National tourism website is handed £1.2m bail-out

VisitScotland is expected to pay 1.2 million within weeks to bail out the privately run website, which has incurred massive losses and been widely condemned by tourism operators since its launch.

The website, often the first port of call for potential holidaymakers, has consistently failed to make a profit, despite VisitScotland ploughing more than 1.87 million into it.

VisitScotland has an advertising budget of more than 20 million a year, with most of its promotional material directing potential holidaymakers to the website. But last year alone, the site ran up losses of more than 1.5 million.

Despite the sudden bail-out, which comes just months after the website was criticised in a Scottish Parliament report as "patently flawed and obsolete", its operators have insisted it was not on the verge of financial meltdown.

Marco Truffelli, chief executive of VisitScotland.com, who is expected to continue running the website, said: "The company was not in financial trouble and this has not been a sudden decision … something like this doesn't happen overnight."

Critics have long complained that there was too much emphasis on selling accommodation on the website, via a call centre, rather than encouraging people to contact businesses directly.

However, the tourism body has not been directly involved in the running of the website, instead favouring handing over responsibility to a public-private partnership, eTourism.

Based in a call centre in Livingston, West Lothian, the private company lists VisitScotland as its biggest shareholder and has been backed by Tiscover, an Austrian firm specialising in online travel services, and a French IT company, Atos. The site's woes have been partly blamed on eTourism changing hands several times since the company was formed in 2002.

However, VisitScotland insists changing habits of holidaymakers searching online have meant the way the website operated is now "out of date".

Philip Riddle, the chief executive, said work would be carried out within weeks to ensure the website had a "more inspiring" feel, but insisted a widespread overhaul was not required. However, he admitted he was having to fund the 1.2 million bail-out from his budget.

Mr Riddle, who said job losses were not anticipated, said: "We're having to find the money ourselves … we'll be taking it out of our capital budget by delaying refurbishment work at our tourism information centres."

One of the website's strongest critics, Alan Keith, chair of the Association of Dumfries and Galloway Accommodation Providers, said: "I suspect VisitScotland has had to take over the website before it had to be wound up."