Economy, Energy and Tourism Committee,

Meeting date: Wednesday, May 28, 2008

Official Report 275KB pdf

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Tourism Inquiry

Good morning, ladies and gentlemen. This is the Economy, Energy and Tourism Committee's 12th meeting in 2008. We have three agenda items and will begin with our tourism inquiry. I am pleased to welcome the Minister for Enterprise, Energy and Tourism, Jim Mather, whom I thank for attending the meeting, along with his colleague John Brown, who is the deputy director of the Scottish Government's tourism and whisky legislation division. I hope that I have got Mr Brown's title correct, as his division seems to have grown since I last saw its name written down; I am glad that he handles whisky now—he should feel free to share that with the committee at any stage. I also welcome Richard Arnott, who is the head of the Scottish Government's tourism unit.

The minister is welcome to make a brief opening statement, after which we will ask questions.

I am delighted to take up the option of making a statement. It is great to be here. I welcome the inquiry and the committee's directing its attention to this vital sector, on which it is important to focus. I have been interested to read and examine the evidence that has been submitted and the wide variety of views that the committee has collected. That process has emphasised what I have found—that a lot of high-calibre people who are passionate about tourism are out there and are involved in trying to improve our tourism industry; that much scope exists for improving growth; and that there are lots of ideas for improvement and further investment.

The committee will know that we accepted the tourism framework for change that we inherited, but the Government has also adopted a strategy that supports the central objective of sustained economic growth. The target of growing tourism revenue by 50 per cent might not be exactly right, but it supports that principle. It also provides a mechanism to unite the industry around a common goal to get across the message that step changes are necessary if we are to achieve the numbers.

We need to consider the issue in the context of international competitiveness and the world economic climate, although the euro situation is a double plus for Scotland in keeping people here and bringing more Europeans here.

We are keen to consider additional goals, such as comparing the performance of tourism in Scotland with that of tourism in the United Kingdom overall and using tourism as a key element to match the UK gross domestic product growth rate, which is a major target, as members know.

We have several other goals. Tourism intelligence Scotland's initial output on walking tourism and tourism in the future has been well received, and funding arrangements should be completed shortly. We are on track to have 90 per cent of accommodation businesses taking part in the quality assurance scheme. The tourism innovation group has worked well to improve the use of technology and to encourage collaborative working throughout the industry. The VisitScotland.com website has improved following calls from the industry, which has helped to spread the use of e-tourism.

The key thing that we have done for tourism is to recognise the critical importance of tourism economically. That is why it has been placed at the centre of the enterprise structure. The established strategic forum, which ministers chair, ensures that the work of the enterprise agencies, VisitScotland and Skills Development Scotland is fully co-ordinated. We have had useful and well-attended meetings with industry stakeholders, at which my much-derided mind mapping has allowed us to identify many useful factors. We have gone beyond talking just to tourism businesses to talk to the drinks industry, the food industry, visitor attractions, golf courses and so on. I know from my constituency that there is wide interest across sectors in being more involved in tourism. The drinks industry in particular does not want to be semi-detached and wants to be part of the tourism sector.

We have ensured that the VisitScotland.com website has evolved and improved to meet industry requirements. We have started to establish the possibility that tourism can play an even more material part in our economic wellbeing as a key component of Scotland's overall sales effort. Tourism presents a face of Scotland that attracts and connects with people worldwide. It gives us new and repeat visitors; direct investors in Scotland; people who put money under management in Scotland; people who come and buy homes here; and even people who return to Scotland. In the long term, that will mean more demand for goods and services.

The vision for tourism is immense. We know that we have absolutely fantastic potential and an opportunity to use all our wonderful assets—scenery, festivals, heritage, culture, evocativeness, uniqueness, wilderness, wildlife, golf and so on. We need to develop among the people of Scotland the realisation that we have a fantastic product.

As we have shown in engaging the industry and others who are associated around its outskirts, the vital ingredient has been establishing a more collaborative, cross-selling and joint-marketing approach. Improvement all round will allow tourism to become even more central to economic wellbeing.

With the upcoming homecoming funding to support the return of the diaspora in 2009 and beyond, we are moving into a new phase in which it is likely that many of our signals will be replicated out there by the industry helping itself to remove inhibitors, improving the way in which it does things, adapting and innovating to do more and, most important, having the confidence to invest in itself. The industry in Scotland has a long way to go.

I look forward to responding to members' questions.

Thank you very much, minister. That was helpful. I should apologise at the outset; I will have to slip away for half an hour during the meeting. There is another meeting that I must attend.

The committee would like to discuss broad themes around the target of a 50 per cent growth in tourism revenue before we discuss more discrete issues that we have been considering over the past two or three months or so. I will start with two issues that we face, which some might describe as icebergs. First, what plans do you have to deal proactively with the perception of value and quality in the industry? Secondly, will you say something about fuel, which I would argue is a long-term rather than a short-term issue for all of us? That would help the committee.

An increasing awareness of value has come through in our sessions with the industry. The striking thing from our first session last year was the conclusion that a 50 per cent upgrade in tourism revenue was perhaps a bit too selfish and that we should be somewhat more altruistic towards the customer. It was thought that we should increasingly deliver better value and memorable visits that send people back home talking about Scotland in positive and glowing terms. I think that we are getting that idea into play with the industry.

This evening, Alasdair Allan will lead a members' business debate on fuel costs, in which what might be done for the islands will be discussed. It is clear that fuel costs depend on global energy demand and United Kingdom policy. Anything that can be done to ameliorate the current position is important.

The convener mentioned the overall target for growing tourism revenue. I am on record as being more enthusiastic about long-term goals that mean long-term improvements, and less enthusiastic about targets. We rightly decided to maintain continuity by accepting the 50 per cent target, which was part of the legacy that we inherited, because we believe that it is right to be ambitious and to generate a climate in the industry that will mean that it will be properly ambitious. The industry should be especially conscious of the very high quality of its products, the scope to improve their quality, and the scope to see happening in tourism what we are seeing in the Scotch whisky industry—essentially, a premiumisation of the product. We are seeing the Scotch whisky industry's ability to move its products upmarket, charge marginally higher rates, get higher volumes and materially increase margins.

Is that what you want to see happening across the spread of visitor attractions and accommodation providers?

The key word is "spread", because I still value the hostel side at the bottom end of the spectrum. It is important to condition youngsters and students to come and feel Scotland's magic so that they will come back to high-quality guest houses and four-star hotels with their families later in life as they become affluent. A spectrum exists. We must ensure that there is a wide array of choices and that people have a positive experience of Scotland, no matter what stage of life they are at when they come here.

Is it your job or the industry's job to deliver across that spread? More to the point, is it your job or the industry's job to sort out value for money? The committee has heard about that time and time again during the inquiry.

I genuinely think that that is a decision for the industry. I have been boring people by talking about a book that I have recently read by Eric Beinhocker called "The Origin of Wealth", the theory behind which is essentially the same as that behind "The Origin of Species"; it involves the survival of the fittest. The businesses in the economy that survive are those that adapt, evolve and move forward. We need businesses to do so across the whole spectrum in order to give Scotland a pipeline of potential customers. The more variety we have, the better.

On 4 February 2007, Tom Hunter ran an event entitled "The Second Enlightenment", to which he brought along a young guy called Simon Anholt. Anholt's argument was that if you want to maintain a vivid national brand, such as the one that we want to have around tourism, you cannot hang on to the coat tails of your predecessors or be content with what you have got. Instead, you have to have a pipeline of new and interesting projects. That needs to happen across the spectrum of tourism, so that we can create a vibrant ecology of businesses that are adapting, innovating, executing plans better and aligning with their target customers.

Therefore, your position—which you have obviously thought about in relation to other influences—is that it is for the market to decide. That raises the question of what the Government's role is.

The Government's role is to ensure that we market Scotland in the best way possible and offer support when there is market failure.

Are you aware of any market failure at the moment? How do you see the Government being involved in product development and in creating the pipeline of projects that you talked about?

There is a role for Government in relation to maintaining the continuity of the brand. The Scottish brand is one of quality. That is one of the things that Russell Griggs discovered when he was running Scotland the Brand. He got Professor Michael Porter involved in some work that showed that we are famous for reliability and integrity. The job of Government, society and VisitScotland is to ensure that we broadcast the message that Scotland is a place where people will get a warm welcome and a high-integrity product.

What specifically is the Government going to do to reinforce those positive perceptions of reliability? I do not know that every product across the tourism spectrum in Scotland is necessarily seen as being high quality or reliable, or as something that must be visited again.

I would not claim that we are looking at a game of perfect. However, you can see that the adverts from VisitScotland and so on get that message across. To be perceived in that way might be aspirational for some businesses at the moment, but the situation will be helped by the climate that this Government is creating in relation to the sector. For example, the First Minister is enthusiastic about the Virginia model, which involves focusing all aspects of Government on outcomes. In that regard, for some time, civil servants have been talking to Professor Mark Moore, of the John F Kennedy school of government at Harvard University. He is an advocate of public value, which involves ensuring that our public bodies are delivering value as perceived by their customer base—the industry, in the case that we are concerned with today. Further, I am keen on the thinking of John Seddon, who brings the Toyota approach of continuous improvement from manufacturing, through the service sector to the public sector. As the public sector takes that on board, I want it to wash back into the smaller businesses that have perhaps been too busy to think about continuous improvement and have got in a bit of a rut.

Earlier, you said that Government's role was simply to do with the marketing of Scotland and the provision of support in cases of market failure. Unless I misunderstood you, you were not saying that the public sector had any other role.

That limits us a bit too much. I was always taken with the approach that Honda has been able to take down the years. The key reason why Honda succeeded in becoming a major motor manufacturer was that its staff could handle a slight element of ambiguity and inconsistency from management, as long as there was a main direction of travel. The classic tale involves management saying, "Guys, we are going to be a major motor manufacturer. Meanwhile, John, you go off and make the Honda 50, and, Richard, you go off and make the lawnmowers."

We know where we are going and I do not think that being too regimented with regard to the definition of what we do is likely to be helpful. We need to flex and support as we go forward.

In relation to the Virginia model, will you be spelling out the outcomes that the Government expects as regards its contribution to marketing and the support of product development? Are they likely to be spelled out in detail so that not just the committee but the public can monitor the Government's performance?

That is entirely the concept. The key thinking is to have outcomes that people can see improve over time.

When might we be able to find out what outcomes the Government expects?

In due course, after debate with VisitScotland and others.

Will that be this calendar year or next year?

In due course, once we have discussed the matter with VisitScotland and others.

We note that response in the context of when our inquiry has to finish.

Minister, you made much of the importance of the quality of the welcome that tourists receive, which has been an important issue throughout our evidence taking. People are extremely important to the quality of the welcome. I want to tease out what you think the Government's role is in supporting a highly motivated and trained workforce in the tourism industry. That issue came up in evidence, along with the sustainability of the workforce, given that a high number of migrant workers are working in the sector. What plans does the Government have to encourage people to view tourism as a career, to ensure that there is a career structure in the sector and to provide the necessary skills and training?

In that context, how did the Government come to the decision to withdraw any support or funding for modern apprenticeships in tourism and the food and drink industry? I am extremely concerned about the message that that sends out. What will those apprenticeships be replaced with? I know that that does not fall within your portfolio, but it is extremely important to the quality branding issue. People really matter in the tourism industry and there is great concern, certainly among the people I speak to in Fife, about the Government's approach to skills development and training. People want to know where the Government is coming from.

You are absolutely right—people matter. They are the key element that can trigger a return visit; the connection that they make with visitors can make all the difference. The Government is committed to providing apprenticeships for school leavers. That is why more apprenticeships will be available for 16 to 19-year-olds this year.

In addition, we have the Hospitality Industry Trust working to help young people reach their full potential through the hospitality sector. Earlier this year, I went out to Ratho to talk to 400 bright young people who are involved in the tourism industry. The enthusiasm for the industry and their career prospects was palpable—it was as if I was standing up in front of 400 people who were capable of going on Mr Sugar's television programme.

The number of adult apprenticeships in the hospitality industry has been reduced because of low take-up. At the end of January 2008, less than 4 per cent of modern apprenticeships were in hospitality and tourism. We are working with Skills Development Scotland and the industry to promote tourism and hospitality as positive career choices. The industry is conscious that the migrant worker flow might not be a permanent phenomenon, given that the economies of countries such as Estonia and Poland are growing at much faster rates.

We are also working with the sector skills council on developing a training action plan to ensure that the industry has access to appropriate training in management, leadership, customer service, chef skills and the retention and recruitment of staff. Our engagement with the issue is serious, and we are looking to make progress with the sector skills council.

Thank you—you have answered a large part of my question. However, I am still concerned about the reduction in the number of modern apprenticeships in the tourism and hospitality sectors. You have increased the number in the construction industry, which I am pleased about, but the message is the reverse in the tourism industry. No matter what is said, a reduction in the number of training places in the tourism industry gives out a particular message. How will you address that situation? We have heard that there is a genuine concern about it.

Perhaps you can spell out the Government's reasoning for that reduction, minister.

The focus is still on the target age group of 16 to 19-year-olds—that focus continues unabated. The adult apprenticeship has, as I said, a low take-up, and only 4 per cent of modern apprenticeships are in the sector. There is no great record of retaining those people in Scotland, let alone in the industry. That is the issue.

We heard in a number of our evidence-taking sessions that thousands of different training courses are available across the country. If memory serves me correctly, I believe that there are thousands of different qualifications in the broad spectrum of tourism and so on. Can you comment on that vast array of available qualifications and training? Do we need, to use your own word, to declutter some of that?

Having taken on board the decluttering message ourselves, I am always susceptible to having further decluttering. The sector skills council is evaluating existing qualifications in tourism, which I hope will result in some pragmatism and decluttering in the sector.

I was struck by the lack of co-ordination between the industry and many of the training bodies. The tourism industry in general does not seem to be as well organised as other parts of our economy in linking with education providers and so on. How can the industry pull together a bit better?

We are dealing with relatively low demand. However, getting the industry together with the training providers has proven to be effective to date. VisitScotland or the Government could act as a facilitator, allowing people to talk matters through. For example, VisitScotland.com's repositioning of what it offered was a function of direct connection with the industry. Two sessions down at Victoria Quay and some intelligent letter writing to the newspapers got forward movement going. Any movement forward is a function of dialogue. However, I take Dave Thompson's point on board, and we will assess what we can do to have further dialogue and get a better focus on matters.

We certainly wish to pursue with you changes in VisitScotland.com and its role. Gavin Brown might want to pursue that—or other high-level issues.

I certainly want to pursue the issue of VisitScotland.com later, but I want to return to where we started, which was the 50 per cent growth figure, before we move on. I want to be clear about where the minister stands on the ambition of 50 per cent growth. He suggested in a previous answer that he was behind that ambition, but he also said that it was not exactly right and not altruistic enough. His position on the ambition of 50 per cent growth is critical. Minister, are you four-square behind it or not?

I am absolutely four-square behind it although, again, I am not naively saying that it is perfect. There is every reason to believe that, with a proper focus on investment, removing inhibitors, getting improvements and adapting and innovating across the industry, 50 per cent could look like a soft number and that we could achieve dramatic results in Scotland. A study in 2004 suggested that, in the 10 years from 1994 to 2004, 50 per cent more Americans classified themselves as Scots Americans. A similar movement probably also happened in Canada and in the rest of the UK. There is a big latent market there, a burgeoning confidence in Scotland and a realisation of just how world class our offerings are, whether we are talking about Edinburgh castle or Stirling castle, the Old course at St Andrews or the beaches in Harris. We must get that message across and get an increasing number of people in Scotland involved, so that everyone, whether they are a traffic warden or a bus driver, feels that they have a slice of the action.

I am with you on the quality of the offerings that we have throughout Scotland and am glad that you are behind the target, which was set in 2005 as a 10-year target for 2015. We are three years into that period, so let us take stock. In hard facts and figures, where are we in relation to the target?

We have improved marginally, but not materially, on the 2005 position. We have not inherited a great legacy position, but the climate is now right for us to seek to meet the target and to press forward to make that happen. The work that we did with Scottish Development International during the recess to attract more timeshare companies and other major resort players is interesting and augurs well for Scotland. We have looked at what has happened in Vancouver and on Vancouver Island. A company called Intrawest has a huge resort hotel on Vancouver Island, which has lamentably poor weather from October through to March. The hotel has 90-plus per cent occupancy rates and is being sold as a venue for storm watching. There is fair bit of scope for us to emulate that on our west coast.

The most recent figures that I have seen are the figures for 2006; unfortunately, those were marginally down. The figure for international tourists was up significantly, but the figure for UK and Scottish tourists was down significantly. I am delighted to hear that the figures are now marginally up, but where are those figures? Can the committee get access to them?

Members have exactly the same data as I have. In June we will provide the committee with data that will provide a clinical view of the position. The important message from the data is that we should be optimistic about what can be achieved. There are numerous steps that can be taken to remove inhibitors to investment and to make improvements. Down the line, we have the year of homecoming and the Ryder cup. I have been enormously impressed by the attitude and industry that are associated with the tourism framework for change. There is a coming together of transport and food and drink to bolster our tourism offering.

I return to the issue of the tourism figures. I agree that it is important to look forward and to have optimism, which we have, but the figures tell us what happened and are indisputable—they tell no lies. You say that the figures are marginally up from the time when the target was set. Have those figures—for which I have searched far and wide—been published, or are you saying that they will be published?

An update will be published in June.

Which figures will you publish in June? How up to date are they? Concerns about the quality of the data, which are often out of date, have been expressed to us. To what period do the figures that you will publish in June relate?

I ask John Brown to give you full details of the figures.

Any figures for last year that we have published so far are provisional. The final figures for last year will be published in June. As the deputy convener said, there have been and are doubts about the accuracy of the data, which are the best that we have. It is difficult to get good data, but there are other sources such as hotel occupancy rates. Just this week, hotel occupancy rates and yield on hotel rooms in Aberdeen showed strong growth—by far the strongest in Britain. There are a number of ways of measuring how tourism is doing. The data to which Mr Brown referred are the most important, but we must also consider hotel occupancy and business confidence, as measured by chambers of commerce. VisitScotland tends to put all that information together to get a view of how the industry is doing.

Will you write to us to give us not just the figures that Gavin Brown seeks, but the broader picture, so that we can include that in the outcome of our inquiry?

Yes.

Nice to see you again, minister. You will be pleased to hear that I am not going to ask about your mind mapping. When we heard evidence from Mr Clark of Scottish Development International back in March, he spoke about a destination development strategy that was being worked on. Mr Riddle, when he spoke to us a couple of weeks ago, talked about the Irish having a development plan and said that, although we have good capital investment, we do not have a national plan. As the minister responsible for tourism, what are you doing to develop the strategy?

We have had several meetings with the destination marketing communities. There are one or two notable successes, such as Fort William becoming the outdoor capital of the UK. We are keen to ensure that the work goes beyond simply producing a fixed position with a brochure and involves communities actively adapting and evolving their products, as places such as Fort William have done over the piece. That is where the thinking is on that.

Is that part of the pipeline of projects that you talk about? I am intrigued that you think that people will come to the west coast of Scotland to watch the rain falling through storm watch, whatever that is. Is there a national plan that says that we have got mountain biking in Fort William and we want more yachting in Oban? What are you doing to bring all that together?

We are encouraging evolution. To impose from the centre a particular strand of tourism in one area would hardly be likely to succeed. Communities are showing a lively interest in the issues. I ran a meeting in Oban recently to talk about the simple issue of extra marina places in Oban Bay. The meeting was on a wet Friday night in January—I think that it was 18 or 19 January—but 250 people turned up. Communities are interested in how they can evolve the offering and they are beginning to see the pattern of cause and effect and to realise that if there are activities in an area, people will linger for an extra meal or stay for an extra night.

During the election campaign, I asked Mr MacLeod, who runs the Ee-usk restaurant on the north pier in Oban, what one thing we could do to help his business most. I expected to hear something about water charges or business rates, but his answer was that he wanted one more attraction in Oban or greater awareness of an existing attraction, such as the golf course, so that people linger a bit longer. The key point is to bring communities together and to get them to stay together to evolve the destination locally, beyond simply creating a brochure and thinking that the job is done.

It is interesting that you mention that because, in evidence, we heard from Sandy Orr that he proposed a plan to develop a marina at Oban but was howled down by everybody who lives on the seafront.

It was interesting that, at the meeting in Oban, the fishermen were at first defensive about the idea of having yachts in Oban Bay and were dismissive and negative about the proposed positioning of the marina, saying that the pontoons could be turned to matchwood in a bad October. However, after two and a half hours in the meeting, they began to make positive suggestions about different positions for the marina. They began to see the cause and effect and that having more tourists and more people in restaurants would mean more restaurants buying local fish produce. The realisation was beginning to open up in their mind that they, too, are part of the local economy and that vibrancy in the community helps to keep their shops vibrant and to reduce their council tax as a result of there being more council tax payers in the area.

How do we deal with the gap in perception between potential developers—dynamic entrepreneurs in the field—and the reality on the ground? You say that there is an optimistic feeling in Oban, but how do you build on that so that the likes of Mr Orr are encouraged to continue with their plans? Do you think that it is the role of ministers to ensure that we have a national plan that is positive about development? The message that VisitScotland gave us at an earlier meeting was that we should be identifying opportunities and then looking for the Mr Orrs of this world to make it happen. What is your role in that?

The role is one of dialogue. I have become a big fan of dialogue—we get people into a room and talk to them. Anyone who tells me that that is just another talking shop needs to examine the results of that. People are exchanging ideas and working together.

SDI is doing a particularly valuable job in that role by searching for those who might come and invest heavily in new hotels and resort facilities and for those who would be interested in running new timeshare schemes in Scotland. Last week, I was invited to speak at an event that was held in Our Dynamic Earth by the organisation for timeshare in Europe, and which was essentially concerned with overseas timeshares. There was a room full of people who had a burgeoning interest in Scotland and a positive attitude to what can happen here and the demand that is out there.

There are now 50 per cent more Americans who classify themselves as Scots Americans, and the same phenomenon is happening in Australia, the rest of the United Kingdom, Canada and New Zealand. Along with the huge army of affinity Scots—people who feel an affinity with Scotland because of our scenery, our golf, our whisky or whatever—the market is enormous.

You have mentioned several times the Scottish diaspora, particularly in America. We heard evidence about the homecoming Scotland event and its fairly risible marketing budget. Do you think that £1 million is enough to spend on homecoming Scotland 2009?

You could spend an infinite sum of money on it, but the question is what the return would be. I suspect that it would be—

With all due respect, minister, we have heard evidence that the city of Newcastle is spending £10 million on events alone. You are spending £1 million on an event that is supposed to last for a year.

The total budget is £5 million.

That is still half of Newcastle's.

There is probably another £1.5 million coming in from the culture side. We have a much stronger brand than Newcastle—we are one of 15 or 16 countries in the world with a global brand.

Yes, but you have to invest in the brand.

The brand is constantly being invested in, by our being here and by this country putting out its network. The diaspora is out there.

We heard from Philip Riddle that VisitScotland received something like 180 applications for money for homecoming Scotland 2009, but was able to fund only about a third of them.

Absolutely, but many of those unfunded events will still happen—they are events such as Highland games that would be on anyway. Having been awakened to the idea, people are beginning to see the commercial benefit of pressing on with it. The feedback that we have had on the year of homecoming is exceedingly positive; so much so that it would be naive to put a full stop after 2009—we should try to make homecoming a perpetual idea. In terms of the development life cycle of people out there who have an affinity with Scotland, 2009 might not be the year that someone is 21, or retires, or has a wedding anniversary or whatever—

But you are a businessman. Surely you understand the philosophy of speculate to accumulate? If it is such a good deal, should you not invest more in it?

The key thing is to get a good return on investment and to encourage the industry, and others who can take advantage of the event, to invest.

Just yesterday, I was up in Dundee talking to representatives of Scotland Online, which hosts the ScotlandsPeople website for the General Register Office for Scotland. They were talking about dedicating a substantial part of the following year's marketing budget to promoting the homecoming, which they can see giving their website more hits. They predict that people will come back for genealogy purposes. Of the key themes of the homecoming, genealogy is up there at number 1—there are also Burns, golf, whisky and the enlightenment. The whisky industry is spending a great deal of money to give us a whisky festival next May, from Speyside to Islay.

If we analyse what will be spent on the year of homecoming, we find that it will be substantially in advance of £5 million and substantially in advance of the money that Newcastle is spending. We will get a substantially better return. The year of homecoming will have an afterglow and an afterlife into 2010, 2011 and thereafter.

John Brown mentioned the growth in hotel yield in Aberdeen over the last year and said that it was by far the strongest in Britain, which is a good place to start. Is that a consequence of the successful promotion of Scotland as a tourist destination, or is it a consequence of the high price of oil?

You and I could spend a couple of hours getting to the bottom of that one; it might be a combination of both. Vibrancy in the North Sea will be a major factor. Interestingly, at the "All-Energy 08" conference two weeks ago, the lord provost was bullish about the prospect of tourism in Aberdeen and about growth in the sector. I am very keen to see that. Oil and gas are booming at the moment, but a balanced, diverse economy in Aberdeen, including tourism, is really important. I notice that the conference took up pretty much every hotel bed in the city. However, there is still some scope to get high levels of occupancy at the weekends—on Friday and Saturday nights. Given the quality of the city and the amenity around it, we should be continuing to sell it—we should not be complacent.

There is a wider question here. In the course of the inquiry we have heard evidence to suggest that a 50 per cent growth in revenue would be a failure for Gleneagles or for Edinburgh, for example. For some parts of Scotland and for some businesses, that target is within the business plan anyway, or it is below their business horizon. There is an issue for other parts of Scotland and for other businesses, however, which might find that target harder to achieve. You have described your four-square support for the target. How do you apply it with respect to the diversity of Scotland?

It is a hearts and minds exercise, as much as anything, to wake people up to the idea that it is possible to achieve the target, to the fact that their current trajectory might be way below that level and to the idea that running their businesses just as they are is not a clever thing to do. Earlier, I mentioned that brilliant guy, Eric Beinhocker. He has a lovely line about stasis and keeping a business as it is. He says that stasis, in the fitness landscape, is a recipe for extinction. Those of us who have been in business and have simply tried to sell the same product or service without change year on year have found it increasingly tough as other people have been learning from us and have been making things that are more attractive.

The key is to develop a new mindset. If someone has a business, for instance a guest house or a hotel, and if it is performing with a steady-state growth level, setting a goal that is way above that requires them to do something different. The something different that they must do is to remove inhibitors, to execute better, to improve how they do things and to invest critically in better products that get higher occupancy and better, premium prices.

I am interested in your comments on the issue of having a plan or a framework for the growth of tourism in different parts of Scotland. One of the issues of interest in the north-east is golf tourism and the selection of appropriate sites for its development. A number of witnesses have pointed out that it would be helpful to inward investors to know where the preferred locations are and where public sector support is available for particular developments. Do you have a view on that approach, either specifically in relation to golf tourism or generally in relation to inward investment?

We are looking at that within the energy sector, with local authorities considering where the preferred areas for wind farms and so on might be. There is an element of common sense to the point. However, it is important that there is grass-roots involvement and that people can say how they want their area to develop. That said, there has to be a continuous presumption in favour of growth. We need economic growth and vibrancy in Scotland.

Do you see no role for Government or the national planning framework in indicating, for example, where is a good place for a marina or a world-class golf resort?

The national planning framework operates at too high a level. Those decisions need to be made more locally.

Essentially, the thinking should be led by local agencies.

Yes.

With regard to the immediate future, I have been concerned about issues such as the greatly fluctuating exchange rates, the rise in the price of petrol and the doubtful future of recent developments such as low-cost airlines. How do you plan to factor such probabilities into the advice that Government can give the tourism industry over the next three years or so, assuming that that is how long it takes things to stabilise?

Environmental factors impact on every economy. The key issue is to look for the advantages. The strength of the euro provides a positive double whammy for Scotland, because it makes it expensive for holidaymakers from Scotland and the rest of the UK to go to Europe and much cheaper for European holidaymakers to come here. That is the low-hanging fruit.

Equally, Canada's dollar has strengthened quite significantly, so it is not as expensive for Canadians to travel here as it is for Americans to do so, and Canada is connected to Scotland by such excellent services as Zoom Airlines. We should not be negative about American holidaymakers, of course. Only 20 per cent of Americans hold passports and many of those who come to Scotland are of a high net worth. Staying in a quality hotel in Atlanta, Austin, New York or Chicago is not materially less expensive than staying in a quality hotel over here. Therefore, we can look to continue getting their business.

I would like you to consider modelling a virtual Scotland, including economic factors, in terms of tourism. The great success, in a horrid way, of Scottish culture recently has been the launch of "Grand Theft Auto IV", in which people kill people in a virtual city that has been created for them. Instead of that, we could create a virtual country's economy and start charting whether growth in one section of that economy might detract from the growth of other sections. All the variables, such as rates of exchange and the price of petrol, could be factored in. Get a bright PhD student and you might be able to get that done quite quickly and cheaply.

I defer to your view on that, because I remember that, 30 years ago, IBM was supporting the Fraser of Allander institute to try to achieve a similar objective, but I am not sure that computing technology was able to handle the complexities at that time.

You mentioned "Grand Theft Auto IV". I had an interesting discussion yesterday with someone from one of our gaming software companies, who was interested in using their software to help educate children. Perhaps there is scope for that software to be able to get its head around some of the complexities and fuzzy issues that are associated with economics. I am open to any offers that can help us get further clarity.

After a discussion of low-cost carriers, the obvious topic for Lewis Macdonald to ask about is the route development fund.

A number of witnesses have told us how important the fund has been over the past five years in stimulating direct flights to Scottish destinations, thus increasing air traffic and tourism. The committee is aware of the reservations about continuing with the fund as previously constituted, but there has been great demand for VisitScotland to promote a destination marketing fund, targeting customers on potential new flights into Scotland. Either as a committee or as individual members, we have raised that issue with ministers over recent months. Have you any good news about route development to give to people who want to grow tourism in Scotland?

You have asked that question often in the chamber and elsewhere, and you will understand that European Commission guidelines constrain us from developing a replacement to the route development fund. However, VisitScotland continues to mount joint marketing campaigns with some of the airlines that operated direct routes into Scotland, and the Delta Air Lines link between Edinburgh and New York was recently launched. Back in March, I was in Houston, Texas, talking to Continental Airlines about how best to attract to Scotland the customers that the company is seeking to attract, who are high-net-worth tourism visitors and business visitors.

We are keen to ensure that we optimise traffic, but there is more to it than just the flight element. We have to make Scotland an attractive proposition and we have to broadcast what Scotland has to offer.

I certainly welcome the work on joint marketing. Do you acknowledge that, for potential developers who are thinking of establishing routes, it is important to have visible support and encouragement from the Scottish Government for those routes? Do you acknowledge that having a dedicated fund to support the routes would be helpful in conveying a positive message?

I share your nostalgia for the route development fund, but we have to face realities. Working with airlines to develop joint marketing campaigns is the best that we can do. We are actively pursuing such ideas; we have a vested interest because we have adopted the 50 per cent target and we want the numbers to increase. We will do everything possible to optimise the system. We want to motivate people to come across here and have a wonderful experience.

What motivates me is not nostalgia for the system that operated over the past five years but the desire to see a public commitment from Government. Government should say, "Yes, we understand the need for specific support for the marketing of Scotland at the other end of new routes." That would not involve direct subsidies to the airlines, which would be ultra vires, but it would involve clear branding and marketing and air route development. That would be a new and positive response to the current situation.

That sounds very close to the definitions in our discussions of joint marketing campaigns, which seem to have gone down well with the airline companies. The companies accept that we have to work under European Commission guidelines.

Minister, I want to bring you back temporarily to the issue of labour supply. The industry is concerned about what it perceives as poor-quality output from our education sector. Concerns have also been expressed about the low appeal of careers in the industry.

Like others, you have remarked on the significant number of migrant workers who are keeping the industry going. What will happen when the migrant workers go home because the economies of their countries have improved and we are left with an industry that still has low appeal and an output from our education sector that is still perceived to be of poor quality? Will Government have a role there? Once you have dealt with those questions, I will ask one more.

That is much more an issue for the industry. The industry must address those perceptions and seek to lift all the boats within its sector, including its own staff.

I understand that you have had several rounds of discussions with the industry. In those discussions, has it not raised with you concerns about those issues? Is it not looking for the Government to be involved?

Yes, it is, but there is an increasing acceptance by the industry that only it can address low pay and poor terms and conditions. Let us return to our objective of a 50 per cent increase in revenues. All the good advice from others who have gone through business transformation is that the real way to achieve that is by focusing on people, helping to build skills within the industry, helping to improve terms and conditions, increasing morale and getting people to buy in to the objectives that are set for the sector.

One side of an investment in the product is investing in the people, but there is also an investment in the quality of the product and infrastructure. We have heard in evidence that we have not got that quite right yet, although some changes have been successful. Is there scope for Government involvement in bringing the financial sector together with potential players to develop a range of mid-range and smaller hotels, especially in our towns and, for example, your own constituency? Can we match the successes that Sandy Orr and Donald Macdonald have had? Is there a role for the Government in encouraging that step change in quality?

That is fundamentally where we are going. Part of the strategy of activating our individual industry sectors involves self-nominating sectors coming in for consultation sessions with us. We have now done those for aquaculture, construction, drinks, manufacturing, information and communications technology, life sciences, chemical sciences, textiles and tourism—the lot. Part of that strategy is the prospect that we can bring together some of the people from different sectors to see where the synergies might lead us.

I am currently activating almost all the sectors in Argyll and Bute, including tourism, aquaculture, food and drink, transport, construction, registered social landlords, the voluntary sector, health care and education, with a view to bringing them together to see where the synergies lie. There are clearly key synergies between finance and the hospitality sector, given that the hospitality sector is capital intensive. The banking sector has worked well with certain players in the tourism sector to protect investments and give a good return to shareholders. We are keen to maintain that synergy.

I have a supplementary question about training. In giving evidence, Scottish Enterprise said that its role was to educate the managers and that the education of the workforce—the Indians, as it put it—was down to the industry itself. Further education colleges all over the country have catering courses of one type or another and of one quality or another. We have also heard evidence about the potential need for a hotel school or schools spread around the country. What are your views on that approach?

That is an interesting point, given that we have the diversity. I have drawn great comfort from talking to John Seddon and having him visit a number of times. His view is that step change of continuous improvement is achieved not through different central specifications, whether they are courses or qualifications, but largely through a process of continuously finding out what is working well and broadcasting that, but without a mandatory push.

It is a question of encouraging an evolutionary process by highlighting when a course or a company's internal training produces outstanding results. I favour our doing case studies of approaches that work and broadcasting that information succinctly, so that people can learn from it. That allows people to decide whether an approach would work terrifically well for them, whether to adopt just a bit of it, or whether what they are doing is better. They can then feed their conclusions back into the process.

Can you cite some examples?

We will return to David Whitton later—I am anxious to give all members the opportunity to put a second question to the minister.

VisitScotland's role in engagement with stakeholders and as a marketing organisation at national level—marketing Scotland the brand—is not in question. However, there is confusion and growing unease in localities. That is due in no small part to the growth of independent city marketing organisations. I will use Fife as an example, but many places in Scotland are in a similar situation. Fife is placed between the two cities of Edinburgh and Dundee. Fife Chamber of Commerce asked specifically who will promote Fife as a visitor destination, given that no one with the authority to make decisions, to strengthen tourism promotion and to strengthen local partnerships will be based in Fife. Local partnerships are important in the tourism industry, especially outwith cities. There will be a growing trend for people to go it alone on marketing, in particular. What is your view on that issue? Do you share the committee's concerns?

New partnerships in places such as Fort William and Aviemore are positive, especially if chambers of commerce are starting to recognise that tourism is a key sector. VisitScotland's growth fund now supports local area marketing campaigns and will complement efforts to establish local identity. At the first tourism session that we ran down at Victoria Quay, the plea from the floor was that we should allow an appellation contrôlée approach. Under such an approach, lots of different brands would be part of a Fife super-brand, which would be part of a Scottish super-brand.

The approach would create a multitextured Scotland, in which different localities sell themselves in different ways and bring in others such as local golf clubs and local authorities—even local churches—to help them to achieve that end. Last year a US congressman came to Scotland to retake his wedding vows in Lismore church. There must be several million folk with a great-great-grandparent, a great-grandparent or even a mother or father who was married in a local church in Scotland who might like to retake their wedding vows or to get married for the first time there. The church may be quite nondescript to us, but magical to them. Such possibilities are interesting. There is a case for letting the tapestry of Scotland evolve in the most vibrant way possible.

How does the Government view the role of the tourist information centres in the tapestry that you describe?

Some tourist information centres are working well, but others are not. Back in the spring, I ran a joint session with Peter Lederer at the Argyll hotel in Inveraray. He made the point that a new generation of people is coming through for which tourist information centres are not the first port of call. He said that, for people aged between 16 and 24, something that does not appear on their iPhone is not real. An evolutionary process is under way that will subject tourist information centres to market testing.

We have heard quite a bit about planning during our inquiry. In particular, witnesses have expressed concern about delays, the complexity of the process and the cost for business, in the context of not just small, local developments but bigger developments. Will you comment on planning in general?

What is the possibility of getting planners, SDI and Scottish Enterprise to work together on the pre-approval stage, so that we know where we are going and what we want from planning? If such an approach were taken, foreign or indigenous investors who wanted to develop a project in Scotland would find that much of the groundwork had been done and the planning process would be short. I am sure that you appreciate that the time and cost involved in the process can be a turn-off for businesses.

The Planning etc (Scotland) Act 2006, which received cross-party support, was the result of an acknowledgement that performance must improve dramatically. The First Minister is determined that the planning system, which might have put Scotland at a disadvantage in the past, must start to put Scotland at a comparative advantage. There is clarity around planning's purpose, which is to approve good projects.

I have been taken with how the issue is covered by John Seddon in his book "Systems Thinking in the Public Sector", which I have been promoting unscrupulously for months. He has interesting things to say about planning—I bounced his ideas off the chief planner, who was receptive to them. In essence, John Seddon says that the purpose of planning is to approve good projects and we need to measure the system's performance on its ability to be consistent, principled and forecastable and on its ability to generate clear understanding, on the part of the applicant, on what needs to be put in train to facilitate the flow to approval in the crispest way possible. John Seddon advises us to move away from planning targets, which can lead to decisions being made with a view to meeting the targets rather than adding value. For example, good projects might be rejected, approval might be granted but with onerous conditions that prevent the development from going ahead, and applicants might be asked to withdraw and resubmit applications.

The focus is on how planning can add value. Insights from other jurisdictions and people's keenness to implement the 2006 act in a fulsome and proper way give me confidence that we can achieve better results.

I know that the 2006 act is being implemented through commencement orders, but when will we see the improvements?

We can expect to see a proportionate incremental delivery of efficiency. I do not know at what rate that will happen, but the key point is that it is acknowledged by everyone from the First Minister down that if our focus is on increased sustainable growth we need a more effective planning system, which gives Scotland a comparative advantage over other jurisdictions that might currently have a competitive advantage over us.

You said that the VisitScotland.com website has improved. In what ways has it improved?

The website is now much more a listing facility, which is in line with what people wanted. It encourages self-sufficiency on the part of individual accommodation providers, who can use the web-in-a-box tool to take bookings. The changes have been well received by the industry, which recognises that the evolution of VisitScotland.com is more of a process than an event. It is not a case of saying, "Didn't like what we had first time. Here's what we've got this time. Hope you like it." The message that we have got from Nick Kuenssberg and Marco Trufelli is that there is an evolving process.

You referred to web in a box. What percentage of hotels, bed and breakfasts and other accommodation can be booked directly online via the VisitScotland.com website?

I am not sure, so I will delegate the question to Richard Arnott or John Brown.

I understand from VisitScotland.com that more than 1,000 outlets are listed that can be booked directly online. In addition, about 450 small tourism businesses have taken advantage of web in a box, which means that they have their own online booking system that is linked directly to VisitScotland.com. That facility will grow.

So there are about 1,000. What percentage is that?

I think that 12,000 tourism services are listed on VisitScotland.com.

VisitScotland.com has been around for a number of years, so we were surprised to hear in evidence from it of the low percentage of online bookings, which does not seem to have grown substantially. If we are serious about having an online portal, it is important that it should be possible, almost without exception, for bookings to be made online. What plans are afoot to ensure that that happens swiftly?

The key plan is to come into line with what has been said by people such as Alan Keith, who is one of the most strident critics of VisitScotland.com, and commit to evolve the system to facilitate high levels of online booking and awareness of accommodation offerings. You could say that where we start from is indicative of what has happened in the past regarding the general dissatisfaction with VisitScotland.com. I believe that that position has moved forward, and I expect the numbers of direct online bookings to increase over time.

Of course, we all hope that they will increase over time. However, in terms of making Scotland competitive, how many providers do we need to have online bookings available through VisitScotland.com?

The number should be as high as possible. In addition, I want as many providers as possible to have individual online booking facilities if they are not lined up with VisitScotland.com. We want as many of them as possible to be e-enabled, because that is how more and more bookings are being made by the new generations.

I think that everybody would agree with having the number as high as possible, but that can mean different things to different people. Does the minister have a personal view? In his opinion, how many of the 12,000 providers should be bookable online to make us competitive? I just want a ballpark figure; I will not hold him to an exact number.

This takes us back to what Noel Spare, who is a mutual friend of Chris Harvie and me, calls the danger of arbitrary numerical targets. It is far better to create a climate in which we constantly seek to have the numbers of online bookings improve over time. Many providers view getting involved in such technology as anathema and not why they got into tourism or why they run their guest house or B and B; they want a quiet life and the personal touch of the telephone or whatever. Were I to give a number, it would be an unhelpful arbitrary one.

You said that the Government could intervene in the case of market failure, and it has already made a commitment to deal with market failure in the provision of broadband. If we want to have Scotland online, for want of a better description, is there a role for Government in encouraging that to happen, in the same way that it has made it possible for business in Scotland to be online through broadband?

The best view to take on that is the Seddon view about broadcasting what works. It is about being able to tell providers how effective an hotelier has been since moving to an online booking service, compared with their previous system. Such an approach requires enthusiastic volunteers to take up the technology, rather than conscripts being offered a service that they might not use or take on board with any enthusiasm.

Initially, each exchange had a trigger level for broadband to be enabled. Those levels were around 5 per cent; now we are at 50 per cent plus. Indeed, there is a greater uptake of broadband in rural Scotland than in the urban environment. Given all that, surely a little push from the Government would get us much more quickly from these very low figures to a fairly high figure.

I think that a combination of broadcasting what works and using the options that are available from Scottish Enterprise and HIE to train people in the use of the technologies could be most helpful.

VisitScotland charges £400 a throw for web in a box. However, the north-east equivalent, which some of us saw last week, is free and people go after it like there is no tomorrow, because they believe that the future of north-east tourism lies completely online. Is that not an example of the type of approach that Brian Adam has quite rightly suggested?

That is very interesting. We should take the north-east's message and broadcast it to the rest of Scotland.

Is it not more a case of telling VisitScotland that it should provide the service for free?

Absolutely.

So it is not really a case of broadcasting anything.

None of us is in a game of perfect. However, when we learn about things, especially things that work, we are duty bound to broadcast them and, indeed, to look to VisitScotland to broadcast them.

It does not matter whether we are talking about VisitScotland or Scottish Enterprise. The Government has taken the view that business rates should be reduced if we are to encourage business to get on with the job. The convener and I are simply suggesting that some encouragement from a Government agency to go down this particular route might pay big dividends. After all, uptake is not what we—and, indeed, you—would wish it to be.

As you are in a learning lessons mode, minister, I refer you to evidence that we heard from a couple of witnesses in our inquiry. Mr Graham from Historic Scotland said that he had not been

"given a remit by ministers to be a … marketing organisation for Scottish tourism"——[Official Report, Economy, Energy and Tourism Committee, 26 March 2008; c 612.]

Mr Dunthorne and Mr Mason Strang, both entrepreneurs who run their own businesses, roundly disagreed with that.

Mr Worsnop of Rabbie's Trail Burners Ltd told us that, when he takes one of his minibuses on a CalMac ferry, he is charged double the cost of taking a caravan across. When he raised the issue with CalMac, he did not even get the courtesy of a reply.

Moreover, it appears that, when you decluttered Scottish Enterprise Glasgow, its tourism experts left and now tourism—for Glasgow, at least—is being dealt with by someone in Ayrshire. Are there any lessons that you can learn from that?

I understand why Historic Scotland might not want a marketing role—

It might not want a marketing role, but what about this country's iconic buildings and castles, which have been described as honeypots? Mr Graham might not want his organisation to be a tourist trap, but that does not mean that you cannot tell him that he is going to be one.

I have had some very interesting conversations with Mr Graham about certain locations up and down the west coast and how he might optimise his offering to ensure a spin-over into the local community. When I was with him on Thursday night, the message that was coming through loud and clear was that he had to be more entrepreneurial with that in mind.

You are right to say that these buildings are iconic assets. For example, a lot could be done to ensure that Urquhart castle on Loch Ness has more of an impact on the local village. Some players are doing well, but others are not quite benefiting from the castle's pulling power.

I have a strong interest in CalMac, as I represent Argyll and Bute, where it has a heavy presence. We are engaging firmly with CalMac to ensure that it listens to its community.

We were told that, as a result of the double whammy that I described, the operator took one coach trip off the ferry. That meant that 16 fewer people visited Mull, which had an economic impact on people in Mull. That was all because CalMac will not listen to reason.

We return to the fundamental proposition about which I become enthusiastic. In the landscape of Scotland, each and every agency that is out there is perhaps motivated to optimise its position in isolation. The key activity is to generate as much dialogue as possible in the sector, to see how agencies might work together better to optimise the whole system. We have a north star of a 50 per cent increase in revenues as a target. I want agencies to talk to one another in more open dialogue, so that the chemistry of their individual self-interest in working towards that goal leads them to be more collaborative.

Do you see it as your job to bring together all those organisations? After all, we are trying to sell Scotland as a unique destination, as you said. Scotland has a strong brand worldwide. However, it seems from much of the evidence that we have heard that public organisations are fighting each other.

Sure. I recognise that, but the landscape is changing, because people at the top of the organisations are getting the message. When we ran a session on aquaculture up at Inveraray recently, the Food Standards Agency came along and told shell fishermen and fin fishermen that its objective in aquaculture was to protect public health—full stop. After three hours, the agency left saying that its objective was now to help the industry to produce more and more healthy, safe and nutritious food, which would promote public health and economic wellbeing. Achieving that alignment is the key result of dialogue.

It is interesting that when I fed back that result to the National Economic Forum, I was buttonholed by Professor Graeme Millar, who is the Food Standards Agency's Scottish chair, who said, "Wait a minute—our objective at board level is to help the industry to produce more and more healthy, safe and nutritious food and to achieve economic growth and the public health benefit through the vehicle of a vibrant industry." The key message to him was that, somehow, that message had been lost between the board and the troops on the ground. That is why dialogue must be cross-sectoral. We must also have more senior people in non-departmental public bodies talking to people who do the work on the ground.

That is why it is a pity that the people at SE Glasgow had to leave.

Again, we are not talking about a game of perfect. The opportunity might exist for more people to come together to fill that gap.

I am in my 60s and I think that you might find that the bulk of my generation are information poor but cash rich. In reaching out to them, we should not abandon visitor centres, for example. We still search for some homeliness—the equivalent of the General Post Office phone box in "Local Hero"—by which to orientate ourselves. If we do not find that sort of thing, we become rather adrift.

I take that point. Where visitor centres work, they work well. There are notable examples of local centres that are evolving and adapting and are delivering additional services to create a more compelling reason for people to visit them. That is entirely healthy. Those examples need to be broadcast.

Marilyn Livingstone asked you about the range of possibilities for local promotion of destinations. In the inquiry, we have heard evidence about a clear distinction between destination marketing on the one hand and destination management on the other hand. You talked about promoting partnerships at local level. Which of those approaches did you have in mind?

I favour destination management over destination marketing because destination marketing tends to plateau with the brochure or the advert and then gets into a stasis that is not entirely healthy. Managing and encouraging vibrancy and new ideas among the community is the way to go, because it results in ideas coming out in conversation and dialogue that no one would have thought of if they had just been invited to make submissions to a secretary.

It has been said that when one attempts the hard job of managing one's destination, it is quite easy to slip back into the soft option of marketing it.

That is absolutely true, but I favour the Simon Anholt advice about maintaining vibrancy by having a pipeline of new and interesting projects. The key thing is that although someone might run their business in a static way, their customer base is not static—Anno Domini is at work. The customer base changes with every passing year, as young people come through. The key thing is that we have a destination development guide that sets out best practice and gives people a road map. On top of that, the bush telegraph allows us to listen to those who are doing well. It is worth finding out how they have branded their destinations and managed their fortunes.

If VisitScotland is the flagship organisation for marketing Scotland, how do we avoid duplication of that function by local partnerships?

Local partnerships must operate at a level below that at which VisitScotland operates—in other words, at the local level, where people have a passion for and understanding of the local area that it will never be possible for a central entity to emulate. That is where the excitement lies. There are hidden nooks and crannies, and areas whose suitability for particular sports appeals to people's psyches. It is interesting that at Aonach Mòr near Fort William, a facility that was designed for skiing has evolved—with enormous success—into a venue for downhill mountain biking. In addition, in the summertime, over-60s such as me can go up in the gondola to look at the view.

But Fort William is marketing itself as the UK capital of outdoor activity—it has its own direct marketing organisation.

Absolutely—and I applaud it for that. Marketing and management are not mutually exclusive. They are part of the one whole.

Are we not drifting into ambiguity, whereby we will end up with two different organisations marketing Fort William?

That is perhaps not such a desperate situation, given that, as I said earlier, Honda achieved its success despite a bit of inconsistency and ambiguity.

The more the management and marketing sides work together seamlessly and the more the marketing side understands all the nuances, potential and magic of what is on offer, the more likely a destination is to have a continuous stream of customers.

I will approach the issue from another direction. You will be aware of the recent reorganisation of VisitScotland, which aimed to set out who does what in a regional office such as the one in Aberdeen as opposed to at a higher, national level. Are you satisfied that that is understood by the industry and stakeholders in it?

It might not be fully understood yet, but it will be more and more. I am certainly spending as much time as I can on waking people up to the potential of the new reality. The strong message that emerged from the informal session that we had down at Victoria Quay was that even the smallest sub-area of Scotland could attract people as long as it had a brand and an evocativeness that would encourage people to come. Every sub-area helped to make the texture of every other layer further up the tree richer, because there was more to do in the area when people arrived in that part of the world.

Is there not a risk though? I acknowledge that you said that you recognise the need to communicate what has happened clearly, but you have been a bit ambiguous on whether local partnerships should market areas. Do you run the risk of creating a space into which local partnerships will go and thereby dilute VisitScotland's effectiveness in marketing Scotland?

No. All they can do is to augment that effectiveness simply by increasing the texture. That is why I have been spending time in Argyll and Bute. I have taken a structured approach there that I am happy to share with the committee. Last year, I activated all the communities—Mull, Islay, Kintyre, Bute, Cowal, Lismore and Oban—in my area; this year, I am activating all the industry sectors. We have already had a summit, which brought together all the players that produce services in or draw revenue out of Argyll and Bute, to get as much cross-fertilisation activity as possible. We wanted people to open up their minds to what could happen. Tourism is fundamental to every aspect. Even the accountants and lawyers in Argyll and Bute know that tourism is fundamental to their viability.

Okay. We will have to stop our discussion. I thank the minister.