The sectoral economic impacts of COVID-19 on the tourism economy: a regional analysis focussed on Scotland

The broad patterns of changes in tourism induced by Covid-19 and the resulting containment measures - a sharp and sudden fall in international arrivals and lower international travel to the UK, plus reduced intra-UK domestic tourism flows and changed tourism behaviours - has been felt in all UK regions. Tourism is characterised by relatively low pay (its average gross wage was two-thirds of the Scottish average), high labour intensity (with its 218,000 jobs equivalent to 8% of all jobs in Scotland) and with one quarter of those jobs in rural areas. Tourism is also a key employer in many rural parts of the country, where economic resilience has tended to be more fragile than in other parts of the country. Understanding the potential economic implications of different scenarios will have important policy implications, not just on the economy but for the wider policy support landscape for different communities across Scotland. Crucially, changes in the scale and type of tourism does not impact only on tourist-facing activities, such as travel, accommodation, cultural and recreational activities, but also all those industries that are highly interconnected to tourism activities via supply chains such as such as agriculture, farming and fishing, and retail. In this project we partner with Visit Scotland to analyse the economic impact of COVID-19 on the tourism industry and aggregate Scottish economy and to provide urgently required economic analysis to the key stakeholders in the Scottish tourism industry at national and sub-national levels. There is now a pressing requirement for specialised modelling work and quantitative development of this evidence base, to inform decision-making for Scotland's crucial tourism industry in the process of recovering from the COVID-19 pandemic. There are two parts to the work which will occur through the project's duration. Firstly, it will bring together researchers and stakeholders from the tourism industry in the development of quantitative scenarios - building on already-developed qualitative scenarios by the Scottish Tourism Economic Recovery Group (STERG). These will set out agreed projections for the path of tourism under alternative scenarios, including policies. Secondly, the work will take these projections as inputs to an economic modelling framework for Scotland which will set out impacts of these scenarios. The results will capture impacts on the economy as a whole as well as on individual industries, including those directly exposed to tourism spending and the knock-on effects on linked industries across the whole economy and sub-regions of Scotland. This project will help STERG and policy makers at national and sub-national level in Scotland to fully understand the implications and magnitude of the various scenarios for Scottish tourism, in particular a worst-case 'three winters scenario'. This will ensure the current quantitative knowledge gap is filled and appropriate policy responses are effective in supporting economic recovery.