Think-tank calls for VisitScotland to be axed

It claims the existing model is inefficient and that tourism does not warrant government aid.

"With over 65 years of increasing support from public funds, an exit strategy from the current funding model is not only required, but is long overdue," say the authors of the latest Fraser of Allander Institute report on the Scottish economy.

"Surely, the success of tourism in Scotland will be when Visit-Scotland develops an exit strategy that results in the closure of the existing organisation."

Professor Andrew Frew and Dr Brian Hay, both of the school of business, enterprise and management at Queen Margaret University in Edinburgh, acknowledge that VisitScotland is one of the largest national tourism organisations in the world. It has about 750 staff and a budget of 50 million - two-thirds of which comes from Holyrood - and yet visitor numbers have actually declined by one million since 2006.

The report says: "VisitScotland spends almost half of its grant-in-aid on staffing costs and this goes to support activities which are internally focused, such as facilities management, IT, HR and finance, all of which have little to do with the delivery of tourism."

The two academics say visitors numbers to Scotland declined from 16 million to 15 million trips a year between 2006 and 2009. Total spend by visitors was more or less flat at 4.1 billion a year, leaving the Scottish Government increasingly unlikely to achieve its 2006 target of growing tourism revenues by 50 per cent by 2015.

The report says over a third of hotel rooms, and about half of self-catering, B&B and guest house units, are unoccupied at any one time. "Tourism in Scotland has not benefited from the expansion of the wider UK tourism industry," it says.

Frew and Hay argue that almost all the functions of a national tourism agency could be done better by either the private or third sector.

They note that replacing Visit-Scotland with a completely private sector tourism body, "whilst perhaps a desirable goal, is unlikely to be acceptable".

Instead, they suggest a public-private partnership operating as a not-for-profit organisation is probably the most feasible long-term option. But they say any public funding should be generated through a specific "tourism tax", rather than from government coffers.

Mike Cantlay, chairman of VisitScotland, said he welcomed academic debate but disagreed with some of the figures used in the report.He said that almost a third of VisitScotland's income came from private sector partnerships, 80 per cent of total budget was spent on marketing, and two-thirds of its staff worked in information centres, "interacting with visitors on a daily basis".

He added: "At Tuesday's Scottish Tourism Week conference in Edinburgh, it was clear that the findings of this report are not reflective of the general mood of the Scottish tourism industry.

"The feeling that VisitScotland and the industry are working together and thriving came out very clearly - and this report fails to reflect the optimism that this new approach has encouraged."