The Scottish Budget for 2026/27 has prompted strong reaction across Scotland’s tourism and hospitality industries, with leading trade groups warning that while short-term reliefs are welcome, they fall short of addressing the deep-rooted costs and competitiveness challenges faced by the sector. Industry figures say the measures announced offer only temporary respite for businesses still reeling from revaluation pressures and rising operating costs.
Marc Crothall MBE, Chief Executive of the Scottish Tourism Alliance (STA), said: “Today’s Budget has acknowledged the intense pressure facing Scotland’s tourism and hospitality sector, but the transitional relief and support announced still fall short of what’s needed.
The Government’s modest short-term measures, including transitional relief, rate reductions and 15% non-domestic rates relief, will offer temporary breathing space but not enough to prevent closures and job losses. Relief remains capped, time-limited and fails to address rising costs or revaluation volatility.
Recent STA research shows over 70% of businesses expect conditions to worsen, with nearly half delaying investment and 15% anticipating redundancies. Margins are wafer-thin.
While funding for VisitScotland, the Rural Tourism Infrastructure Fund and major events is welcome, it does not tackle the sector’s core cost and competitiveness challenges.
Tourism is a key economic driver, and this Budget was a missed opportunity to stabilise the sector. The STA urges all political parties to commit to a fairer rates system that supports jobs and long-term growth.”
Scottish Hospitality Group spokesperson said: “There are only limited measures we can welcome in the draft Budget following a devastating revaluation process for many licensed hospitality businesses. The mitigation offered goes nowhere near far enough for larger premises that employ the most people.
We are disappointed the Budget hasn’t helped licensed hospitality more, with a heavier burden again falling on larger sites. While we welcome the commitment to an independent review of rates methodology ‘at pace’, the Government should have shown leadership rather than waiting on a UK Government u-turn.
We urge the Government to rethink the relief package and move ahead quickly with the independent review to deliver long-term fairness.”
Leon Thompson, Executive Director, UKHospitality Scotland, said: “Today’s Budget has not sufficiently addressed the challenges facing hospitality, and most businesses will still see higher rates bills in April.
The reduction in poundage is welcome but does not offset revaluations and the loss of 40% relief. Rateable value increases of over 100% bear no relation to current trading conditions, and relief measures are merely a sticking plaster on eye-watering bills.
The Government must go further or face accelerating job losses and closures. The commitment to pass on any additional funding from England is crucial and must be acted on swiftly.”
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Paul Togneri, Scottish Beer & Pub Association, said: “The support announced today is welcome but still means many pubs will pay more than last year. It falls far short of what’s needed to secure businesses and jobs under current pressures.
Any support for the sector in England must be passed on in full to Scotland. For some pubs, that could mean the difference between staying open or closing for good.
The sector needs a permanent solution to the disproportionate rates burden on pubs. The current system is broken and continues to cost investment and jobs.”
