Push to Rescue Hospitality Businesses

DUMFRIES and Galloway Council has backed an urgent push to rescue the region’s struggling hospitality sector.

Councillors last week agreed that businesses, including hotels, restaurants, pubs and cafés, are being hammered by a combination of soaring costs and unfair taxation.
Castle Douglas and Crocketford Councillor Pauline Drysdale tabled a motion at the meeting, stating that the region’s hospitality trade is in a state of economic crisis and that businesses desperately need support.

As she couldn’t attend, her Conservative colleague Councillor Lynne Davis read out her statement.

She said: “After attending various Scottish hospitality group events in person over the last few months and being contacted by hoteliers and accommodation providers across the region, and listening to the Association of Scotland Self-Caterers, it has become increasingly clear the sector is facing unprecedented pressure.”

She argued this hugely important industry already faces a punishing list of pressures — a 20 percent VAT rate for hospitality whilst Europe bases VAT at between six and ten per cent; rising National Insurance costs; utility increases; and insurance premiums rising to an average of between 12 and 18 per cent.

A key grievance was the disparity between Scotland and England on business rates relief.

Councillor Drysdale’s motion states that “for three years, England has offered two years of 75 percent rates relief, one year of 50 percent rates relief” while Scottish hospitality received “no rates relief for the three years 2022/23, 2023/24 and 2024/25, and only a 40 percent reduction in financial year 2025/26 for those with a rateable value of below £51,000.”

Council officer Stuart McMillan acknowledged that while visitor numbers to the region are improving, the financial pressure on businesses is the real crisis.

He told the meeting: “We are seeing more visitors coming but their spend is reducing — there’s an imbalance in the equation.”

North West Dumfries Councillor Andy Ferguson warned that the motion alone would not fix the issues.

The SNP councillor said: “This isn’t going to fix it. We need a much, much bigger review than that.”

So, it was agreed the council would convene an urgent cross-sector working group including representatives from local hospitality businesses, The Scottish Hospitality group, South of Scotland
Enterprise, and the South of Scotland Destination Alliance.

The council will also lobby the UK Government for an urgent review of VAT and National Insurance contributions and their impact on the viability of small and medium-sized hospitality businesses.