The Purchasing Group was launched in April offering registered member discounts across the cost of a range of business services as concerns grew about rising costs to B&B owners following the pandemic and particularly since the Russian invasion of Ukraine this year.
Association chairman David Weston says the initiative, which provides registered members with discounts from a wide range of suppliers, came about after a growing number of crises that continued to hit the industry in the aftermath of the pandemic, just when hospitality owners were expecting business to return to normal.
He says that with soaring energy costs and inflation, trading conditions are the toughest he has seen in all the years he has been in the industry. He says this initiative is helping to harness the potential that exists to lower the overall costs of running a B&B.
Among the issues that have put pressure on business costs, he says, in particular fuel costs. Property owners last winter were agonising over whether to stay open for the odd guest, but doing so entailed huge expense of heating and other costs to make the property satisfactorily serviceable for guests, he says.
“We’re trying our best to recognize the fact everyone’s got cost problems,” he says. “One member who used the Purchasing Group contacted us to say they had managed to get a £650 discount on their annual B&B insurance.”
And he says the BBA is working with the UK Government on a number of issues including their plans for recovery from COVID. Recovery of international travel levels, for example, is still way below pre-pandemic levels, he says, although he says the American tourist market is strong at the moment owing to exchange rate. But he says the China market has completely switched off, after initially showing itself to be a significant market. “There are a lot of difficulties, with the international market, the inbound market isn’t quite back yet to what it was in 2019. And it won’t be for probably until the year after next. What’s more, British people have less money in their pockets to spend on anything such as travel discretionary spend. And we’re worried about the coming winter, which is going to be tough, and we’re hoping that things like the Ukraine war get resolved,” he says.
There are regional burdens too, he says. Scottish hospitality properties are set to be adversely affected by the introduction of the tourism tax early next year, levied against any visitor staying overnight.
David Weston says costs are also emerging with regard to the new tax in the form of demands from local authorities for property detail, often unnecessarily asking for owners to provide detailed scale plans. He says one member of the association said they had incurred costs of about £1,200 to provide architectural drawings of their premises. Weston says, “That turned out to be a total waste of money, because the purpose of the plans is just to check that you’re not exceeding your capacity and to show them the number of rooms or the number of beds. So realistically you could just submit a sketch and that would be fine. But because local authorities are demanding scale plans, people are incurring those costs, without realising that they don’t have to.”
Objections to the new tax are not confined to the B&B Association. UKHospitality Scotland (UKHS) remains unconvinced that tourist taxes are an appropriate measure, introducing yet another tax on an already overtaxed sector. Opposition is based upon the fact that:
- VAT on accommodation is much higher in Scotland than other EU nations
- A tourist tax will be a costly and bureaucratic burden on accommodation providers
- It is not currently possible to capture short-term letting properties – giving them an unfair advantage
- It does not deal with over-tourism as it does not include the vast majority of tourists who are day visitors
- There is no guarantee that a tourist tax will be used to develop the tourism offer of an area
- It will make Scotland less competitive as a leading tourism nation