Exclusive:Scottish tourism facing 'disastrous, gaping hole' as budgets run out

Scottish tourism is facing a “devastating, gaping hole” as budgets run out for organisations which promote and protect the country’s most popular destinations, it has been claimed.

Almost half (43 per cent) of Scotland’s Destination Management Organisations (DMOs) face folding by the end of the year with the number rising to 67 per cent in rural and island areas, new research has found.

Dalbeg beach, Isle of Lewis. The Destination Management Organisation Outer Hebrides Tourism - which promotes tourism and island businesses while protecting the island and its communities - said it will survive only for two more years given the loss of public funding. | Alamy/PA

Skye - the second most popular tourist destination after Edinburgh with up to one million visitors expected to be recorded for 2024- will lose its DMO by the end of the year, it has been forecast. Outer Hebrides Tourism said, at present, it was looking at a two-year survival rate.

Both organisations benefited from government funding made available through Highlands and Islands Enterprise at the end of Covid to manage spiralling staycation visitor numbers, which have continued to hold, and their impact on infrastructure and communities.

Mark Crothall, chief executive of the Scottish Tourism Alliance, urged the Scottish Government to step in and help protect the DMOs most at risk of collapse. He is advising the Government on its 2030 sustainable tourism strategy.

Mark Crothall, chief executive of the Scottish Tourism Alliance, has urged the Scottish Government to step in and protect the Destination Management Organisations most at risk of collapse. PIC: Scottish Tourism Alliance/PA Wire | PA

He said: “There is often the misconception that tourism just happens, when in fact our DMOs are working hard behind the scenes to market and manage their visitor destinations, ensuring tourism acts as a force for good.

“The loss of our DMOs would leave a devastating gaping hole in our tourism eco-system, significantly harming Scotland’s ability to drive its strategic and economic agendas, including the ambitions of our national tourism strategy, Scotland Outlook 2030.”

Figures show a 46 per cent rise in international visitors to Scotland in the first six months of this year when compared to the same period in 2019.

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Mr Crothall said: “More than ever, we need our DMOs to be at the heart of ensuring tourism happens in a sustainable way.

“The industry is fully committed to working with DMOs to find alternative funding streams to improve their sustainability in the long term. In the interim period, we urge the Scottish Government and its agencies to intervene to protect many of them from going under.”

While DMOs promote destinations and businesses, they are also involved in ground-level work in managing the impact of tourism. Crucially, they lobby on tourism policy, such as the incoming visitor levy and the potential cruise ship passenger tax.

SkyeConnect, the Destination Management Organisation, for Skye and Raasay and Lochalsh, only has reserves to last until the end of this year.

Cuts to funding come as tourist numbers hit record levels with 857,000 visitors to Skye in 2023, up nearly 30 per cent from 2019.

Skye Connect’s acting-chair Josephine Beavitt appealed to the Scottish Government to provide emergency funding to those DMOs most at risk.

Sarah Maclean, chief executive of Outer Hebrides Tourism, said staff had been cut from six to four last year, with numbers likely to be reduced to two in 2025. Subscriptions of around 500 island businesses are now the main income stream of the DMO, she added.

She said the group would last another two years if the funding situation persisted.

“We have a couple of years to play with and we are looking at all the alternatives,” she said. Ms Maclean said the loss of the DMO would have a “seismic” impact on tourism in the Outer Hebrides.

“It would be massive,” she said. “There would be a huge gap and at the moment I’d say there is not a public agency who could fill it.”

A Scottish Government spokesperson said: “The Scottish Government is committed to supporting the tourism sector, recognising the economic and cultural value it brings to Scotland.

“We acknowledge the difficult situation faced by some Destination Management Organisations and would encourage those facing issues to make use of the support offered by our economic development agencies.

“The 2024/25 Scottish Budget was set in the context of a difficult financial settlement and a difficult decision was made not to re-open the Rural Tourism Infrastructure Fund (RTIF) to new applications this year. However, a number of multi-year RTIF projects continue to be supported during 2024/25.”