Tourism Industry (Restructuring)
The next item of business is a debate on motion S2M-2796, in the name of Alex Neil, on behalf of the Enterprise and Culture Committee, on its third report of 2005, "Restructuring Scotland's Tourism Industry".
I remind all members of the importance of the tourism sector to the Scottish economy. It contributes between £4 billion and £5 billion a year to Scotland's gross domestic product, employs about 197,000 people in Scotland and is one of the highest-growth industries that we have. For the past three or four years, it has outstripped many of the other so-called high-growth sectors. Rightly, VisitScotland and the Scottish Executive have set a strategic target of increasing the size of the industry by 50 per cent by the year 2015.
The subject of our report is the reform and reorganisation of the area tourist boards and the contribution that that reorganisation can make to achieving the strategic objective of a 50 per cent increase in the size of the tourism sector. I think that there is universal agreement in principle in all the major parties that the old area tourist board network was outdated and was not fit for purpose in the 21st century, not least because a membership-based system, relying on very small businesses for much of its funding, was not the way in which to market Scotland to the modern world. There is also general agreement in principle that it is right to have an integrated national organisation that promotes Scotland as a whole, as well as every corner of Scotland, both inside Scotland and, more important, to the wider world. I do not think that there is any disagreement about those points.
I thank the convener of the committee of which I was formerly a member, and that I am about to rejoin, for giving way. Will he concede that one of the points that I made during the committee's inquiry was that the different facets of the Scottish tourism product, which reflect the qualities of the different parts of Scotland, must be recognised, and that one homogenised whole is not necessarily best for marketing the wonderful facets of Scotland's diamond?
Absolutely. Although we recognise the need for homogeneity in the organisation, that integrated organisation offers a diversified product to the wider world, including cheese factories, Caithness and Sutherland and all that is good north of Inverness, as well as south of it.
I will ask the member to give way a second time.
I will refuse.
The principle is not in dispute. The inquiry by the Enterprise and Culture Committee addressed the nuts and bolts of the reorganisation and reform of area tourist boards. I will mention some of the issues that arose, more from the point of view of looking to the future and learning any lessons that need to be learned than from that of going over the coals of the past. The past is the past, and although we recognise that many aspects of the reorganisation could have been done better, we owe it to the industry and everybody in it to concentrate on where we go from here, rather than going over the history of the past two years.
There were four or five key issues that were addressed by the committee that will require to be continually monitored until the completion of the reorganisation process. First, we dealt with the process. At times, the level of communication between VisitScotland and members of the private sector—particularly those on the boards of the area tourist boards—was not perhaps all that it should have been. That led to a great deal of frustration, as was articulated by Robin Shedden, the chairman of the area tourist board network. There is a lesson in there for the future about how VisitScotland communicates with those in the industry, as well as with the industry's clientele.
Secondly, at times, many members of staff felt that they were not given adequate information at key stages of the process. It is always difficult to get it absolutely right when people's jobs are involved, but the committee felt that, at times, communications with staff could have been substantially better than they were. As a result, I know that in some areas we lost one or two good staff who would have been a major asset to the new organisation. Again, there is a lesson to be learned.
Thirdly, we looked at communication with wider Scotland. Sometimes people felt that they were in the dark about how far and fast the reorganisation was going.
The next major issue concerned cost. The original estimate of the cost of the reorganisation was about £2 million over two years or so, but the cost is now £6.5 million. Although that is a significant amount of money, in relation to the size of the sector it is a drop in the ocean. However, it is an indication of the need for much more detailed planning in such exercises.
Another major point, particularly for the future, is the need to ensure that all the stakeholders involved in the reorganisation and in the delivery of services—including the private sector operators in particular, as well as the enterprise network and the local authorities—are properly consulted by VisitScotland at every stage as we move towards completion of the process. To be fair to VisitScotland, it has set up special machinery to ensure that that happens.
In the light of Eric Milligan's report on people's first impressions of Scotland, I hope that the debate concentrates on where we go from here and, having learned the lessons of the reorganisation, on how we make sure that we achieve the strategic objective of increasing the size of the sector by 50 per cent in the next 10 years. If, at the end of the day and despite all the difficulties, the reorganisation contributes to that, it will have been well worth doing.
On behalf of the Enterprise and Culture Committee, I move,
That the Parliament notes the recommendations contained in the Enterprise and Culture Committee's 3rd Report 2005 (Session 2):
Restructuring Scotland's Tourism Industry: Report on the Review of Area Tourist Boards (SP Paper 305).
I am very glad to take part in today's debate, which provides us with an ideal opportunity to reflect on the great things that Scotland's tourism industry has achieved over the past year. I thank Alex Neil's committee for its very careful consideration of the matter; I thank Alex Neil in particular for his fine advert for Scottish tourism at the beginning of his speech. We can look forward with confidence to another year of growth for the wide range of businesses that make up the industry. As they grow, they will be strongly supported by VisitScotland's integrated tourism network.
After the outcome of the ATB review was announced in March 2004, much hard work went into ensuring that the tourism network would be ready for business in April. I congratulate everyone who made sure that it was ready.
Looking back for a moment, I should make it clear that the decision to merge the 14 ATBs into an integrated network was largely based on what people told us during our consultation exercise. Whatever else they thought, most respondents stressed the need for much better integration of national tourism policy with local delivery. Another important issue for the Executive was that, when taken as a whole, the ATB network was in a precarious financial state. Change was needed. However, that change was to keep the best of what was already there while providing a seamless service to visitors and businesses that was based on a sound financial footing.
I am glad to report that, after some hiccups last year, the transition to the VisitScotland network has been relatively smooth. That success is due to the huge commitment of all the partners and their staff who have been working together to deliver it. The early performance of the network is encouraging. VisitScotland's 2006 marketing opportunity package was sent to businesses throughout Scotland at the end of February and the current 39 per cent response rate is fully in line with the level of response at this stage last year. In fact, the number of businesses buying into the package, which is the replacement for ATB membership, is ahead of the rate at which businesses bought into ATB membership in previous years. So far, so good.
Another very encouraging aspect is the important role played by the Convention of Scottish Local Authorities and local authorities in supporting the development of the VisitScotland network. Indeed, the funding commitments that VisitScotland has now received from local authorities for this year are in excess of the budgeted level. That augurs well for the future, although future funding from local authorities will depend on the development of good tourism partnership plans in each area of Scotland.
It goes without saying that all of that has been achieved at a cost. The Executive provided additional funding to VisitScotland last year and this year to cover the costs of planning and developing the network. As I have already confirmed to the committee and as Alex Neil pointed out in his speech, the final figure for those costs is £6.5 million over the two years. I can also confirm that substantial additional funding was not diverted from the VisitScotland marketing budget, but was secured from elsewhere within the Executive's budget. The tourism network is expected to achieve savings from next year, and VisitScotland will retain that money for marketing.
The VisitScotland network has made a strong start and tourism businesses are seeing real benefits from our increased investment in VisitScotland's marketing budget. Last year, Scotland experienced a 20 per cent increase on the previous year in the number of overseas visitors. Furthermore, occupancy figures for almost all types of visitor accommodation are at their highest levels for the past five years or so. We are getting the message out there that Scotland is the best small country in the world and is a must-visit, must-return destination.
As I said in my recent letter to the convener of the Enterprise and Culture Committee, I very much welcome the committee's report to the Parliament on the restructuring of the ATBs. Although there are lessons to be learned, I was pleased to note that the committee supports the general principles of an integrated support structure for the tourism industry in Scotland. I have already made a commitment to the committee that I will regularly report to it on the outcomes.
I am absolutely convinced that the decision to merge the ATBs with VisitScotland was right and that it will underpin our shared ambition to grow the value of tourism by 50 per cent over the next decade.
I suspect that few issues will divide us today, which is to be welcomed as we debate a key industry for Scotland. The industry will make an even more significant contribution in the future, especially if we can get it right.
It is fair to say that considerable concerns arose over the process of changing the area tourist boards. Some of those concerns have been addressed, but others remain—in particular, those that were expressed by Mr Shedden. I am delighted that the threatened disappearance of local authority funding has not happened. I welcome the evidence that the committee heard that local authority funding has been at least maintained and, in some areas, increased. I also welcome the minister's comments that the private sector is getting directly involved.
As the committee convener suggested, we should be moving beyond the committee's report and considering how to create mechanisms to allow the development of this most important industry. Opportunities are arising now, and will arise in the future, and we will have to be nimble in order to achieve the growth that we seek and to get our share of the 4 per cent per annum growth that is predicted for the world market over the next decade.
I commend "The Da Vinci Code" tours, which are capitalising on one of our assets to the benefit of everybody involved. However, I have some concerns about the challenge-funding approach to marketing, which requires a lot of time and effort and the engagement of lots of partners in order to arrive at a solution. That is fine when we are talking about a long-term project, but if we want to react quickly to a situation, we need to have quick mechanisms in place as well.
There has recently been a significant growth in direct flights from a number of Scottish airports to important markets. For example, I recently met representatives of Aberdeen hoteliers who are trying to capitalise on the new flights between Belfast and Aberdeen. They were engaging with local partners to try to develop the marketing of the city. We could help such projects by making our procedures less bureaucratic and by ensuring that funding mechanisms are available locally and that decisions can be made locally. We must have flexibility to allow us to react to what are often quick changes in the market. Often, we do not have a lot of notice that new flights are coming.
The minister will forgive me if I exercise one of my hobby-horses. One of the Executive's niche markets is genealogy tourism. We have opportunities to make our new system work to our advantage. Specialists in niche markets could work closely with local hubs. A way of helping that from the centre would be to ensure that we have as many records available in Scotland as we can.
World war one records held by the Ministry of Defence were under some threat but I gather that the Western Front Association now has access to them. The minister and her colleagues in various departments could talk to the MOD and the Western Front Association to find out whether we could bring the records of the Scottish regiments or Scottish military personnel back to Scotland. They could be placed in Edinburgh Castle, the regimental museums or even the new family history centre that is being created in Edinburgh.
The minister may wish to work with her colleagues—in particular, Mr McCabe, who is sitting on her left—on census returns. Our census records should not be closed for 100 years. We are discussing whether new questions should be in the 2011 census, and I suggest that we should invite people to allow their records to be opened up so that family historians can get access to them. That would be another way of broadening our market.
I think that I have used up all my time.
And some additional margin.
I congratulate the Enterprise and Culture Committee on its report and tend to agree with its criticism of tourism policy since devolution.
In the light of the extensive upheaval that our Scottish tourism industry has faced over the past five years, it would be in no one's interests to go back to square 1 now, but we Scottish Conservatives remain deeply concerned about the centralisation of structures and the corresponding loss of local knowledge and expertise. That concern was highlighted in comments to the committee from the Scottish area tourist board network, which branded VisitScotland's management style as
"centralist and hierarchical with no ability to meet local needs."
That must improve.
We are particularly anxious about the future status of local tourist information centres because, especially in rural areas, they are focal points for tourists on the ground. It is ironic that, in its reorganisation, the English Tourist Board is moving away from a centralised system, in an effort to give back power to the shires.
We are in Scotland, not England. I am familiar with what has happened in my area since the reorganisation and with the measures that have been put in place. What is taking the place of the area tourist board in the member's area?
All I know is that we were under an excellent tourist board—the Argyll, the Isles, Loch Lomond, Stirling and the Trossachs Tourist Board, which was known as AILLST—which was run by James Fraser. There was no need for change.
I agree with recommendation 41 of the committee's report, which states that the Minister for Tourism, Culture and Sport should
"ensure involvement at the highest levels within the new network from the private sector".
It is paramount that industry operators feel engaged and that the Executive fully recognises both that tourism is Scotland's biggest industry and that tourism operators play a vital role in our country's economy.
The private operators tell us that they need a playing field on which profits can be made so that reinvestment can take place. Recent wage increases and increases in gas and electricity prices of between 40 and 50 per cent have made life difficult enough, but the excessive regulations—which are typical of a Government that seems to think that private business can always bear the costs of its politically correct schemes—have made the situation even worse. The industry wants practical help that is delivered with speed, rather than endless top-down strategies on which it has not been properly consulted.
I ask the minister what VisitBritain is doing to market Scotland and why the Executive persisted with visitscotland.com, which respondents to a poll for tourism businesses that the Scottish Chambers of Commerce conducted last November said had had no visible effect on Scottish tourism. Ten years ago, the same experiment was tried in southern Ireland with an operation that was called Gulliver. That did not work either, because practical tourism operators were not involved in the strategy. We should learn lessons from Ireland, where the situation has improved since the Government and the industry started working together.
One minute.
Scottish tourism, the vast bulk of which consists of smallish hotels and bed and breakfasts, cannot charge over the odds. The question on the lips of everyone in the tourism industry is: what will happen to that market—in which short breaks play an important part—as a result of the recent downturn in the retail trade? The crucial question is whether people who are deciding to cut back on items such as new clothes and other non-essential items will also cut back on short breaks. I have talked to industry players who think that they know the answer. We should ensure that a short break in Scotland is seen to offer value for money and to represent a saving for hard-working families. Any market focus should be on dealing with current obvious setbacks such as the one I have mentioned, rather than on strategies that affect only a few.
Under the Government's strategy, 14 area tourist boards have been abolished to be replaced by 14 hubs. What was the point of that? The answer would have been to examine the strengths of the existing system, which lay in some of the tourist boards, such as AILLST, Perthshire Tourist Board and the tourist boards for Glasgow and Edinburgh.
Will the member take an intervention?
Am I allowed to, Presiding Officer?
As the minister wishes to speak, I will allow her to. We have a minute or two in hand.
I find it hard to put together the two opposing arguments that Mr McGrigor seems to be making at once. He argues both that everything is being centralised and that we have replicated 14 ATBs with 14 hubs but, regardless of what he thinks, it is a fact that 90 per cent of VisitScotland's work takes place outwith the centre.
You have one minute to wind up, Mr McGrigor.
What is happening at the moment is that English headhunters are on the prowl in Scotland; they are looking for people to run their new area tourist boards. It would be a great shame if Scottish expertise were to be lost because a Scottish Executive process was dogged by uncertainty, indecision and consequential delay.
The Conservatives think that tourism is far too important to be dealt with by the Education Department and to be bundled together with culture and sport. When we come to power, we are committed to the creation of a new department of enterprise that will incorporate tourism. That will put tourism at the heart of Government enterprise policy, which is where it should be.
Four members wish to speak in the open debate. I can allow five minutes per speaker.
I support and welcome the comments that my convener, Alex Neil, made in opening the debate.
Huge mistakes were made in the review of the area tourist boards and in the restructuring: we saw real mistakes in communication and management. I hope that lessons have been learned. Now is the time to move on.
We must move into a world in which our aim is to grow the Scottish tourism industry by 50 per cent in the next 10 years. That is a goal that we all support and we should do that by focusing on the staff who work in the tourism industry. VisitScotland's research briefing, "Tomorrow's World, Consumer, Tourist", which I think was published this week, says:
"For employers, encouraging, pampering and nurturing their star talent (being employee-focused) will become a pre-requisite."
For all the current talk of customer-focused companies, perhaps in the future it will be seen as of equal and critical importance for a company to be employee focused. It is perhaps ironic that that research briefing emanated from VisitScotland. I hope that the VisitScotland management has read it and has taken on board the comments that it makes. For companies to focus on their employees is absolutely key to building our tourism industry.
Does the member agree that, in order to have a good tourism industry, we need to look after the people who are employed in it? Does he agree that we need to pay people decent wages and ensure that they are professionally trained? Should not we up the ante and start to respect the industry more?
I agree very much with those comments. Indeed, what Rosemary Byrne asked leads on to the next point that I want to make, which is about the problem of jobs in the industry often being low paid; in fact, they are frequently as low paid as it is possible to be because tourism industry jobs are often seen as being unskilled, short term and casual. We must train high-quality staff and we must train management in how to look after high-quality staff. We must also pay staff properly and, above all, we must create a year-round industry as far as it is possible to do so. The shortness of the tourism year is the real problem in creating a highly skilled workforce.
Although I accept the point that Chris Ballance makes about low wages, which should not be the case in the industry, does he agree that staff at all levels must in return deliver the highest-quality product? After all, internationally, we face an increasingly competitive industry.
Absolutely; the future for Scotland's tourism lies in providing a top-end, high-quality product. For that we need high-quality staff who are recompensed properly for doing their jobs.
Extension of the length of the tourism season is the key to getting this right. Given that we are tied to a tourism season of only five months, it is inevitable that we will have all the problems of casualisation and short-term working and of staff who are not valued enough. We also have to remember that our core tourism market is in short-break Scottish tourism and in tourism from northern England, both of which are markets that it would be easy to grow during the seven quiet months of the tourism year. We must focus on that market in terms of the year-round capability of our tourism industry.
I will make two more points in my last minute. First, I congratulate the tourism and environment forum on producing—with VisitScotland's assistance—the "Wildlife Scotland" brochure, which was published this week and which I expected the minister to mention; perhaps it will come up later. Secondly, I appeal again for VisitScotland to spend more money on promoting the green tourism business scheme, which its members feel has for a long time been largely ignored by VisitScotland. In a recent survey, something like 75 per cent of its membership felt that VisitScotland was not adequately promoting the scheme. To promote the scheme, we are looking for a brochure that lists every hotel that is part of the scheme and for a real partnership between VisitScotland and the GTBS. VisitScotland should not view the GTBS as a niche item, but should enter fully into partnership with it as a real partner.
Tourism in Scotland is already a success story, but our aspiration in Parliament is that it should be more successful. The target of 50 per cent growth in the industry is ambitious, but with a 20 per cent increase in the number of overseas visitors last year—greater than in the rest of the UK—and the £14 million extra that has been provided by the Executive to market Scotland abroad, we can afford to be optimistic. Jamie McGrigor does not seem to be keen to share in that optimism, but the rest of us are. To achieve the success that we want, those positive signs and the extra investment must be backed up by successful reform of the way we market Scotland and support our tourism businesses.
It is four years since ministers took the first steps to begin the process of reform and the Enterprise and Culture Committee has monitored the process closely during that time. As with most change and reform in major organisations, lessons can be learned from how it has been carried out. However, the committee report rightly focuses on the questions that are of overarching importance: how will the new integrated network promote Scotland better abroad? How will it support tourism businesses better in every part of Scotland? How will it bring more people to Scotland to enjoy an excellent tourism experience that will bring them and others back?
One concern that was expressed by the committee was about how moving to a national integrated network will help to deliver local tourism strategies, which was referred to by Jamie Stone. I am confident from what we have heard that the reforms will deliver for every part of Scotland. We heard about a gateway strategy to encourage tourism from the cities into other parts of Scotland; that has encouraged tourism outwith the cities, but a gateway strategy alone will not deliver the increase in tourism that we want in each part of Scotland. That is why it is so important that the new network will take into account regional needs, with specific service agreements with local authorities, and that VisitScotland hubs will be based throughout the country. They will deliver services that are tailored to local tourism businesses and will continue to work on regional strategies—the local tourism action plans. That kind of service is vital for the network to attract the buy-in and investment that it needs from councils and local businesses, whose support and funding are key to its success. As we have heard from the minister, that buy-in is taking place, and we can be confident that it will continue in the future.
There is evidence that such an approach can work. One example is EventScotland, which has been successful throughout the country. For example, in my region the seniors golf tournament has come to Aberdeen. VisitScotland itself has now twice brought its own expo event to the city and Aberdeen has Scotland's fastest growing airport. People will have to be reassured that the new marketing strategy will incorporate more than just a few of our most famous landmarks, but the building blocks are there for it to work for the whole country.
VisitScotland is well placed to deliver on its national goals, some of which the previous Enterprise and Lifelong Learning Committee identified in its work on tourism over a number of years, for example to encourage high quality throughout the industry, to provide support for businesses to develop—including, as Chris Ballance said, developing staff skills in the sector—and to share best practice throughout the network, which we clearly could do much better. I have spoken to many people in the industry who welcome that approach and who believe that a new organisation will be easier for them to work with, that it will provide them with services and that it will cater more for their needs.
As VisitScotland is already having notable success—for example, its website is doing well and the increase in tourist numbers suggests that it is making a contribution—it is well placed to provide the leadership and unity of purpose that will ensure that the tourism industry in Scotland reaches its full potential and plays its full part in delivering the objective that Labour members have for economic growth in Scotland.
The Enterprise and Culture Committee will, rightly, monitor progress closely, but it is no surprise that other countries are now looking to how Scotland has reformed its tourism sector to see how they can improve theirs. I point out to Jamie McGrigor that one of those countries is Ireland, which is examining our reforms to see how it can improve tourism.
Sorry, but I am in my last minute.
Ireland realises not only that we are having success now, but that we have put in place the right structures and strategy to achieve our goal of even more people coming to Scotland to enjoy excellent visits and all that our great country has to offer.
As the convener of the Enterprise and Culture Committee said, tourism is probably our first business in Scotland. That is true in areas such as Dumfries and Galloway, where tourism is certainly the first business, although it is perhaps first equal with agriculture. It is interesting that many people who are in agriculture seek to diversify into tourism.
Clearly, as Alex Neil said, the previous structure was unsatisfactory. Two examples of that come to mind, both of which predate devolution—Jamie McGrigor should note that the problems did not start in 1999. First, the chairman of Dumfries and Galloway Tourist Board was once replaced at an annual general meeting simply because his opponent, who was in another group in the board, managed to bus in more people to the meeting. I make no comment on whether the chairman should have been replaced, but deciding on the head of the board on the basis of the number of people who turned up to a meeting was no way in which to run the single most important business in Dumfries and Galloway.
A second example is a substantial town in Scotland that withdrew its funding from the local area tourist board because it thought that the board was putting too much emphasis on the rural hinterland of the town, rather than on the town itself. That town obviously had no concept of a gateway and did not realise that, to get to the countryside, people usually have to go through a town. There will always be conflict and tension between a national strategy and local interests, but we need an organisation that addresses that tension.
It was easy to spot the problem—although if members listened to Jamie McGrigor, they might be forgiven for thinking that there was no problem at all—but the solution was by no means as obvious. At the risk of incurring the wrath of the convener of the committee, I want to think a little about the past. The review of the tourism structure was announced in May 2002 and the results of the review were announced in March 2004. The delay might have been acceptable or understandable if something of real substance had emerged but, as the report points out, the committee said in its interim report on the matter—when I was the convener—that it was
"surprised and disappointed at the great deal of uncertainty as to the structure that would replace the Area Tourist Boards … despite the fact that the issue had been under review for 2 years".
That uncertainty and the fact that issues were unresolved after two years contributed to some of the problems with communication and staff morale that arose subsequently, to which the committee's report rightly refers.
We must ensure that those problems are not repeated in the subsequent two stages of the process, because tourism, more than any other industry, depends on its staff. Therefore, it is important that we retain staff and do not lose them because they are uncertain about their future or because their morale is depressed. As Richard Baker said, many strides have been made towards making our industry much more professional. It was curious that Jamie McGrigor seemed to think that our future in tourism lies in the low or cheap end of the market—I cannot think of anything more contrary to the truth.
I will give way to Mr McGrigor, as I have mentioned him so often.
Is the member referring to small hotels and bed and breakfasts as
"the cheap end of the market"?
I think that those were Mr McGrigor's words, although I will be glad to check the Official Report.
Mr McGrigor talked about the low end—in terms of price—of the market, but that is not where the future of the industry lies. Neither does it just lie in the short-break market, as Chris Ballance suggested, although that market is important and is capable of expanding throughout the year. Business tourism—conferences and so on—is perhaps even more important, and that market is also capable of extending throughout the year. A purely local structure would struggle to cope with that type of tourism.
In the report, Peter Lederer is quoted as saying that the tourism network Scotland project
"is a framework; it is not the answer to all our prayers. TNS in itself will not bring a single visitor to Scotland."
Later in the report, however, we learn that the transitional costs are £5 million. In his speech, Alex Neil uprated them to £6.5 million. We have spent £6.5 million, which has not brought any extra visitors. I am therefore glad that the committee will continue its work and continue to monitor the success of the project.
Like other colleagues, as a member of the Enterprise and Culture Committee I have sat through many long hours considering the lengthy gestation that has brought us to where we are now in the organisation of the area tourist board network in Scotland. Having been party to that discussion, I want to sum up with a few conclusions and observations.
First, there is the question whether structural change was necessary. I am often critical of our rush to structural reform as a proxy for other types of improvement and change that need to take place, but I am persuaded that structural change was necessary in our tourism network. Could it have been handled better? Of course it could. There is not a change management project in history that could not have been handled better and from which lessons could not have been learned. It is particularly difficult to manage change, especially in a public sector context, with the public gaze and the scrutiny that that entails.
That said, it is important to ensure that the transition continues to be managed effectively, and it is right that the committee and the Executive—and indeed others—monitor progress. However, I firmly believe that it is time to move on. Some of the observations and concerns that many of us expressed at an earlier stage in the committee's investigations have, to be frank, been dealt with. The key now is to exploit the potential of the new structure. Before I move on, however, I have an observation to make about the new arrangements in VisitScotland. It is a point that is perhaps quite different from points that others have made. If I have one genuine disappointment, it is that when I picked up the VisitScotland magazine that told us the story of the new arrangements and which included a series of pictures of the new top team, there was not one female face to be seen in that top team. In an industry in which women play such a significant part at a range of levels, that ought to be addressed.
There are enormous opportunities to be exploited in the new arrangements. The debate about the balance that is to be struck between national and local strategies is interesting. Alasdair Morgan used variously the terms "conflict" and "tension". He is right to say that there will always be a certain tension in that regard, but I hope sincerely that we do not view it as a conflict. At the end of the day, Scotland's strength is the sum of our parts: genuine integration within the network will give us a real opportunity to build upon all of those parts.
I want to use Edinburgh to illustrate how we can move forward under the new arrangements. People are often sensitive when Edinburgh or other parts of the country are singled out for mention, but I will live dangerously and do just that. Edinburgh has a special role; it is not the only gateway to Scotland but it is—statistically, factually and objectively—the main gateway to Scotland. About half of all overseas tourism trips to Scotland include an overnight visit to Edinburgh. It generates 18 per cent of United Kingdom tourism spend, and a third of overseas tourism spend in Scotland. However, I would be the first to say that we need to make a reality in culture and practice of what a gateway really means. Edinburgh—and, indeed, other gateways—should be the beginning, not the end, of a journey in Scotland; we are surely a small enough nation to be able to co-operate to ensure that that is the case.
The scope for partnerships in Scotland is immense. I will give one example: the emerging partnership between Edinburgh and Glasgow. We often hear a lot about the tension between those two cities, but not about the partnership between them in, for example, conference business tourism. About 90 per cent of that market is shared between the two cities and the market's continued development depends on co-operation between them. There is immense potential to build on that. None of us should be sensitive about, or jealous of, the strengths or unique selling points of different parts of the county; rather we must ensure that we sell those different parts effectively.
I will end with an enthusiastic comment on my own experience of holidaying in Scotland in recent years so that I can play up the very positive story that we have to tell. Like many people, I made the shift in recent years to holidaying closer to home, not least—
Can you tell your story a wee bit more quickly, please?
Yes.
I made that change not least because, to be frank, it is less stressful than travelling abroad with young children. I am astonished by the quality and range of, for example, self-catering cottage accommodation that is available at an affordable price in Scotland and I am proud of the vast array of visitor attractions that one stumbles upon in almost every corner of the country. We have everything to play for. Parliament is already a major visitor attraction for Scotland; let us ensure that, as parliamentarians, we work to attract visitors to Scotland.
Susan Deacon was the nice cop from Lothian and Borders police; I am the nasty cop, because I am quite willing to say that Edinburgh is the main gateway into Scotland because at least 50 per cent of visitors to Scotland spend one night of their stays in Edinburgh. I am happy to see that Mr McCabe is sitting on the front bench because, as he knows, I would like Edinburgh to be acknowledged with capital city status, which would mean that the additional responsibility that the city bears—magnificently, I think—is recognised in the Executive's spending programme. I will say no more about that at the moment, but he knows what I am talking about and I will come to talk to him more about it.
Jamie McGrigor mentioned high-end tourism. I am not up with the jargon, but I think that "high end" means expensive and luxurious. I am all for that, because it means lots of folk with lots of money coming to spend it in Scotland. However, Chris Ballance, who agreed with Jamie McGrigor, talked about short breaks from the north of England. I ask members to correct me if I am wrong, but I am sure that the bulk of the folk who come to holiday in Scotland from the north of England are not the sort who go for luxurious, expensive accommodation; they are looking for a more modest holiday. I say that not to disparage in any way the people who come from the north of England, but rather because I wonder what the strategy is for development of tourism in Scotland. Alasdair Morgan got close to questioning that. Is it to focus on short stays, second or third breaks or the main, luxurious and expensive high-end holiday? I will wait to hear the minister's closing speech before I make up my mind.
I am sorry, but Margo Macdonald is in her last minute.
I have one local question. I have been contacted, as I am sure Susan Deacon and other members have, by bed-and-breakfast owners who complain not about the grand plan, but about their particular and personal access to the VisitScotland website. It costs one lady, whose letter I have in front of me, less to be on four or five other websites than it costs her per annum to be on the VisitScotland website. She knows from where she gets most of her business. I realise that that is a detail, but it is an important one. Who is responsible for ensuring that bed-and-breakfast owners, who are the backbone of the tourism industry in many areas of Scotland, are pulled into the planning process? I feel that they might not have been until now.
I used to be a member of the Enterprise and Culture Committee, and shall be again shortly, as I mentioned in an intervention. I was involved in the committee's discussion on tourism. I whole-heartedly endorse Mr Alex Neil's remarks. He said that the past is the past, and he is right to wish to draw a line under it. From my point of view, however, coming from a singular part of the Highlands and of Scotland, the past is a rich heritage that we can mine for the future. That is what I meant when I said in my intervention on Mr Neil that Scotland is like a diamond that has many facets.
Mr Neil was quite correct when he said that communication has not in the past been all that it could have been. The committee heard evidence to suggest that there had been some communication breakdown, and that some messages had been delivered clumsily. That is not to say that there was malice aforethought, but it is important that we brush up and improve our communications in the future.
The Minister for Tourism, Culture and Sport spoke about increases in funding and in occupancy figures. There is a favourable trend there, to which I will return in a minute. I think that it was Brian Adam who mentioned the challenge funding approach. There is some sense in that, and members would do well to pay heed to his words on the subject. Perhaps we want to get away from an accountant's type of approach, but I shall return to that, too. Brian Adam's comments about genealogical tourism were music to my ears.
Jamie McGrigor spoke about the loss of local expertise and knowledge and hinted at the role of tourist information centres. Chris Ballance spoke about the vital role of staff in the industry. My intervention during his speech was about high-quality reward for staff's endeavours and about their delivering high-quality work.
I suspect that the increasingly universal worldwide market, if I can put it that way, is becoming more and more thoughtful about the product that it wants in respect of both the low and high ends of the market. When people go on a holiday, whether it is a short break or a long break and wherever it is in the world or, indeed, in this country, they want to see something singular and different. Variety is, after all, the spice of life. It is important, while having one main route or motorway to delivering the tourism product, that we offer tourists different things in a variety of different destinations, from Dumfries and Galloway to the northern Highlands.
On TICs, I suspect that what really matters to tourists is the quality of information that they get. They are not particularly interested in the structures. I have never been persuaded by the argument about structures. If tourists go into a TIC in Bettyhill, in my constituency, or in Kirkcudbright, what counts is what they are told over that desk about what they might like to see. The committee and Parliament as a whole have been quite correct to move away from the structural approach to a debate about quality of delivery.
Here is a warning, however. I attended a tourism conference in Inverness not so long ago, at which we heard about the quality of the product that emergent former eastern bloc countries such as Slovenia can deliver. Such countries can underprice us and can overshoot us in terms of quality. People can now get short breaks of three or four days in Slovenia that will leave them slack jawed in amazement at the quality of the food and of the stay as a whole. We face a real challenge. The quality of the product that we present, at whatever level of the market, is crucial. It is all about the visitor experience. If we take our eye off that, we will lose our way.
I believe there is within the human spirit a quest to find something interesting and something different. The past is the past, as Alex Neil said, but it is of huge interest. We have spoken about genealogy, but there is also archaeological tourism. Let us think of the singular nature of Scotland's history, with all our kings, our battles, our castles, our villages and our communities: they are fascinating. All of us—not just Scots and patriots such as myself—feed off those things. Whenever people go abroad, they are fascinated by the things that they see—in wee countries or in big countries—that make that country different. There is great potential in archaeology and genealogy.
Chris Ballance was quite right to draw our attention to green tourism. As we go into a period of global warming—sadly, or however one looks at it—the fact is that tourism is all about what we can see and what we can look at. People visit my constituency to see the golden eagles that fly high not far from my house and to see the buzzards and all the wonderful animals. The arts also offer enormous potential. The Edinburgh festival brings many people to our capital city, as does our great Parliament building, which has been mentioned. If we can present a superb artistic product, that, too, will play its role.
What matters is the individual facets of Scotland's diamond. We need one main trunk route that deals with people most efficiently—they should not hear a tape-recorded message that gives them the wrong answer. We need to fire people out into different parts of Scotland. For goodness' sake—we must remember that the more we can take people beyond the capital city into other parts of Scotland, the more local economies will benefit. I support the committee's report.
I call Murdo Fraser, who has four minutes.
Thank you, Presiding Officer—I am a little taken aback by that.
In this short debate, many issues have been raised. I will address matters that relate to the report and the tourist board shake-up. Given the interest in the debate, it would be worth while for the Executive to schedule another debate on the tourism industry in the near future, because it is clear that many opinions need to be expressed and because tourism is our most important industry.
I approached the shake-up with some scepticism, because the area tourist boards in my region worked well. Perthshire Tourist Board, Angus and Dundee Tourist Board and Kingdom of Fife Tourist Board, which I dealt with, all seemed to perform and to serve their purpose. However, I appreciate that that was not the case throughout the country. The strength of the area tourist board system was membership involvement. The industry bought into the structure, which was responsive to industry requirements and involved some local decision making.
In deference to the committee's convener, I will not spend too long on criticisms of the process, but several important points require to be made that emerge from the committee report. The first is about the time that the process took. It was one of the longest pregnancies in history—the new hub structure seemed to have the gestation period of a woolly mammoth. The review was announced back in May 2002 and it was March 2004 before its outcome was made public. That period created uncertainty, which was unhelpful to the industry and to the staff of local tourist board organisations.
Concern was expressed about lack of consultation with staff, stakeholders and local authorities, which also have an important role. Paragraph 25 of the committee's report draws attention to that. The Minister for Tourism, Culture and Sport gave evidence to the committee and acknowledged that lessons had to be learned from that phase of the process about communication and the impact on staff morale.
Much concern was felt about funding, because the new structure will be funded differently from the previous system. It will rely on the industry buying packages from the new hub structure. The committee was unconvinced that much evidence showed that the industry would automatically do that. Much work remains to be done on that issue. The committee's interim report dealt with that.
There is no doubt that we have lost key people from the tourism network. The chief executives of tourist boards have moved on. I do not know whether they have gone to England, as Jamie McGrigor suggested, but the concern is that they have been lost from the tourism industry.
Does Murdo Fraser agree that the key people are those who are across the desks in the TICs, to whom I referred? Chief executives come and go, but surely the people who know the local ground are the key people, and they remain.
I will speak about tourist information centres if I have time. However, the chief executives—certainly those with whom I interfaced—had much experience and local knowledge. They were instrumental in ensuring that the staff who work in TICs are well trained and knowledgeable. Many of those staff are not Scottish. In my experience, many are from overseas and work here on temporary contracts, which places the key knowledge base in the organisation's management structure.
What needs to be done? We have the new structure, which the committee and stakeholders have welcomed. We need a viable financial model. We must ensure that the system works and that the industry buys into the new structure.
Tourist information centres are hugely important, because they are many visitors' major interface with VisitScotland and many visitors' first port of call. Of course people will use the internet and will book holidays by telephone, but the first port of call for many people when they arrive in a geographical locality will be the tourist information centre. Tourist information centres must be preserved—I would be nervous about any suggestion to remove a number of them.
We must ensure that the purchasing of goods and services is not centralised under the new structure. Local businesses in different parts of Scotland should still have the opportunity to benefit from the purchasing power of the organisation. We also want jobs to be relocated out of Edinburgh to the local hubs—indeed, that has already happened.
Tourism is our key industry and the debate is important, but we must reconsider the issues in the near future.
The debate is on the area tourist boards and I pay tribute to the Highlands of Scotland Tourist Board. That board has been led by David Noble, who always displayed friendliness to one and all and who has joined us this afternoon. I pay tribute to the tourist information centres throughout the Highlands and Islands, particularly in smaller places such as Strontian and Ballachulish, which are in my constituency, and also to those in larger places such as Inverness and Fort William. They all play a part. They greet and meet people and they can make a difference to people's enjoyment of Scotland as a destination.
Alasdair Morgan was right to say that the focus of the debate is on the committee's report and is narrow, but Alex Neil was correct to invite colleagues to speak to the wider industry. Alasdair Morgan quoted Peter Lederer, who has stated that the exercise, with all its costs, has not in itself led directly to extra visitor numbers. Despite that, it is clear that there is consensus among virtually all the members who have taken part in the debate that many good things are happening that all of us can welcome and support. I said "virtually all" because I listened attentively to Jamie McGrigor. When I was doing so, it suddenly became clear to me that the answer for me was definitely no when I saw the poster during the election campaign with the slogan:
"Are you thinking what we're thinking?"
The positive contributions to the debate are to be welcomed. Jamie Stone and other members echoed what Brian Adam said about the importance of genealogy. Dennis McLeod's work in promoting the Scottish diaspora is an untapped source with huge potential for visitors to Scotland.
Chris Ballance was right to spell out that tourism needs to be an all-year-round business for Scotland. If a business must be compressed into six, seven or eight months, trying to make a reasonable return on it is extremely difficult and prices will be pushed up. I am pleased that Chris Ballance recognises the corollary. Cheap flights, direct access and access for people from other countries are needed to bring people to Scotland. I am delighted that the Green party supports such air travel.
Did the member also hear that the internal Scottish tourism market and the internal English market—particularly the northern English market—are the core part of the market and that we ought to focus on those first and foremost?
We should invite everybody to come to our country, wherever they hail from. The Greens are trying to have things two ways, which is a grey approach to politics, if I may say so.
Members are correct to highlight the importance of conferences, not least in Aviemore, which is in my constituency. I hope that the minister, although the matter is not within her purview, recognises the consensus that exists among virtually all members that the Inverness airport private finance initiative should be bought out, as that would allow the moneys from revenue—which are currently £2 million a year—to be unleashed to bring more people to Scotland. All members—except perhaps one—would be pleased about that.
I hope that the minister will take on board the industry's comments on the problems that migrant workers face in learning English. After the pilot scheme is over, there is no opportunity to go on longer schemes, although the enterprise net is charged with that. There are problems in that respect. People cannot even open bank accounts. Small businesses in my area are taking on workers from many parts of the European Union, but they cannot get bank accounts for them. That is a serious practical constraint, and the banks need to engage directly to a greater extent with the Scottish Executive in that respect.
I conclude, as always, by saying that the SNP is absolutely committed to Scottish tourism business. We think that the Executive's target of increasing visitor numbers by 50 per cent by 2015—which is in eight years' time—is too modest and that we should aim for higher targets for an even better tourism industry for our nation.
We have had an important debate about Scotland's tourism industry and the restructuring of the support structure. I will deal with some of the points that have been raised in the debate. I apologise to members if I do not address the point that they raised, but I suspect that I will be a little bit short of time.
Both Brian Adam and Jamie Stone spoke about the challenge fund being too bureaucratic. The first round of the challenge fund was a pilot scheme, and many lessons have been learned from that. From now on, a team of locally based business relationship managers in area offices will be in place to work with businesses and to support good applications to the challenge fund. I was very impressed by the excellent work that has been done by some of the businesses that are already involved in the challenge fund, which I met earlier this week.
Will the minister give way on that point?
Very briefly.
I welcome any mechanism that will speed up the process. The point that I was trying to make is that there may well be some decisions that cannot wait for any kind of bureaucracy. I am not suggesting that we should not have the fund, but we should have a local alternative.
I accept the point that Mr Adam makes, but I point out to him that that is not the only way of attracting marketing moneys. There are other mechanisms that can be used. If the member writes to me with a specific problem, I can try to help him to address it.
Like Fergus Ewing and other members, I do not recognise the argument that Jamie McGrigor put forward. It is important to remember that the approach that we have taken to restructuring has taken account of international expertise. In fact, a recent report that was commissioned by Fáilte Ireland, to which Richard Baker alluded, prepares the way for an integrated structure that is similar to ours to be put in place there.
Will the minister give way?
I am sorry, but I do not have time.
To Mr McGrigor, I say that I accept entirely—as other members have said—that there have been difficulties with visitscotland.com. Nevertheless, it has generated £27.7 million of business so far, and many of the early problems have been ironed out. The site will continue to be monitored so that any residual problems can be addressed.
I was surprised by some of Chris Ballance's comments about green tourism. VisitScotland works closely with the tourism environment forum to promote the green tourism business scheme. That is Europe's largest green tourism accreditation scheme, and the aim is to raise the environmental performances not just of green tourism businesses, but of all tourism businesses. VisitScotland aims to increase the membership of the scheme by a third each year for the next three years.
Alasdair Morgan was right to mention the importance of business tourism. As well as being very lucrative, business tourism has a spin-off as far as the business incentive element of it is concerned. In that context, Susan Deacon was entirely right to mention the fact that Edinburgh is a gateway to the rest of Scotland, although there are other important gateways.
Will the minister give way on that point?
I am sorry, but I am really tight for time.
Susan Deacon made the point that there are no women in the cadre of directors at VisitScotland. However, six of the 12 area directors who have been appointed so far are women, and six of the 17 heads of department are women. I am hopeful that we will see those women progress. I would add that the minister with responsibility for tourism is definitely a woman.
Margo MacDonald asked what our strategy for tourism was—whether it was for short breaks, budget breaks or luxury holidays. The member is no longer in the chamber, but I say to her that Scotland has a range of attractive offerings and VisitScotland has segmented its marketing strategy to appeal to a range of visitors. VisitScotland's current city activity campaign emphasises the role of cities as gateways and encourages city break visitors to enjoy rural areas through the easy accessibility to the countryside from our cities.
I just have time to address Fergus Ewing's point about year-round businesses. That is where EventScotland comes in. It is important to attract such events as the mountain bike championships that will take place in Fergus Ewing's area; it is also important to have local festivals and use them to market Scotland. In response to one of Jamie McGrigor's earlier points, I point out that that is the cross-cutting element of my portfolio, which is very important. We cannot take the cultural and sporting aspects out of tourism in this country. They contribute hugely to the tourism businesses that we have.
Everyone in Scotland has a part to play in making our guests welcome: every restaurant and hotel worker, every shop assistant, every cab driver and, indeed, every MSP. Our visitors think that this is a great country to visit and they value the contact with local people. Tourism is everyone's business and we all have a part to play in its success.
In rising to close for the committee, I remind everyone that, as Susan Deacon said in committee, the reorganisation of the ATBs was about process and we have to ensure that that process has positive outcomes. To that end, I echo Alex Neil's comments about the value of tourism to Scotland, and about the numbers of people who are employed in the industry. To break that down to my area of Fife, for the last year for which figures are available, almost £206 million-worth of income was derived from tourism, and almost 6,000 people were employed in tourism. That is a significant element of Fife's economy, and a significant contribution to the economy of Scotland.
Susan Deacon referred to the importance of the cities and said that they are the gateways to and the beginning of the tourism experience, not the end. That is important. As the gateway strategy is developed, I hope that the minister will give us regular updates. That will be important not just for the gateways, but for the areas of Scotland that serve as the hinterlands for those gateways.
There were problems; they have been aired and I will not go through them again in the short time that is available to me. However, the committee will want to keep an eye on the situation and get reports on communication, staffing issues, and how the costs, if they are to be additional to what has been identified, will be met.
The whole chamber would agree that communication is important. Does the member agree that it is totally unsatisfactory to give the tourism industry only one month to respond to the Executive's current consultation on the draft Private Water Supplies (Scotland) Regulations? Does she also agree that it is necessary to extend that timescale, given the importance of those regulations to many parts of rural Scotland?
There has been extensive consultation throughout the country on water, water supply and related issues. If there is a problem for businesses, I am sure that the Executive will be as generous as always in extending the timeframe.
In a well-argued speech, Brian Adam made an important point about the future of archives and their importance to ancestral tourism. If the archives come under another part of the minister's portfolio, I hope that she will ensure that they are available, as far as possible, for public consumption and reference. That is very important.
Everyone has referred to Mr McGrigor's speech and, on that basis at least, his contribution was successful. However, I recommend that Mr McGrigor go back to his local authorities and local enterprise companies and talk to them about what has been done. Others have referred to the arrangements that are now in place and to the success of those arrangements in their local areas. I cannot believe that the situation is different in Mr McGrigor's area and I hope that he will find that it is not.
A couple of other important aspects that I must mention briefly are, as I said, tourism connected with genealogy—now called ancestral tourism—and, as Susan Deacon and others mentioned, business tourism. Indeed, business tourism contributed £900 million to the Scottish economy last year. I am gratified to see from a recent Royal Society of Chemistry briefing that Glasgow will host a convention for thousands of chemists later this year. That is not only because of Glasgow's superb convention and hotel facilities, but because the city's universities and academic institutions have a reputation for cutting-edge chemistry that is beyond compare. That shows that it is important that tourism remains firmly within the Enterprise, Transport and Lifelong Learning Department. Tourism is a key part of the Scottish economy.
Whenever we open our mouths, especially if we hold an elected position or other position of influence in which our words are reported, it is important that we think about what we say. I read with real concern the comments of someone in St Andrews who said that the town was too small to host the open championship, which is potentially worth £70 million to the local economy. It was claimed that St Andrews could not host the open, but the town has done so successfully for years and will do so successfully this year. I also read about the refusal to grant an honour to Jack Nicklaus, but we need not say any more about that.
Blame the Liberals.
I do not know who to blame other than those narrow-minded people who do not have the interests of Scotland at heart.
However, let us flag up the positive things that are being done, such as the way in which a guesthouse owner in Burntisland has lauded broadband for the benefits that it has brought to her business.
Picking up on Murdo Fraser's gestation theme, I believe that, if the area tourist boards review, which the member described as a long pregnancy, results in our producing from the previous Cinderella that was our tourism industry a glittering princess that plays its part in the economy, the process will have been worth while.
I thank members for their contributions and for their largely supportive comments. Does Scotland do tourism well? Yes. Could we do it very much better? Absolutely. Increasing the industry by 50 per cent will be challenging, but it may be too little of a challenge. However, I challenge the industry and all members present to better that so that we can ensure that tourism really makes a contribution.
It was somewhat sad to see that tourism, which had for many years exceeded all other sectors in its levels of growth, was knocked into second place this year by the financial services industry. I was glad to see growth in financial services, but I would like the growth in the two sectors to be on a level pegging because both sectors are important to the Scottish economy and supportive of one another.
I thank members for supporting the committee's report and I thank my committee colleagues and all who gave evidence to us. I support the motion.