Industry Update: Tourist Destination Management in Scotland set to suffer following the removal of funding – SkyeConnect National DMO Survey

Without urgent action, almost half of Scotland’s Destination Management Organisations may cease operations in the coming months. That is one of the key findings of a national study initiated by SkyeConnect and conducted by the DMO’s former Executive Chair, Gary Curley, through his 360 Vision Management Consultancy.

Carried out in April 2024 and published on 21st October, following advanced briefings for key stakeholders across the industry, the Scottish DMO survey received responses from 22 DMOs, representing the majority of known DMOs in Scotland covering the country’s towns, cities, remote rural and island areas, coastal resorts, and National Parks. The DMOs that responded are responsible for overseeing destination management for approximately 36 million visitors per annum.

Assisted by a focus group of DMO representatives and the Scottish Tourism Alliance, the research highlights the urgent need for government intervention to support Scotland’s DMOs, which play a critical role in driving sustainable tourism development across the country.

The cuts to DMO core funding come at a critical time when visitor numbers are rising. Four million international visitors came to Scotland in 2023 – an increase of 41% compared to 2019. In Scotland’s second most popular destination, Skye, visitor numbers have increased by almost a third since 2019 to 857,000. Despite the growth in visitor numbers, funding cuts mean that 42% of DMOs may cease operating within 12 months (from the date of the survey). The effects of the cuts appear to be even more severe in remote, rural and island areas with 67% of DMOs set to fail in these areas versus 22% in urban/rural mix areas.

The DMO ecosystem in Scotland is diverse and complex, with urban DMOs focused on marketing being more resilient to public sector cuts than remote and island DMOs, where the emphasis is often on destination management due to the local impacts of tourism. The research findings advise that the Scottish Government heed calls from across the industry to conduct an urgent nationwide review. In England, the De Bois review sought to address similar concerns about the structure, funding, and fragmentation of DMOs. This resulted in the UK government committing to streamlining and restructuring the DMO landscape, with core funding being piloted in select regions, and VisitEngland receiving additional funding to develop and administer the scheme.

The then Minister for Sport, Tourism, Heritage, and Civil Society, Nigel Huddlestone MP, described DMOs as:

“Crucial components of the visitor economy. No other type of organisation – whether in the private or public sector – is as well placed to bind together the constituent parts that make a place an attractive and enjoyable place to visit, whether that be for business or leisure.”

The Scottish DMO survey makes several recommendations, including immediate emergency funding for the most vulnerable DMOs to prevent imminent cessation of operations, a strategic review of the DMO landscape, and enhanced collaboration between DMOs, local governments, and private sector stakeholders to create synergies and shared funding opportunities.

The report’s author, Gary Curley of 360 Vision Management, says the loss of DMOs will have a huge impact on the tourism sector and the Scottish Government’s ability to deliver its strategic priorities:

“In Scotland, many DMOs are facing an existential crisis, and without immediate intervention, we risk losing vital organisations that often act as the glue connecting diverse stakeholders across the tourism sector. Scotland boasts one of the most incredible tourism offerings in the world, but we need to continuously preserve, protect, and enhance it. Tourism businesses and vulnerable destinations are grappling with high visitor numbers and inefficient infrastructure and will be left to fend for themselves without a comprehensive nationwide plan. A network of high-performing DMOs could not only enhance visitor experiences but also align with national, regional, and local strategic priorities to make our tourism sector more sustainable and resilient. The loss of DMOs would significantly undermine our ability to deliver on key initiatives, with the study suggesting a 46% reduction in activities relevant to national agenda priorities, a 64% drop in activity related to the net-zero and sustainable tourism agenda, and a 63% decrease in tourism impact management. The Scottish Government needs to act decisively to support our DMOs and help safeguard local communities and our tourism sector’s future.”

The study has received academic endorsement from Kenneth Wardrop, Senior Research Fellow, Edinburgh Napier University Business School, who said:

“The Scottish DMO report represents a timely, well-evidenced and insightful summary of the challenges facing Scottish DMOs. Simultaneously, the report robustly sets out the real added value and potential benefits that could accrue for Scotland from a well-funded network of professionally staffed, locally based destination development, management and marketing organisations. The analysis and recommendations reflect best practice in international policy and current academic theory. A well-funded and consistent network of professional DMOs will ensure enhanced quality across the visitor journey experience. I endorse the recommendations for immediate financial support, an independent strategic review, capacity building, collaboration, and diversification strategies. A strong sub-regional and financially stable network of DMOs offers the opportunity for Scotland to define global tourism best practice and deliver real competitive advantage and sustainable development.”

The Chief Executive of the Scottish Tourism Alliance, Marc Crothall MBE is a strong supporter of the DMO network and has backed the report’s findings and recommendations:

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

“New figures show that in the first six months of 2024 there has been a 46% rise in international visitors to Scotland, compared to the same period in 2019. More than ever, we need our DMOs to be at the heart of ensuring tourism happens in a sustainable way.”

“DMOs are integral to the overall success of a destination – whether people visit in the first place, their expectations during their visit are met or exceeded, and if they decide to return and encourage others to visit. Many parts of Scotland also remain untapped.”

“The survey led by SkyeConnect brings to the surface that several DMOs are operating with few people and limited funding, and unfortunately this isn’t sustainable going forward. The loss of our DMOs would leave a devastating gaping hole in our tourism ecosystem, significantly harming Scotland’s ability to drive its strategic and economic agendas, including the ambitions of our national tourism strategy, Scotland Outlook 2030.”

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