By Samuel Ukah

Hospitality in Scotland makes up a massive part of the economy providing approximately £6 billion a year. Since late 2021, prices for several vital products in the UK have been rising faster than household incomes resulting in a fall in real disposable incomes. This is known as the cost-of-living crisis. This crisis has impacted the affordability of housing, groceries, and utilities for both families and businesses alike. The hospitality sector has felt the effects of the crisis due to relying on clients and consumers as their main source of profit.

The hospitality business has suffered, especially since the COVID-19 pandemic with many hotels and pubs not being able to recover from the impact of having to close indefinitely. Reports show that hospitality services lost the most percentage of income during the pandemic when compared to other industries. This combined with the current cost of living crisis has made running a food and accommodation based business extremely difficult and expensive.

Managers within the hospitality sector in Scotland have stated that the costs of running the business now have rapidly become more expensive.

“In regards to pricing and costs for in here, everything has went up. All our suppliers are increasing their prices every 6 months. Electricity has went through the roof, the electricity bill has gone up by £10,000 a month.” – David Carson, General Manager of The Platform Glasgow.

Daniel Slattery, General Manager of Kitty o’Shea’s also detailed his experience with the rising prices of running a business within the hospitality industry.

“The electricity and gas has massively increased. The cost of living has affected what our daily running costs are”.

In order to retain consumers, hospitality companies have had to alter certain factors within their business. Executive Director of the Scottish Hospitality Group Stephen Montgomery shares how he preserves his customers during these times.

“We are trying to keep our doors open to make sure our staff get well paid aswell, but at the same time make it attractive for the consumer to come in so that’s with things like making sure our menus are cost effective whilst staying above the profit margins, whilst still offering everybody the ability to come out whether you have the disposable income to spend £100 a head or whether you have the disposable income to come out and spend £20 a head”.

With the cost of living crisis in full effect, the hospitality business in Scotland is in distress with running costs rising as well as consumers spending less. Tourism and hospitality in Scotland is a huge part of the economy bringing in billions of pounds per year, but where will the cost of living crisis leave the industry in the next few years?