Spinning the web to the tourist trade

Published on Sunday 4 November 2007 00:14

VisitScotland.com's chief is confident the site will soon be profitable - he's just not sure when, he tells Nathalie Thomas.

MARCO Truffelli is fashionably late. It's 9.30am and he had been due to arrive shortly after nine. In true Italian style he walks in, immaculately dressed and coiffured, apologises for the delay and asks for a cappuccino.

Listening to Truffelli's melodic accent, it is easy to imagine that we're meeting on the sunny streets of Rome or in Rapallo, his hometown in northern Italy. But it's a dark November morning in Edinburgh and Truffelli is here, as chief executive of VisitScotland.com, to talk about the Scottish tourism industry.

Truffelli may be very Italian in style and manner but he has been living in Scotland for years. He married a woman from Fife and now has two Scottish children.

He has also been involved with the Scottish tourism trade for well over a decade, first as managing director of the Town House Company, the group behind upmarket Edinburgh hotels such as the Bonham, and then as chief executive of VisitScotland.com, the website set up through a public/ private partnership to help visiting tourists book accommodation and package holidays.

VisitScotland.com is linked to the national tourist board - VisitScotland has a 36% shareholding - but it is run as a private company, backed by Tiscover, an Austrian group specialising in online travel services.

Since it was set up in 2003 VisitScotland.com has been dogged by controversy. With its annual results due to be filed at Companies House this week, Truffelli is bracing himself for more.

The results will show that VisitScotland.com has failed to meet its target of becoming a profitable company by the end of 2007 and in fact lost almost 1.5m more in 2006 than the year before. Operating losses before tax and after exceptional items were 3.43m in 2006 compared to 2.02m in 2005.

Last November, Truffelli had forecast that the company would be out of the red and would be able to start repayments on the 1.85m public sector start-up loan it received in 2003 by the end of this year.

The figures are likely to anger the website's critics, in particular the Association of Dumfries & Galloway Accommodation Providers which has called for VisitScotland.com's return to public hands amid accusations that it does not properly represent small hoteliers. Truffelli is unruffled.

He blames VisitScotland.com's failure to hit its profitability targets on a technological overhaul of the site earlier this year, which he says has required both time and investment.

"We are working very hard with our new technology supplier and we're making huge indents in providing an exciting new product that was launched back in April of this year called Web in a Box," he says.

"Web in a Box is a content management system that allows accommodation providers and tourism service providers to create a web template with a booking engine attached to it. That booking engine allows them to take live bookings over the internet.

"With the launch of Web in a Box, everything has been achieved on time and on budget. But the embedding of the new technology within the tourism industry has probably taken us longer than we originally expected. We are just under 12 months behind where we want to be and of course any kind of strategy delay has financial implications."

The strategy has also been delayed by a change last year in shareholders, Truffelli argues. The group was restructured in July 2006 when Atos, VisitScotland.com's previous majority shareholder, was bought out by Tiscover.

"Last year we undertook a major reorganisation of our funding and what you will notice will be a sizeable write-off of old technology investments which obviously affects the bottom line in the accounts. But the operating losses prior to the one-off write-off have actually greatly improved.

"The strategy that we are adopting now is successful. We believe in the business model, we believe in the technology, we believe in the next step forward and we have solid backing from our shareholders and technology suppliers to ensure that we will achieve our targets when the time is right."

Sipping at his frothy coffee, Truffelli appears confident that he's on the right track. He only shows one small sign of anxiety, when he's asked to name the date when VisitScotland.com will be in the black.

"I can't at this particular stage - although we're very close - give an indication of any timescales because we're in the middle of finalising the numbers for our strategy," he says.

However, he is prepared to answer his critics. He points out that small hotels take the lion's share of bookings made through VisitScotland.com. He believes it's simply a case of hotel operators getting used to the website and online tourism as a whole.

"When change happens some people are ahead because certain sectors of the industry are more ready and prepared to accept and embrace change. Some others take a slightly longer time to embrace that change.

"I encourage people to help us with constructive criticism from within to actually help us to win hearts and minds for the one common goal - which is to attract more repeat visitors to Scotland and to get them to come back and to spend more money."

Recently, the Scottish Government has been keen to push tourism as one of Scotland's key industries for the future - so keen that it has set VisitScotland the ambitious target of doubling tourism to Scotland by 2015.

The idea has raised doubts in many quarters as to the whether Scotland can ever realistically rival the likes of France, Italy and Spain. Even Philip Riddle, chief executive of VisitScotland, tried to lower the bar by calling it "an ambition rather than a target".

Truffelli shares Riddle's concerns but is upbeat about tourism's prospects of elevating itself to the level of Scotland's other industries, for example financial services.

"If you think of Venice as an example, Venice used to be the second largest city in the Austro-Hungarian empire and at one point it reached two million people. Then the city went into a decay to the stage where its inhabitants went down to 60,000-70,000. I think Venice now attracts around 11 million tourists a year."

Nevertheless, he does admit Scotland has a long way to go before the litter-strewn streets of Edinburgh and Glasgow can truly match the elegant piazzas of Italy's cities. He offers the Scots a piece of friendly advice.

"We are all ambassadors, every single person who gives you a smile in the morning when you ask for directions, when you're looking for a restaurant recommendation, when you're asking a taxi driver for the best place to stay. That can make a huge positive difference in the way tourists see our country."