Back in May 2001, as Business Editor of the Sunday Herald, I had the pleasure of interviewing Peter Lederer about chairing VisitScotland, then an organisation playing its part in rebuilding our tourism profile after the devastation of the foot-and-mouth epidemic.
He told me then that his wife, Marilyn, was concerned about him taking on such a high-profile public job. “My wife warned me not to do it, against my better judgement. She knows how all-consuming life becomes in this business and she is great at keeping my feet on the ground. We’re a close-knit family and she could see how much time it would take.”
It has been an all-consuming career. Lederer took over at Gleneagles in 1984 when the once great railway hotel in Perthshire was in decline and requiring a massive upgrade in both fabric and customer service. “When I took over at Gleneagles it was living on a past reputation, you don’t change that overnight. You have to change the culture and build the respect again. It’s the same with tourism in Scotland,” he said in 2001. Lederer has achieved a great deal, turning the hotel into an industry leading destination. He then became chairman of both the Tourism Skills Group and Hospitality Industry Trust in Scotland battling to improve our levels of service. It has been his life-long crusade.
When the then First Minister of Enterprise Wendy Alexander asked Peter to step in as VisitScotland’s chair, he was reticent. We should all be grateful that he decided to take on the task. Since then he has helped polish VisitScotland’s reputation too, turning it into a well-run and focused organisation that has done an admirable job at selling Scotland overseas – and encouraging higher standards at home.
Indeed, Mike Cantlay, the current chairman, worked closely with Lederer to make the transition, which then saw Malcolm Roughead become the chief executive. Lederer, who became chairman of Gleneagles Hotel in 2007 and has done much as a tourism ambassador for Scotland, recently announced his retirement as Scottish director of global drinks giant Diageo, makers of Johnnie Walker, Smirnoff and Gordon’s Gin.
While he remains a board member of Baxter’s Food Group, Scotch Whisky Experience in Edinburgh and the Edinburgh Military Tattoo, he stepped down from his Gleneagles position from January 2015. Now his ‘day job’ is helping in the turnaround of four, three-star hospitality businesses based in Scotland.
“This is the next chapter in my particular book,” he reveals. In the next chapter, he is involved with three emerging businesses and a turnaround project. He chairs Applecrate, based in Fife, who make ecological cedar standalone suites giving hotels – and homes - extra room, particularly in the luxury market for cabins and lodges.
“These are very eco-friendly to a very high standard, with under floor heating, wood burning stoves, and the like. The beauty for a hotel is they can add on rooms without planning difficulty and it is half the cost of adding to an existing building. It’s a double-win because the customer sees it as a premium product.”
He is also chair of Taste Communications, the food and drink public relations agency, founded by television presenter Stephen Jardine, is the chairman of Hamilton & Inches, Edinburgh’s prestigious jeweller firm, and is non-executive director of Pod Global Solutions, which builds flexible retail, food and beverage units. He remains passionate about Scotland’s tourism industry.
Speaking recently at a BQ Scotland event on the Royal Yacht Britannia, he shared his thoughts: “There are some strategic issues that we all need to think about that are coming down the track. The Living Wage is going to be an enormous issue for this industry. The tourism sector has struggled with the Minimum Wage and the political movement towards the Living Wage is happening, and this will have an impact on our industry.
Technology is another area. I think the hotel business will be more impacted by Airbnb than anything else it has seen in the last 50 years. It already is. A colleague went to New York recently and stayed in a beautiful apartment for five days for the price of a pretty mediocre hotel in New York. And why wouldn’t you? And there are other online developments that are impacting already and it is pretty scary about how it will affect our industry.”
Certainly the three American founders of Airbnb – Brian Chesky, 33, Nathan Blecharczyk, 31 and Joe Gebbia, 33 – have disrupted the global tourism market. Over ten million people in 2014 were willing to hand the keys of their homes over to complete strangers to rent out holiday space in their house. The website has over 80,000 listings, which means it has more options than the Hilton Hotel group or Intercontinental Hotels, or indeed any other hotel chain in the world.
In just seven years, this start-up has shaken the tourism industry and upset regulators and the tax industry. Lederer is right when he sees Airbnb as a disrupter, revolutionising the travel experience for the social media generation, displacing the established players and generating billions in revenue for the company and their hosts.
While the tourism industry talks about creating authentic experiences, Airbnb’s founder Brian Chesky says his business is about more than a bed for the night. “Airbnb is about so much more than just renting space. It’s about people and experiences. At the end of the day, what we’re trying to do is bring the world together. You’re not getting a room, you’re getting a sense of belonging,” he said in a recent interview with Inc. magazine.
It is a very radical departure for the industry, although cities are fighting back, with Barcelona fining the company for the breach of tourism laws, while New Orleans, San Francisco and Malibu have all investigated the business for violating leasing terms. Last October, New York State’s attorney general found that 72% of Airbnb’s New York listings violate hotel and housing laws. Nevertheless, this company is a serious player and there will be others who will see this as an opportunity.
Lederer also talks about the environment and how Scotland has to work to maintain its beautiful scenery, caring more for the pristine landscapes that enthral visitors. Back in 2001, before the proliferation of onshore wind farms, he said: “You drive along the M8, which for many people is the arrival point from the airport, and what do you see? There are cans and bottles and rubbish bags in the trees. This really isn’t acceptable any longer when you are trying to market then country as a pristine place to come and visit.”
That point still remains relevant, although the plastic bags tax is helping, but too many lazy Scots still tip their refuge out of their car, without considering the importance of the action. He also expressed concern about the ‘public sector dependency’ and the expectation ‘it was going to sort everything out’.
“I don’t think we should over-estimate what the public sector can and will do. When you look back over the last 20-30 years, have they really made the difference? The differences have been made, I think, when the private sector comes together and really decides it is going to do something. The public sector then has a role to play in supporting that, not the other way around.”
“One of the things we learned around the G8 summit in Gleneagles was that the event generated a belief in Scotland in the wider business tourism market that Scotland can run pretty serious events. We got a lot of business out of that. When you can run something as complex as a major political summit, you can run a corporate event. Scotland benefited and it put us in a different league,” he said.
He said the Commonwealth Games, Ryder Cup and the Scottish referendum have all done a similar amount for Scotland in terms of reputation. “The perception of what was happening in Scotland was very positive: a mature country having this kind of debate and process. It was handled very well.”
One of his other frustrations about Scotland is that it doesn’t sell itself well enough on the global stage. “We don’t do selling. WE DO NOT SELL,” he repeats. “Not just this industry, but the country. In 25 years running Gleneagles I can count on one hand the number of people who came to me and said, ‘what do I need to do to get your business?’ If we don’t sell, nothing happens. Nothing happens in business unless we sell. It’s not VisitScotland, or Scottish Enterprise or some other body’s job to sell it for us, we’ve got to sell.”
What would he like to see repeated? His clarion call remains about raising standards
to the highest level. “One thing that Steven Leckie, [of Creiff Hydro] and Peter Taylor [of the Townhouse Collection] and others remember was Scottish Enterprise’s masterclass series on tourism. We’ve come a long way since those masterclass days, but we still need to disseminate the message about quality and skills. We had some very good speakers from around the world and a lot of people benefited from this and took it back to their businesses. There are a lot of new subjects that could be tackled for the next few years.”
He says if the whole industry was working together with Scottish Enterprise, to learn and disseminate that would be worthwhile.”
“I feel there is something around a new series of master classes and making them freely available to people across the industry. It doesn’t need to be physical – it can all be online too.”
Looking at the Edinburgh Festival and the Fringe, which enjoyed international stature as the world’s biggest festival, he said others were looking enviously at the festivals and plotting how to take this crown from Scotland.
“We can’t be complacent about the festivals in Edinburgh. We have to appreciate that other cities and locations want something like this – and are prepared to go for it. It’s the same with all of our events strategies. When we created EventScotland it was on the back of Sydney and we got an Australian to come across and run it. We need to keep on the front foot.”
Speaking of improving skills, one of Lederer’s many achievements has been his involvement with the International Leadership School, at Strathclyde University Business School. This is executive postgraduate education in hospitality and tourism leadership involving Cornell University School of Hotel Administration and the Ecole Hoteliere de Lausanne, founded in 1893 and one of the oldest hospitality schools in the world. Over two years, the participants take 12 modules, six in Glasgow, and three each in New York at Cornell and in Switzerland. This is already attracting industry leaders in Scotland.
Peter Lederer is not going away though. He will still be on the scene, speaking out about Scotland. Looking back on our 2001 interview, he spoke about the role Scots can play themselves.
“I think the Scots have to be more demanding of their own country in hotels, bars, cafes and caravan parks. It is amazing that you can go around the world and find people who are proud to be Scots but not proud of Scotland. Why don’t we complain when we get awful service? Complaint is seen as something negative. I worked for 12 years in North America and it can be done constructively rather than a demolition job or a fight.” He says it should not be confrontational but a polite request.
To be fair, Scotland has come a long, long way since then. Standards have improved massively and increasingly we all understand what tourism means to our economy. Nevertheless, Peter Lederer is spot-on, if you’re unhappy with service, then be polite and raise the issue. After all, it’s in everyone’s interest.