The issue: How can we take advantage of the legacy created from recent key events in Scotland such as the Year of Homecoming, Glasgow 2014 and the Ryder Cup, and what do we need to do to further support the sector?
When the American golfers were driven in their luxury coaches up the M9 with their police escort towards Gleneagles, the motorway gantry signs flashed a change: ‘Ryder Cup 2014: Scotland Welcomes the American Team’.
Once the team had passed, the sign reverted back to more mundane traffic information. But, for Mike Cantlay, the chairman of Visit Scotland, this was a great example of how joined-up Scotland is embracing the importance of tourism to our country.
“How dinky was that? If we can do that, we can do anything,” he said at the introduction of the BQ Live Debate on the Royal Yacht Britannia. The event, chaired by Caroline Theobald, was looking at how the legacy of 2014 can be extended towards 2020 and what further work was required. It was also noted that the MTV Awards, with 500 million viewers around the globe, were being hosted in Glasgow later that week.
Mike Cantlay: “The whole game here is growth – and sustained growth. Tourism follows the economic cycles. For Scotland, it is about building on the momentum of 2014. We’ve had these great events of the Winning Years. It’s great to look around the room and see businesses who were part of this success – so congratulations on that.”
The value of Scotland’s tourism was calculated at around £11bn in 2014 and is expected to more than double to £23.1bn by 2025, representing 11.5% of our national GDP. Another report suggested that revenue from tourism between 2014 and 2017 will grow by 28%.
“In the period between 2012 and 2014, tourism in Scotland created 29,700 jobs. Our tourism industry is off and running. The question is: what do we do now?” he said. He said that it was unlikely there would be three themes integrating so well for Scotland again: The Year of Homecoming, with 970 events, the Commonwealth Games, and the Ryder Cup. “It was very special.”
However, in 2015, the Year of Food and Drink is ready to be exploited and is a ‘perfect theme’, focusing on an international consumer market. “We should be able to use that theme to go out and sell around the world,” he said.
Scotland now has a proven track record in delivering major international events, and this includes the likes of T in The Park, proving Scotland had the capability of organising brilliant events that were safe and well-organised. But, in such a global industry, Scotland could not afford to be complacent.
“If there was one thing that people omit about 2014’s success: it is the Scottish people. It only worked because Scots got into it. This is really back to Peter Lederer’s mantra: ‘Tourism is Everyone’s Business’. Millions of extra tickets for events were bought by Scots. Scots played a great welcoming role for our guests.”
Graham Silcock, in welcoming as the sponsor, said it was a pleasure to host the event. “We have a fantastic tourism, hospitality and leisure industry in Scotland and a vital cog in our economy, with £11bn a year of economic activity and nearly 9% of employment. 2014 has clearly been a momentous year for Scotland. We have been in the global spotlight for a wider variety of different reasons. We have every reason as a country to be proud of how we’ve been perceived in terms of infrastructure, organisation, security of major events but also the overwhelming sense of professionalism in the welcome that was displayed. Over the last couple of years at Santander we have been delighted to show our commitment to the sector, at a time when perhaps others have been pulling back. We’re proud of what we have done. We want to do more in terms of funding, where we are committed to supporting the leisure tourism and hospitality in Scotland … I believe we can look to 2015 with great confidence and I’m looking forward to hearing how we keep the momentum going.”
David Cochrane: “We’ve been talking about the ‘Winning Years’ for many years – and 2014 has been a winning year. But I’d like to think that winning is in the plural. It is not just the end of it. Scotland has been showcased internationally and also at home, it has brought different parts of Scotland to life with different audiences. This is good for future business. However, while it has been very successful, there has been huge complacency in Scotland. We have been reliant on some of the success created by public sector money and I wonder what our industry might be like if it didn’t have these global events coming to its doors. Yes, there’s been huge success but also room for improvement in some quarters.”
Henk Berits echoed the view that it has been a phenomenal year for Scotland. “There is no doubt about it. I believe that the themed years since 2009 [Year of Homecoming] has really helped collaboration and raised the profile of Scotland. We all know that next is the Year of Food and Drink and this is a huge opportunity for Scotland on the back of what has happened this year. The National Trust for Scotland has places such as Bannockburn, with a £10m project and its cutting edge digital technology. This is helping visitors enjoy and interpret history.
“I was impressed with the difference between 2009 Year of Homecoming events and 2014. The Ryder Cup was different and in a league of its own. However the quality of everything we did, with events taking place up and down the country, was immense and involved working with partners and organisations we have never worked with before. This helped lift the whole visitor experience and this was key for me.”
Peter Lederer: “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 industry will be more impacted by Air BnB than anything else it has seen in the last 50 years. A colleague stayed for five days in a stunning New York apartment for the price of a mediocre hotel. Why wouldn’t you? And there are other online developments that are pretty scary.”
He also talked about the environment and how Scotland has to work to maintain its beautiful scenery, caring more for the pristine landscapes. 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. The difference is made when the private sector comes together and decides it is going to do it. The public sector then has a role to play in supporting that, not the other way around. The other thing we don’t do well is selling. If we don’t sell, we don’t have a business.”
Stephen Leckie said a rapidly rising wage bill was a definite concern for the tourism industry. “An increase of 10-15% on wages comes straight out of profits. OK, we can probably still live with that but what happens to the money that is needed for investment? It’s back to quality: how do you keep investing when you’re spending a further £1.5 to £2m
a year on wages? It’s a real live issue.”
Lucy Scillitoe: “I would say congratulations to Scotland for achieving something phenomenal by having the Ryder Cup and the Commonwealth Games. From the perspective of looking at the tourism campaign and what we’ve learned, the question is ‘what next?’ We have The Open in St Andrews, and the Ryder Cup coverage was shown in 183 countries, reaching 500 million.
“The campaign needs to reach these people to get them back to Scotland. While a lot of people come for the golf, it is not all about golf. It’s important, but people who came for the golf can be targeted to come and enjoy other things.”
She spoke about how Scandinavia has become one of the castle’s strongest markets as direct air links from Norway have opened up, and also from the Middle East as the airlines were flying directly to Scotland.
Peter Lederer: “One of the things we learned around the G8 summit in Gleneagles was 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.” He said the Commonwealth Games and the Scottish Referendum have both 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.”
Dan Thurlow: “I joined the SECC at a great time. We were a very proud venue for many of the Commonwealth Games events. From a customer legacy point of view, it has made our job easier because a lot of people will have seen the SECC and Glasgow as the consistent backdrop for the Commonwealth Games.
The wider perception of Glasgow has changed – and it has proven its ability to host any kind of events, including the largest international sporting events in the world.”
Henk Berits: “Stepping up in our delivery is fundamentally important and I look forward to next year showing the best that Scotland has to offer. It has to get better and better all the time.”
Martin O’Kane: “The majority of visitors come to Edinburgh, the Highlands and Islands, they don’t head to Aberdeen, Dundee and Glasgow and I wonder how we move things forward to expand the festivals and cultural events and improve the transport link between the cities.”
Mike Cantlay: “During the recession we saw ‘stretch’ in Scottish tourism. Three things have been essential to success: gaining a clear view of the consumer and what they want; capable industry leadership; and access to capital finance as required. With those three things there are many businesses in a happy state. But not all.”
Stephen Leckie of Crieff Hydro gave some personal background on collaboration and leadership. “For many years, Crieff Hydro has been my home. Until about five years ago all I used to do was work, live and play in Crieff and my friends used to say I got a nosebleed when I left Crieff. This changed five years ago with the advent of the Scottish Tourism Initiative group, chaired by Bob Downie, which refreshed Scotland’s tourism strategy. This opened my eyes to what else was happening and the national picture in Scotland.”
It wasn’t a healthy position. The Scottish Tourism Alliance emerged from the ill-fated Scottish Tourism Forum which collapsed because of its over-reliance on the public sector. Leckie, as chair of the STA, went to see Scotland tourism minister Fergus Ewing and then set about fund-raising for the new body, urging business members to get behind the new body. The STA, through its various associations, now touches 75% of the 20,000 tourism industry businesses in Scotland.
“All these small businesses in geographical areas across Scotland are involved in their local STAs. There over 200 associations, such as the Blairgowrie and East Perthshire Tourism Association, all working more closely. For STA it is about bringing the tourism strategy into alignment with these hundreds of businesses.”
Kevin Boyd: “I’m passionate about living in a vibrant Scottish economy. I’m interested in the challenges being faced by Scottish business and how we, as a bank, can help. I agree it’s about capitalising on the fantastic things that have happened in Scotland in 2014. How do we make the most of that for 2015?”
Geoff Ellis, who is also a board member of Glasgow City Marketing Bureau, said: “My company does about 800 events a year on average from 100 people to 250,000 people at T in the Park. We work at all levels and we take the risk on most of our events and concerts and hope we sell enough tickets to get the cost right. One of our main clients is the Hydro and the SECC, where we do what Beyoncé to AC/DC, Take That at Hampden and One Direction at BT Murrayfield. The majority of our work is in live music and we’re best known for T in the Park, although we do other non-specific events such as the Papal visit to Bellahouston Park and the Ryder Cup Gala in September.”
Caroline Theobald posed the question of how could the tourism industry make ‘joined-up’ thinking happen?
Geoff Ellis: “Undoubtedly, 2014 has been a fantastic year for events in Scotland. I’d argue that Scotland is already on the international map, but we’ve increased its profile. It would be interesting to know how many local companies benefited from the variety of the events. MTV’s a good example because most of the companies are up from London. Maybe when we are tendering for events in Scotland there should be a quota of local companies, in management, general supply and public relations. That’s something worth exploring.”
Nick Finnigan spoke about his secondment with EventScotland during the previous MTV event in Edinburgh. He said 64 local companies benefited with 37 workshops by their events experts. “It’s a matter of deciding in advance what you want to get out of it. It’s about maximising the opportunity, with the experts inspiring the next generation of people who understand this is the benchmark for quality.”
David Cochrane: “We work with the people and the skills side of life. We run 23 events in Scotland and one in London each year. This allows us to raise substantial funds to go out and provide emerging talent scholarships for young people. We’ve been building up for 2014. Improving the level of skills in hospitality has to continue.”
Nick Finnigan spoke about the record-breaking attendances at Edinburgh Castle. “2014 has been an amazing year for us. In 2013, we broke our visitor attendance records and in the first seven months of 2014, we’d done the same every month. We are expecting to surpass the 1.4million visitors that we had, which is 300,000 additional visitors over the last four or five years. It is a measure of the success we have had. Edinburgh Castle is a much more versatile place than people realise.
“We need to be flexible and I think it is remembering the client. It is about building around what their needs are and not the ways we’ve been used to working over the last 20 years. We can only be as good as the lowest common denominator in the city.
At Edinburgh Castle, we have an important role in being ambassadors for the city. For the short break market around 73% of visitors who come to the city, visit the castle. If we don’t get that right, that’s going to be a bad start for the visitor and everyone else. However, it they visit us and the rest of the food and drink experience and accommodation is poor, then quite a lot of what we do will have been a waste of time. It is not just about a single business; it is a destination sell, benefiting the whole of Scotland.
“Where we’ve been successful is when we’ve been more joined-up. But we need to ensure that this continues. I think the relationship building and network among the tourism industry over the last few years has really held us in good stead. We need to keep up our collaborative work to make sure that visitors get the highest experience.”
Geoff Ellis talked about working more collaboratively and doing more corporate packages on events, particularly when the music tourist is willing to travel to see a concert or a band. “We don’t reach out enough, and hotels and restaurants don’t reach out enough to us. Perhaps this is something VisitScotland can help with. We all need to get better at it.”
Nick Finnigan said in the lead-up to the Scottish referendum, many international media outlets used the scaffolding set up with Edinburgh Castle as the backdrop. He was asked if he could keep the castle floodlights on all-night, every night because of international broadcasts from the city going on 24 hours. He said this was sorted after some phone calls. This was the kind of collaborative working that might not have happened ten years ago. The level of expertise, security and care at the major events cannot be discounted.”
Geoff Ellis: “If you fall ill at T in the Park you are probably better looked after than anywhere else in the UK on that weekend.At any one point, we have four A&E consultants on duty and that’s not the case for any hospital in Scotland on a weekend. There is large amount of logistics that go into any big rock and roll style event.”
Steve Hand said as an adopted Scot of ten years he has never known a year when so many friends and relations from south of the border wanted to visit Scotland or talk about what was happening. “It’s been a monumental year.”
Peter Taylor, who has been involved with the British Hospitality Association and the Tourism Leadership Group in Scotland, feels that connectivity, in terms of broadband, and connections and air travel have improved, but he says that Edinburgh and Glasgow as cities must work more closely together. “There is still this Edinburgh and Glasgow divide and that’s crazy. If you look at the cities in the north of England they are going to eat us up if we don’t start to work together.”
Mike Cantlay said that Edinburgh and Glasgow were now working together in the tourism sphere better than ever. He was also positive about the prospects for Dundee, with the new V&A on the waterfront, once the substantial building projects neared completion.
Peter Taylor believes there are still too many small tourism businesses – such as guest houses and Highland hotels – that are struggling to make ends meet. I slightly blame the estate agents who re-cycle some of these hotels every 18 months to two years. People come up from England and want to run a hotel on Skye with a pot of money. It’s all rosy and then it all hits in. I don’t have an answer to this – but maybe there is a partnership with banks. Could we have some way of helping people with a fast-track familiarisation for guys who are investing in a business in Scotland? We should be doing something to help these businesses survive.”
Mike Cantlay: “The Tourism Planning Framework tried to look across the country at what is going on. In terms of public and private sector investment there is £8bn on its way. There are also attempts by local authorities to see what is going on in communities and fill the gaps.”
Stephen Leckie says that involvement with local chamber of commerce and community councils can all help to ensure that tourism is part of ‘everybody’s business’ in Scotland.
Geoff Ellis said Scotland could make more use of the local knowledge of who came to Scotland and what they enjoyed, and where they stayed. “Surely we can use more of this as the legacy?”
Stephen Leckie believes community councils are at the heart of Scotland’s towns and important for regeneration. “Every Scottish town that is inherently linked to tourism has a heartbeat and that must continue. How do you keep this going? Visitors want to visit other places around Scotland, not just the cities.” He says Oban, Peebles and Crieff have amazing potential and Business Improvement Districts are vital, so that people can pull their resources together.
Stephen Leckie: “There is still a lack of awareness among the wider Scottish community about the importance of tourism, and that bothers me. Many MSPs don’t want to speak about tourism and still regard it as a cottage industry, when it is much, much more than that. It’s one of Scottish Enterprise’s four key industries for growth in the next five years. It has to be on the agenda for all the MSPs.”
Karen Wood explained how she has been with the EICC for 22 years and has watched it grow from a hole in the ground to a conference centre of international size and stature, with the new extension opening in 2013.
“Our raison-d’etre is to create economic impact for Edinburgh and Scotland. So we do have a vested interest in keeping the momentum to optimise the legacy opportunity. Certainly for us, the summer of 2014 put Scotland firmly in the global spotlight using multi-media channels to reach an audience of over one billion. This was a chance to shape international perceptions of Scotland as a world-class product on a global stage.”
Mike Cantlay warned that previous Commonwealth Games and Olympics, pre-London, had not maximised the benefits of the events.“The clear success of London post the Olympics is obvious but I’m mindful that all the recent Ryder Cups and Olympics didn’t maximise and if you go back to the Sydney Olympics they saw a drop after the Games, and it took them ten years to get back to where they were. We can’t let the momentum slow.”
Karen Wood said the evidence from London 2012 was the bulk of the net gain in tourism spend came after the event. “Scotland’s outstanding year on the world stage means we have much to play for. Our national brand index is riding high and we need to keep the pressure on government if we want to convert these gains into real economic benefits. Having elected to remain in the United Kingdom, what can we do collectively to leverage the full economic and diplomatic resources of the UK to maximise Scotland’s opportunities with key events and infrastructure into the future?”
Dan Thurlow: “Moving forward we are keen to create events on the back of the Games that continue to promote a healthy active lifestyle, such as running and cycling. We are dovetailing with people such as Glasgow Life and are in the process of building on the legacy. It will be 2016 when these kind of events could be rolled out.”
Stephen Leckie said the strategy had to be simply about growth. “It’s about growing revenue. Lifestyle businesses with £70,000 turnover saying, ‘They don’t want to grow anymore’, are not interested in the national picture of tourism. That attitude accounts for too high a percentage of our business numbers.”
Peter Taylor says some have a passion and belief and it goes wrong, while others have been around for a long time and are not interested in quality. “They are just getting by. One bad experience in a small hotel or a bed and breakfast can sour someone’s view of Scotland for ever.”
The question raised was should the industry care about such business when the likes of Trip Advisor will kill off under-performing and poorly run tourism businesses.
“Many people with no experience in the industry have been very successful. That’s because they see things from a customer’s perspective. They might have been in marketing and I don’t think they need to have experience in the industry. But they need acumen to make sound judgement and the guts and understanding that it is not going to be a walk in the park.”
Kevin Boyd: “It is a judgement. I think the days of banks lending on asset values have thankfully gone. We would never lend purely on bricks and mortar of a hotel. Banks need their money back. We are lending on the experience and the acumen of the people who will be running that business. It’s an art form.”
Mike Cantlay: “VisitScotland can only do so much, with our tiny marketing spend, it has
to be the industry that gets up and goes and sells Scotland. You have to go out there and win again. We also need to make more of the regular events – such as T in the Park and the Open Golf – which are recurring in Scotland.”
Lets make 2014 a springboard for success
The leisure and tourism industries have always been important to Scotland’s economy. 2014, though, has been unlike any other year in recent memory. As well as our wonderful countryside and heritage sites that see people flock to our hotels, our ability to attract leading acts from the world of entertainment and large corporate conference gatherings, this year also saw Scotland chosen as the stage for landmark events like the Commonwealth Games and the Ryder Cup seeing interest and visitors to our wonderful country rise even further.
The challenge now is, of course, to ensure 2014 is a springboard for the years ahead as opposed to being seen as a ‘one off year’ and Santander were delighted to sponsor a round table discussion that brought together so many of the individuals directly responsible for the success of 2014. Leading a successful business in this important sector for our economy is ultimately all about delivering ‘memorable experiences’ to customers so that they will not only return but also tell others what a great time they’ve had. Conversely, that one bad experience can have a totally opposite effect. It was a pleasure for us to be involved and support a debate that brought so many key players in this industry together to talk about the need to work collaboratively for the greater good of both the industry and the country of Scotland.
2014 was an outstanding year but the most important road is always the one ahead of you – we saw first hand that the leadership across this sector truly appreciates the issues we face and has the will and determination to face them head on. We look forward to being a part of supporting that ongoing success. Graham Silcock, regional director of Santander Corporate and Commercial bank in Scotland.