with 84 per cent of Scottish organisations stating that the impact increases workload on other staff.

Staff shortages in the hospitality industry are causing nearly half (45 per cent) of operators to cut trading hours or capacity in order to cope. This is costing the industry £21bn in lost revenue and causing an estimated £5bn loss in tax for the Exchequer, according to a joint survey by UK Hospitality, the British Institute of Innkeeping, and the British Beer and Pub Association.

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According to the survey, one in three businesses in the sector is now forced to close one or more days a week. Recent ONS figures show the sector currently has a record 174,000 jobs available and is experiencing 83 per cent more vacancies compared to March-May 2019 (the most recent comparable period).

When we add to the mix the challenge businesses are now facing to deliver targets set by our policy makers for a just economic transition to a green economy, the need for structured support and help for our worst-hit business sectors becomes an unanswerable reality.

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The wider hospitality sector is a major contributor to the Scottish economy. Pre-pandemic, the sector employed some 285,000 people and added £6bn per year to the economy by way of GVA. Some estimates put the economic impact of the Edinburgh Fringe on the Scottish and UK economy at anything between £200m and £1billion. And in terms of jobs, hospitality is the third largest employer in Scotland, accounting for around 10 per cent of national employment.

We need greater collaboration on building the skills and labour force to tackle the shortages – in particular, as we move to higher skilled, higher paid models we need to build on our already well-educated local workforce to ensure we are meeting the demands for skills that are needed today and tomorrow.

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We have an opportunity to really connect employers and sectors to schools, colleges and government, and we now have an imperative to make this as effective as possible if we are to genuinely build the inclusive and successful economy we need for Scotland.

And all the more pleasing as we celebrate the 75 th anniversary of the International and Fringe Festivals.

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Liz McAreavey, Chief Executive at Edinburgh Chamber of Commerce