Wbg says Scottish tourism and hospitality businesses need to consider financial structure to boost resilience
Wbg, a leading independent specialist full-service accountancy firm, says that Scottish tourism and hospitality businesses need to consider their financial structure to boost their resilience.
With new data from the Scottish Tourism Alliance highlighting a growing vulnerability: more than half of tourism and hospitality businesses have less than three months of cash reserves, while visitor spend, profitability and footfall are all declining, David Shadwell head of Business Advisory Services at Wbg, notes that it would be easy to attribute this entirely to external pressures; rising costs, changing demand, policy uncertainty, factors which are increasingly permanent features of the landscape, rather than temporary disruptions.
“The important question is how businesses are structured to operate within that reality,” he said.
“Hospitality has always been seasonal, yet many businesses still rely on relatively static financial planning. Strong trading periods can mask underlying fragility, leaving businesses exposed when demand softens or costs rise.
“What this data reflects is not a lack of ambition or effort, but a growing mismatch between operating models and an increasingly volatile environment.”
Shadwell suggests that if resilience is the goal, then three financial disciplines are becoming essential.
First, cashflow forecasting and budgeting. Not static annual plans but rolling forecasts that reflect real trading patterns and provide forward visibility on cash position.
Second, unit economics. With visitor numbers and spend under pressure, understanding how the business performs at different levels of demand is critical. Models need to work not just at peak, but through quieter periods.
Third, a defined reserves policy. In a seasonal sector, reserves are not simply a buffer, they are part of the operating model. Building financial headroom during stronger periods is what enables stability and investment over the long term.
“Many businesses in the sector remain profitable, but profitability alone is no longer a sufficient measure of resilience,” said Shadwell.
“The challenge now is less about driving growth at all costs, and more about building financial structures that can absorb volatility. In that sense, this is less a crisis of performance, and more a shift in what sustainable performance actually looks like.”