Hard times bring boom for tourism in Scotland

• Ben Nevis

And there are growing signs that Scotland's tourism industry could be helping the nation withstand the full brunt of the global downturn.

Mounting evidence of a boom year for tourism businesses in the face of the recession and fears over public spending cuts have triggered a campaign to boost the industry - and shield it from budget cuts.

Industry leaders have told The Scotsman of their fears about the prospect of a funding cut for the national tourism body, Visit-Scotland, after its bosses admitted they are having to plan for a reduction of up to 20 per cent over the next three years.

They have lined up to emphasise the importance of tourism to the economy, warning it would be short-sighted and "economic madness" for the tourism industry to be hit by spending cuts.

The UK government's spending review saw both VisitBritain and VisitEngland hit by 34 per cent cuts in their budgets over the next four years.

Ahead of VisitScotland's annual "Oscars" night - the Scottish Thistle Awards - in Edinburgh tonight, its chairman, Mike Cantlay, repeated a call from the organisation's recently appointed chief executive, Malcolm Roughead, to protect its budgets.

He said the industry had "huge potential for growth" by investing in campaigns to target niche markets including food and drink, adventure tourism and island holidays.

• Analysis: Domestic demand has major potential

Tourism experts say Scotland is being shielded from the economic storm by the low value of sterling against the euro and a growing trend for people going camping or taking self-catering breaks in their home country rather than flying overseas.

The Scotsman found businesses in every sector of the industry reporting a strong season this year, with some reporting turnover up by as much as 25 per cent, despite the impact of the extreme winter weather and the volcanic ash disruption in April.

It emerged this month that the number of domestic visitors to Scotland in the first six months of 2010 was up 3 per cent year on year, with the number of Scots taking holidays at home soaring 16 per cent over the same period.

Mr Cantlay told The Scotsman: "We have got to protect the destination marketing of Scotland. The industry has been very resilient to the recession so far but there is huge potential for growth.

"We need to sell Scotland as hard as we can. We want to convert more people from around Scotland and around the UK to take a holiday here."

VisitScotland has unveiled a string of campaigns targeting potential visitors from across the UK, including "stay-at-home Scots". Its own research has found almost 40 per cent of people in Scotland have never holidayed at home.

Mr Cantlay added: "Our own campaigns have produced a huge return on the investment we have put into marketing."We believe our 40 million budget will generate more than 400m worth of additional business this year, and the figures we are seeing coming through show the success of campaigns we have been running like Perfect Day, which I'm told have made a huge impact in areas like the Shetland Isles."

Mr Cantlay said major opportunities on the horizon included next year's Active Scotland programme, part of the Scottish Government's Homecoming "legacy" plans, and a "festival of the islands".

Stephen Leckie, the chair of the newly established Tourism Leadership Group, and managing director of Crieff Hydro, said: "There is no doubt at all that tourism is currently one of Scotland's key growth industries. There is no way the Scottish Government should be thinking about cutting back its investment, it would be economic madness. Such a move could wipe billions off the value of the industry."

Iain Herbert, chief executive of the Scottish Tourism Forum, said: "We've already seen what has happened with VisitBritain and VisitEngland, and regional marketing bodies are being wound up in England, but there is an opportunity for us now.

"This is definitely not the year to cut marketing spending in Scotland. It needs to be maintained.

"Although the overall picture is pretty good, a lot of sectors are finding it pretty tough, particularly in business tourism.

"There's a lot of uncertainty out there. People are booking much later than they used to, and are increasingly turning to the internet for last-minute deals."

Stewart Selbie, general manager of the five-star Turnberry Hotel in Ayrshire, said: "We've actually performed better than expected this year, thanks to growing numbers of independent travellers coming to the hotel, and we've had very good numbers of visitors from Europe and the United States.

"However, the big change for us is that corporate bookings have never recovered since the start of the economic downturn and that was responsible for around half of all our business a few years ago."

Tourism minister Jim Mather said: "Tourism makes a vital contribution to the Scottish economy, is strongly supporting recovery and carries huge potential for further growth.

"Almost a million overseas visitors spent 556m in Scotland during the first half of this year and the number of domestic visitor numbers increased by almost 4 per cent - vindicating VisitScotland's action to appeal to Scottish and UK visitors, and demonstrating that the industry's proactive efforts to boost the Scottish 'staycation' trend are paying off."