Roland Smyth: Hospitality skill shortages threaten economic growth

Roland Smyth: Hospitality skill shortages threaten economic growth

Roland Smyth

Roland Smyth discusses the challenges facing the tourism industry in Scotland as a result of Covid and Brexit and suggests ways to address these issues including investment in staff training, public sector support, and a focus on ESG issues to make the industry more attractive to a wider talent pool.

As many of us enjoy the festive period and take some time out of our busy working routine, it’s business as usual for most hospitality and hotel workers during what can be one of the busiest periods of the year for the tourism industry. With Covid restrictions behind us, Scotland is set to welcome an influx of visitors, especially within the capital as it prepares to host Edinburgh’s Hogmanay party for the first time since 2019.

The return of major globally renowned events like these is critical for Scotland. This year’s International Scotland report, compiled by CMS and the Fraser of Allander Institute, highlighted how sustainable tourism has been identified as a key economic growth opportunity for the nation. Figures released in 2020 showed how this sector supported £2.5bn in Gross Value Added to our economy and accounted for around 190,000 jobs, predominantly in hospitality-related roles within restaurants, hotels and catering.

Pre-Covid, Scotland was becoming an increasingly popular destination for international visitors who were spending substantial amounts over the course of their stay. VisitScotland data showed the number of visits had been growing steadily from 2012 to 2018, reaching 3.7m trips in 2018, with visitor spending estimated at £2.4bn for that year. While visits dropped slightly in 2019, tourist spending continued to grow to £2.5bn, a six percent increase.

However, since the onset of the pandemic and due to the ongoing repercussions of Brexit, this growth is now under threat due to a lack of the human resources that are such an essential element of the tourism industry. A report from published in August revealed that as many as 120,000 European workers had left the UK hospitality sector since 2019 while more than 70,000 workers from non-EU countries had also left the industry.

In September it was reported that over 37% of UK accommodation and food businesses are now experiencing skilled worker shortages, according to analysis of Office for National Statistics data by the digital marketing agency Koozai. That figure was significantly higher than the reported 14% of UK businesses in all sectors that have been facing worker shortages, further underling the disproportionate impact being felt by the tourism industry.

Addressing this skills gap will need to be a prime focus for both the industry and the Scottish Government if tourism is to achieve its full potential and support wider economic growth.

Tackling this problem will require greater investment in staff training to attract new workers into the hospitality sector and enhance its perception as a long-term career option for existing employees. While there are a number of positive training and recruitment initiatives currently being run by groups including the Hospitality Industry Trust (HIT) Scotland and Hospitality Rising, more needs to be done to expand the industry’s appeal to a wider talent pool.

While the Scottish Government should be acknowledged for its previous support of HIT Scotland training programmes, further public sector support should also be part of the mix in funding future initiatives. This investment could pay dividends as these programmes can help raise service standards and improve Scotland’s reputation as a welcoming international destination.

Hotels and other hospitality businesses could also enhance their attractiveness as employers by putting a greater focus on ESG (environmental, social and governance) issues. Companies which commit to diversity, sustainability and transparent working practices are particularly appealing to millennials born in the 80s and early 90s and the subsequent Gen Z population. A recent IBM survey, for example, reported that 71% of employees believe that environmentally sustainable companies are more attractive employers, underlining the changing dynamics in today’s workforce. One hotel industry professional recently told me that the website page outlining their company’s sustainability credentials is now the one most frequently visited by job applicants.

Further investment in technology can also be another effective way of addressing employee shortages. This needs to be done in a measured and sensible manner, avoiding gimmick technology such as robot butlers and instead focusing on integrated booking, check-in and housekeeping systems. AI technology which can help address common guest queries can also be useful in freeing up staff for other roles where human involvement is most required.

Scotland has also seen the emergence of a number of new landmark hotel brands including the W Edinburgh, which is located within the city’s St James Quarter and set to open in late 2023. These brands bring something fresh to our tourism industry, attracting a new kind of international traveller for leisure and business. While they will play a contributing factor in further growing high-value visitor numbers, it will ultimately require quality people to deliver services that will enable the hospitality sector to thrive.

As the figures from recent years demonstrate, the tourism industry delivers tangible economic growth in Scotland. By tackling existing skill shortages we can maximise its full potential.

Roland Smyth is head of the Scottish Hotels & Leisure Group at law firm CMS

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