Tourism boost can lift Scots economic gloom

MINISTERS have been urged to protect public spending on tourism after new figures underlined the major contribution the sector is making to Scotland during the downturn.

• New VisitScotland chief Malcolm Roughead beside the royal Yacht Britannia Picture: Dan Phillips

In his first interview since taking the post of VisitScotland chief executive, Malcolm Roughead admitted he is already having to plan for a budget cut of as much as 20 per cent over the next three years, as well as a slump in contributions from local authorities. But he told The Scotsman he has made a strong case to the Scottish Government for his organisation's 40 million annual grant to be frozen, because it is "right at the heart of the Scottish economy", bringing in 11 billion and supporting 200,000 jobs. He spoke as new figures revealed that Scotland has outperformed the rest of the UK as a result of its success in attracting "staycation" tourists.

In the first six months of 2010, the number of domestic (UK) visitors to Scotland was up 3.8 per cent year-on-year, with the number of Scots taking holidays at home soaring 16 per cent. The UK total was down 0.06 per cent during the same period.

The figures are even more impressive as they compare with 2009, Scotland's Year of Homecoming, which was supported by a major marketing drive.

Scotland has been worse hit by a slump in overseas visitors than the whole of the UK, with the number of tourists dropping just below a million, down 12.42 per cent on the same period last year, and compared to a dip of 3.84 per cent across the UK.

However VisitScotland pointed out that spending from overseas visitors had actually gone up over the same period, by 8 per cent, compared to a UK-wide drop of 1.05 per cent.

The domestic figures are compiled from the UK Tourism Survey from official data provided by British tourist boards. The Office for National Statistics publishes the International Passenger Survey based on airport patronage figures.

VisitScotland believes a 17 per cent drop in visitors from Europe can largely be put down to the impact of the ash cloud crisis, which triggered widespread closures of Britain's airports in April. The football World Cup, which was held in South Africa during most of June, has also been blamed for a drop of 5.9 per cent in the number of visitors from England.

Mr Roughead said: "The overall picture is very good when you consider what the industry had to deal with the ash cloud crisis, which had a huge impact right across Europe, and the airline strikes.

"There is no doubt that the 16.1 per cent rise in people taking a 'staycation' is very significant and shows that the trend is very much on the rise.

"People are obviously looking carefully at their levels of disposable income in the current climate, and what they can and cannot spend, but what is clear is that they still very much want to go on holiday.It's a must for them.

"Another positive that we're hearing more and more about is a gradual increase in business tourism, which has really been badly hit ever since the banking collapse in September 2008."

A 2.5 increase in visitors to Scotland throughout 2009, which was largely put down to the impact of Scots taking a "staycation" at home and the 5m Homecoming campaign, compared with a 6.8 per cent drop across the UK.

On the back of that success - and research showing almost 40 per cent of people in Scotland had never holidayed at home - VisitScotland has been rolling out a string of new campaigns targeting stay-at-home Scots, and potential visitors from around the UK, in recent months.

Mr Roughead added: "The early evidence is that our new campaigns are having an impact and we would obviously want to do more, subject to resources.

"I am having to look at a number of different scenarios for funding, from a freeze over the next three years, to funding cuts of five, ten, 15 and 20 per cent.

"I have made a strong case to the government that our core grant of 40m is frozen over the next three years and I've said to them I believe tourism is right at the heart of the Scottish economy. This is also in the context that we know our contributions from local authorities, which currently come to around 3.6m, are very likely to shrink in the next few years.

"Our campaigns generated an additional 400m for the country last year, which is a huge return on the funding we get."

Mr Roughead said he wanted a sea-change in traditional perceptions of jobs in the tourism industry and admitted that the worth of the industry was still under-valued.

He insisted VisitScotland was right to continue to place a heavy emphasis on traditional "iconic" images and brands, such as whisky, golf, tartan and castles, as these were the major draws in key markets around the world.

Tourism minister Jim Mather said: "While clearly we will support VisitScotland and the tourism sector to build on this success, we won't know the full scale or impact of Westminster's cuts until the UK Comprehensive Spending Review is announced next week. Thereafter, we will set a balanced budget that reflects the views of the whole of Scotland, and is focused on sustaining economic recovery and protecting frontline services."

Mr Roughead, who was promoted to the post of chief executive after nine years as the organisation's head of marketing, succeeds Philip Riddle, who was controversially ousted from the post after the Scottish Government appointed a new chairman of VisitScotland, Dr Mike Cantlay. Ministers were accused of plotting with Dr Cantlay to remove Mr Riddle behind his back, although the government insisted the matter was an "operational issue" for the tourism agency.