Closer to home: Can tourism revive Scotland's beleaguered economy?

• Elie in Fife is one of the seaside destinations that could benefit from the staycation boom. Picture: Dan Philips

An extended spell of warm, dry summer; a weak pound that makes everything from hotel rooms to restaurants much more affordable for Europeans and Americans; the Icelandic volcano and BA strikes that have put many Britons off overseas air travel; and the presence of major events such as the Open golf championship at St Andrews. Even the recession can be seen as a positive, encouraging Scots to holiday closer to home.

Against a backdrop of widespread doom and gloom, tourism could be the key to saving Scotland's economy in 2010. But is it delivering at a time of need? New figures suggest the industry - which supports more than 200,000 jobs and is worth at least 4 billion a year, is booming. Leading players in the industry have told The Scotsman they have been "pleasantly surprised" at the way they have withstood such major setbacks as the fierce winter weather.

But there are also warnings against complacency and fears that the industry may be facing longer-term problems due to a slump in corporate bookings, deepening economic crises in major European cities, and rising rates bills. An extension of the "staycation effect", said to have brought an unprecedented bonus last year, and good weather in the past three months have been credited with bringing hoteliers and other tourism operators welcome relief. Growing numbers of Scots holidaying at home and first-time visitors from England are said to be boosting numbers.

The Scotsman can reveal that the number of people visiting Scotland from around the UK was up 11 per cent in the first quarter of this year, with the figure for March up a staggering 28 per cent. Other research has found occupancy rates for hot- els in Scotland's three major cities are all up for the first five months of 2010. The industry has benefited from an extended winter sports season, which lured 145,000 people to the Cairngorms between November and June, Glasgow attracted over 130,000 fans for just three concerts last month, while this month's Open golf championship is set to bring 200,000 people into St Andrews.

However, it is the extended spell of good weather that many experts say has been the crucial factor in Scottish tourism shrugging off the impact of the chaos caused by the most extreme winter conditions for 50 years - which continued until Easter.

Record crowds flocked to the Royal Highland Show in Edinburgh last month as the event was blessed with four days of warm weather.

And the capital's Royal Botanic Garden, which the Queen is due to visit next week to open a new multi-million pound attraction, has seen visitor numbers soar 36 per cent year-to-year for the six months till the end of June, while Historic Scotland reported increases of 2.3 and 2.9 per cent across its sites in May and June respectively.

VisitScotland, which estimates that the industry supports some 9 per cent of jobs in Scotland, reported a 2.6 per cent increase in domestic tourism in 2009 compared to the previous 12 months. But it revealed yesterday that 2.3 million people had visited Scotland from around the UK in January-March, up 11 per cent on the same period in 2009.In February the agency launched a 2 million campaign, Perfect Day, featuring 14 Scots from all walks of life, to attract more visitors from Europe. And in May plans were announced for a 250,000 drive, So Close To Home - the first ever tourism campaign targeting "staycation" Scots.

VisitScotland chairman Mike Cantlay said: "It's time for a renewed domestic push to help get tourism growth back on track and, working in partnership with the industry, we can achieve exactly that. Holidaying on home turf is a growing trend and one which we're seizing with both hands. Even those who have lived in Scotland their whole lives will find that there is still much for them to explore and discover."

New figures produced by Deloitte for Scottish Enterprise reveal that Glasgow had a room occupancy rate of 70.5 per cent between May and January, a rise of one per cent compared to the same period in 2009. Edinburgh's occupancy rate rose 0.4 per cent, to 69.5 per cent of rooms filled, while Aberdeen's rate rose 1.5 per cent, to 67.7.

Scott Taylor, chief executive of Glasgow City Marketing Bureau, said: "The same survey shows our room occupancy rate was ahead of some of our major rivals like Amsterdam, Prague and Copenhagen for that period, and we're only just behind Paris and London. Unlike a lot of other European cities, Glasgow does not rely on the leisure market or short break tourism. We have very strong year-round conference and event-based tourism. It's not a one-trick pony.

"Although some conference business was affected by the ash cloud we had a very good first five months and we're expecting the second half of the year to be even better due to confirmed bookings for major events.

We had Snow Patrol, Pink and Sir Paul McCartney in June alone and Pope Benedict's visit is expected to attract a huge number of people to the city in September."

Separate analysis carried out at 45 of Edinburgh's leading hotels by Lynn Jones Research found occupancy was even higher for January-May, at 72 per cent, up 4.3 per cent on last year.

Sean Morgan, research manager at the firm, said: "The signs are that Edinburgh hotels will continue to outperform last year's performance. In particular, forward demand for hotel rooms during the peak summer season period - July, August and September - is tangibly outstripping last year's figures, with nearly 15 per cent more hotel rooms booked during the period compared to last year."

Colin Paton, chair of the Edinburgh Principal Hotels Association, and chief executive of the Portland Hotels group, said the BA strikes and volcanic ash-related problems were proving "a blip".

He added: "This year is shaping up to be slightly better than last year at the moment, and it's fair to say people are pleasantly surprised at how it is panning out. The leisure market has held up really well, although people are tending to book a lot later and are looking for value-for-money deals. I think the situation with the exchange rate and the economy is keeping people at home.

"However, I don't think we can afford to be complacent at all.

"It's a very competitive market out there and things could get a lot worse if more people start losing their jobs as a result of the spending cuts." zz