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Five reasons to be cheerful about Scottish tourism

Expectations are high for the Scottish tourism industry this year. New research suggests our hospitality and leisure sector can look forward to a bumper year.

Two-fifths of Scots to say they would now choose a staycation over an international holiday, according to a report from Barclays Corporate Banking.

And Scotland is also popular with international tourists , coming second only to London as a potential UK break destination.

There are a number of reasons for this, including the weaker pound.

Golf tourism is ace in the hole for Scottish tourism, Visit Scotland and Scottish Enterprise study reveals

It’s been a nail-biting few months for many businesses involved in the tourism industry.

The impact of Brexit was immediately felt when the pound plunged following the UK electorate’s decision to leave last summer.

For most overseas tourists it was a huge boost as they got more bangs for their bucks though many would have already paid the majority of their holiday costs.

1: Heritage holidays

The full statistics will not be available until later in the year but there are positive signs about the 2016 season with Historic Scotland reporting a huge 13 per cent jump in visitor numbers to 1.7m at the already busy Edinburgh Castle.

Just down the road the Scotch Whisky Experience had its busiest year ever with a nine per cent increase in visitors to 326,000

Much of that increase was probably due to the growing number of cruise ships visiting Scotland and that wasn’t just Edinburgh and Glasgow. Up in Orkney the numbers visiting Skara Brae shot by eight per cent to 138,711.

This year cruise ship numbers are expected to be up again.

Stephen Duncan, director of commercial and tourism, Historic Environment Scotland said this year is shaping up to be one for the history books for his organisation and the country’s heritage tourism sector.

“In the past weeks alone we’ve reported that footfall at our staffed visitor attractions hit four million for the very first time – the greatest ever number of visitors to our sites in a single financial year.”

2017 is being promoted as the Year of History, Heritage and Archaeology which Duncan says will create new and positive opportunities for Scotland’s heritage and tourism sector.

2: Hotel bookings

Forward bookings are looking good for 2017 for many Scottish accommodation providers but they also face a massive jump in food costs as a result of the weakness in sterling.

To add to the pressure many hotels were facing the prospects of stratospheric jumps in their business rates until Scottish Government finance secretary Derek Mackay bowed to pressure from heavy lobbying by industry groups particularly the Scottish Tourism Alliance, the British Hospitality Association (BHA) and the Scottish Licensed Trade Association (SLTA) and capped the increase to 12.5 per cent.

Stephen Leckie, who is chairman of the Scottish Tourism Alliance, said forward bookings for his hotels for this year were looking good.

Leckie’s company owns the Crieff Hydro, the Peebles Hydro and the Park Hotel in the Borders and the Isles of Glencoe and Ballachulish hotels on the west coast. It also manages the Oban Caledonian Hotel and the Yorkshire Hotel in Harrogate.

He said the Crieff Hydro, and to a smaller extent the Peebles Hydro, had been hit by a drop in conference bookings by the North Sea oil and gas industry because of its continuing slump.

Leckie said that the benefits of the weakness in the pound which encouraged more overseas visitors to come was counterbalanced by the rising costs in food and drink supplies. In addition the new living wage had increased his costs by £400,000.

In order to reduce costs he had been forced to introduce a voluntary redundancy programme at the Crieff Hydro.

“It is extremely regrettable but necessary in these challenging times,” he said.

Leckie said he hoped that sterling would start to recover this year.

He added that Brexit had also created nervousness for his continental European employees who were not sure what would happen in the future.

“This needs to be urgently addressed by the Government,” he said.

Despite all the issues he was facing Leckie said he was confident about the future of the Scottish tourism industry.

“We have a strong product and a fantastic location,” he said.

Malcolm Roughead, chief executive of the Government backed agency VisitScotland was clear that he believed there should be a clear message to EU nationals.

“We need to make sure that EU nationals who work and live here are given reassurances as they are crucial for the tourism industry in Scotland,” he said.

Roughead said anecdotal feedback from around Scotland suggested that forward bookings were looking very positive for 2017, with some businesses reporting being booked out until the end of September and others particularly pleased with the number of bookings received from Europe and the United States.

“However, we can’t be complacent and if we are to hit the 2020 target set by the tourism industry to grow tourism by £1bn by 2020, we all must keep promoting Scotland,” he said.

He also said it was still too early to know the full impact of Brexit.

“We will continue to work closely with our partners and stakeholders, ensuring visitors from around the world continue to come to Scotland to enjoy its spectacular landscapes, its rich heritage and, of course, the warm welcome of its people,” he said.

The STA conducted a piece of research with the tourism industry following the EU Referendum last year and at that time found that 58 per cent of the 397 businesses surveyed said that forward bookings remained the same and 30 per cent were feeling somewhat confident about the 12 months ahead.

STA chief executive Marc Crothall said 44 per cent of businesses expected their costs to increase and 15 per cent were planning to put investment on hold.

“Uncertainty was the key word that emerged from our research and this very much continues to be the mood within the industry,” he said.

“Yes, the industry has enjoyed some short-term benefits immediately post-EU Referendum but the long-term outcome and impact on the industry is still to be seen and felt.”

Craig Ewan, who has been manager of the Kingsmills Hotel in Inverness for the past 12 years, said that whilst 2017 has started tougher than last year, the forward bookings are very strong and predicted his hotel was in for another bumper year.

“Last year was Kingsmills Hotel’s strongest trading year yet, operating at 87 per cent occupancy and sales of just over £8m. I do believe that this year has the potential to go further.

“I was trying to help a group of golfers secure accommodation just last week for June and we were struggling with business on the books of 92 per cent already.

“This suggests a month that will very nearly sell out every night, as will July, August and September.”

Ewan said that had a positive effect on sales with more European and US leisure business especially over its shoulder months of November, December, January and February.

“However since the turn of the year we have seen increased costs in buying supplies from Europe. This has not been limited to food and beverage.

“We have seen price increases in consumables and all departments.

“At Kingsmills we have a policy of buying local where we can support the local community and receive the best quality.

“An example of this has been buying our steaks from a local supplier.

“However due to his increases in animal feed and other costs, it has seen our steaks increase at cost price by an additional £4 per kg in the last couple of months.

“The element of Brexit where our industry needs to pull together on and be more prepared for is the prospect of having working visa requirements implemented on all non-UK workers.

“This has very serious implications for staffing the Highlands’ biggest industry.”

3: Investment

One of the keys to Scotland’s future success is investment in its product and the former George Hotel in Edinburgh has gone through a multi million pound refurbishment programme.

Andreas M. Maszczyk, who is the general manager of the newly re-launched Principal Edinburgh Hotel on George Street (formerly the George Hotel), said: “The calendar for 2017 is already looking healthy for Principal Edinburgh with many guests keen to check out our newly refurbished hotel.

“Easter is already filling up and we have so much repeat custom from our international travellers who book out several rooms every year for the Edinburgh Festival.”

Radisson Blu Edinburgh has benefited from a £12m investment over the past 12-18 months with all 238 bedrooms being installed with new digital technology.

Lateral City Apartments operate luxury serviced apartment accommodation within Edinburgh.

Part of the Chris Stewart Group, the business is currently in two locations: Old Town Chambers and Merchiston Residence and is also opening more accommodation in RBS’s St Andrews Square development this autumn.

Gavin MacLennan who is general manager of Lateral City Apartments said it had aggressive expansion plans, with The Edinburgh Grand opening in Edinburgh in 2017 and several other serviced apartment properties opening between 2018 and 2020.

“The serviced apartment business is catching on in Scotland and with our top end luxury approach which easily competes within the five star hotel bracket, we know the flexibility brought by our product offering is one that appeals to leisure and business visitors,” he said.

Macdonald Hotels, which is the biggest independent hotel operator in Scotland with 17 hotels and resorts, said the outlook for 2017 was positive.

“Current business in terms of corporate, wedding and private bookings is currently 8.5 per cent ahead of this time last year,” it told Insider.

“We’re already seeing increases in short breaks and impulsive getaways, which are often not seen until much later in the year.

“The March to October season is a thing of the past and offering great rooms and service year-round is now essential for Scottish tourism, particularly for those operating in the hotel business.”

4: Holiday parks

One part of the tourist sector in Scotland, which perhaps don’t get as much publicity as others, are holiday parks.

The British Holiday & Home Parks Association has 209 member parks in Scotland with 2,465 staff.

Brian Wetherley, who owns parks near Jedburgh, Dumfries, Hawick, and Annan, says business has been really good since 23 June 2016.

“It was also good prior to the Brexit vote but did slow down for three months before voting,” he said.

Wetherley says its main concerns are low planning outcomes with no two geographic/council areas playing by the same rules.

He added that regulation and costs were also a major issue.

“What are we doing about it? Monitoring costs, keeping staff levels down and therefore without a comfort zone which hopefully doesn’t impact on the customer experience.

“Quite frankly as a family business we ourselves are doing more, working longer and hard to continue moving forward.”

John Kirkcaldy, owner of Cairnsmill Caravan Park, St Andrews says that Brexit isn’t really having much effect at present though the lack of advance European bookings compared to the norm at this time of year may well be linked to the Brexit situation.

“Forward bookings are up overall, but there are little or no Dutch, German or Italian bookings which is not the norm for this time - usually there are a lot of forward bookings from these markets, but none up till now.”

Kevin Lodge, director of Abbeyford Leisure, which owns three parks in Fife and three in North Wales, says Brexit is a major concern.

“There isn’t much we can do but to assure our European workers that we will be fully supportive to them and we will do all that we can to keep them employed within our business post-Brexit.”

5: VisitScotland's global campaign

VisitScotland is busily campaigning to encourage more visitors to come here.

“Our global campaign, the Spirit of Scotland, showcases the country’s personality, place and people to the world and invites international audiences to sample it themselves,” said Roughead.

“Our core markets for marketing activity are the priority markets of the UK, USA, France and Germany.”

He said VisitScotland was also playing a major role with Team Scotland partners in bringing new airlines here through innovative marketing partnerships on key routes.

“Over the past year, we have worked with 22 airlines, which has resulted in a further 12 routes being launched,” he said.

“Together, those air links mean that an additional 170,000 seats have been created on flights into Scotland.”

VisitScotland’s new chairman Lord John Thurso said his organisation and the industry needed to prioritise what brought the best return on investment.

“We need a better focus on what VisitScotland can take on and what the industry needs to do.

“We need to work together to support great product innovation across Scotland – i.e. North Coast 500, Borders Railway or Dark Skies

“If we build it they will come! We need to get investment into new hotels, high quality accommodation and visitor experiences in areas where visitors want to visit.

“We need to leverage Scotland’s reputation on the world stage to bring new investment, events, and visitors to the country

“Scottish tourism is vast and resilient but needs to innovate and embrace the digital age if it wants to compete in a competitive global market.”

Source: The Insider

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