1600 jobs at risk at Scottish hotel chains
Last updated 12th Jun 2020
Hundreds of jobs are on the line at two of Scotland's best-known hotel groups as Apex Hotels confirms it is considering redundancies from among its 1100 staff in Scotland while the Macdonald group is looking at shedding 500 positions in Scotland.
The news comes just hours after the Scottish Government announced plans to reopen the tourism industry next month.
Macdonald, which has 31 hotels and resorts throughout Scotland and England, says it ha seen a total collapse of income over the past three months.
“There is no realistic prospect of us returning to anything approaching normality for the foreseeable future" - Gordon Fraser, Macdonald group
Group deputy chairman Gordon Fraser said: “We had really hoped to avoid this very unwelcome step, but with no realistic prospects of a return to anything like normal trading for the foreseeable future, we were simply left with no choice. Potentially, we are looking at around 1,800 roles at risk, in all areas and at all levels of the business.
“The Government’s furlough scheme has helped to a degree but our essential operating costs, insurance and some wages are still having to be paid, meaning our monthly cash outgoings are still running at £2 million while we are forced to remain closed. Even after cutting all non-essential spending and with senior management and our remaining staff accepting reduced salaries, the current situation is simply unsustainable.
“There is no realistic prospect of us returning to anything approaching normality for the foreseeable future and, whilst its enormously regrettable, we simply must take these steps to ensure that we have a meaningful business when this situation ends, enabling us to bring back as many of our employees as possible.
Apex Hotels has a portfolio of 10 four-star hotels across the UK and has its headqurters in Edinburgh.
It employs 1100 staff but says there are no indications of how many positions might go.
CEO Angela Vickars said: “Our entire group has an average monthly occupancy of less than 10% from now until the end of the year. Normal occupancy levels at this time are over 90%. This dramatic downturn in business, coupled with the uncertain economic outlook ahead, has forced us to restructure our team and look at how we operate going forward and survive this crisis.
“Our entire group has an average monthly occupancy of less than 10% from now until the end of the year" - Apex Hotels CEO Angela Vickars
“Throughout this period we have made use of the Government’s Job Retention Scheme with the aim of protecting jobs for as long as possible, but the impact coronavirus has had on our industry has been devastating. Our sector will be the last to reopen, and when we do it will be with many restrictions in place on how we can operate. Around 40% of our travellers come from overseas so international quarantine measures combined with strict 2m social distancing rules will all be a reality and severely impact our business. Without additional hospitality sector support, it is simply not feasible for us to open our doors and resume trading anywhere close to pre-COVID-19 levels.
“The Apex Hotels brand has been built on the strength of its people, so discussing potential redundancies is something we never wanted to consider. We will continue to do everything in our power to improve our position, but we know that it will take time for our business and the industry to bounce back. Our commitment to recovery and rebuild remains stronger than ever, and our sole focus will be on welcoming guests again and returning to usual staffing and business levels as quickly as we possibly can.”
The announcements came hours after Tourism Secretary Fergus Ewing told the Scottish Parliament hospitality businesses could reopen on July 15 if progress in suppressing coronavirus continues.
He told MSPs the Covid-19 crisis has had a "devastating'' impact on businesses, with many calling for further clarity on when they can reopen.
The lockdown restrictions are due to be formally reviewed on June 18 and July 9.
Mr Ewing said he hopes the sector can be given the go-ahead for reopening on the July date, but a few more days will then be needed to allow transport services to prepare.
He said: "As things stand just now, our hope is that we will be able to give the go-ahead to a reopening of the sector at the July 9 review.
"Assuming this does prove possible some time would then be required for interconnected services, such as transport to prepare.
"On that basis, and on the clear understanding with the industry that nothing can be absolutely guaranteed at this stage, and that we may need to change this date if the evidence requires it, we would encourage tourism and hospitality businesses to prepare within appropriate safety guidelines for reopening on July 15.
"For the reasons I've set out this timetable is by necessity both provisional and conditional. But we very much hope it can be met.''
Mr Ewing said he and Finance Secretary Kate Forbes have been in touch with Chancellor Rishi Sunak about extending support for tourism and hospitality businesses."
Hear all the latest news from across Glasgow and the West on the hour, every hour, at Clyde 1. Listen on FM, via our Radio Clyde app, on your DAB radio, online at Clyde1.com, or say ‘Play Clyde 1’ on your Smart Speaker.