Over 58,000 jobs in the Scottish hospitality sector are at risk, according to research carried out by The University of Edinburgh’s Business School.
According to a new report, in collaboration with London-based fintech company Wiserfunding, 25% of hospitality businesses in Scotland could ‘‘go bust’’ post-lockdown without significant assistance.
The university’s report looked at the financial statements of 5,000 Scottish financial companies in the tourism and hospitality sector, and considered their profitability and debt levels.
In 2019, an estimated 209,000 people were employed in both sectors.
Wiserfunding’s models and technology simulating potential stress scenarios predicted 58,250 jobs would be lost in a financial crisis similar to the economic crisis of 2008.
Dr Galina Andreeva, senior lecturer in management science at the University of Edinburgh Business School, said: ‘‘We hope that the results of our study will be useful to governments and business managers to decide where to focus support during the next phase.
‘‘Our estimates should provide an idea of the required intervention in order to assist industry through these difficult times. 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.’’
Dr Gabriele Sabato, co-founder and CEO of Wiserfunding, said: ‘‘We were delighted to work with the University of Edinburgh on this extremely important study to help understand the potential impact of the Covid-19 pandemic on the Scottish hospitality industry.
‘‘The picture that comes out of our models is providing a frightening, but also encouraging message for SMEs. Although they have been severely affected by this terrible pandemic, they are also the ones that can adapt faster and lead the recovery.’’
She added: ‘‘The financial industry should carefully consider the results of this study when setting their lending criteria in the post-CBILS (Coronavirus Business Interruption Loan Scheme) world in order to target the allocation of their funds at boosting the UK recovery.’’