90,000 hospitality jobs at risk from second lockdown

The study aims to show where support should be targeted to aid recovery

Almost half of all hospitality businesses and 90,000 jobs could be lost in Scotland if there is a second lockdown, a new report shows.

Edinburgh University's Business School looked at the financial statements of 5,000 Scottish companies for the study.

It predicted that a crisis similar to the 2008 financial crash, while less severe than a second lockdown, would see 58,000 hospitality jobs lost.

More than 200,000 people were employed in the sector in 2019.

Using the financial statements from thousands of Scottish hospitality and tourism companies, academics at the business school simulated scenarios based on previous crises, including the European debt crisis of 2009-11 and swine flu in 2009-10.

Tailored support

Predictions for the sector were based on financial accounts from the past 20 years, which showed companies' profitability and levels of debt.

The study found that bigger companies were more at risk of bankruptcy than smaller firms, which have lower fixed costs and can adapt to changing conditions faster.

• Hotel giant LGH says 1,500 jobs at risk

• Employment in Scotland down 15,000 during lockdown

Dr Galina Andreeva, senior lecturer in management science at the business school, said: "Our results confirm that the current government efforts to support the sector are going in the right direction. However, we would recommend support tailored to company size to maximise impact."

She added: "Even once the economy starts to reopen, measures will likely be put in place that curtail economic activity to some degree - travel will be less common, businesses will have to space workers and customers further apart, restaurants will be serving fewer customers at a time, and sporting events, concerts, and other activities involving large crowds probably will remain off limits for a long time."

The study, which saw the university team up with London-based risk assessment company Wiserfunding, was funded by the university's Data-Driven Innovation initiative, part of the Edinburgh and South East Scotland City Region Deal.

It followed an earlier report by the business school which showed which tourists the Scottish tourism industry should focus on in the immediate future to maximise recovery.