Neighbours and cousins: the future of international tourism in Scotland

Photo: Jithin Radhakrishnan via Flickr

In 2012 the Scottish Tourism Alliance (STA) published its ‘Tourism Scotland 2020’ plan, setting out targets for growth in the industry by the end of the decade and outlining a strategy for achieving them.

It lays down an ambitious target of between £5.5bn and £6.5bn for overnight visitor spend by 2020, an increase of a billion pounds from just over £4.5bn in 2011.

Although domestic tourism from the rest of the UK and within Scotland itself is by far Scotland’s biggest market, representing 81 per cent of trips and 60 per cent of spend in 2014, and is expected to remain so in the future, three key non-domestic growth markets were identified in ‘Tourism Scotland 2020’.

These are ‘near neighbours’ (Ireland, France, Germany, Spain, Italy, the Netherlands and Scandinavia), ‘distant cousins’ (USA, Canada, Australia) and ‘emerging markets’ (Brazil, Russia, India, China).

VisitScotland chief executive Malcolm Roughead identifies the same international markets. “Beyond the UK, Germany, France, the USA, Canada are key markets where we promote the very best of Scotland and deliver strong returns from that investment.

“We’re also successful in attracting visitors from the Netherlands and Australia, with landscapes and history and heritage providing particular appeal,” he told Holyrood.

Roughead names India and China as key for the future. “The emerging markets of India and China are important and we’re already seeing good growth and welcoming more visitors as they discover Scotland,” he says.

“It’s vital that the industry is ready for growth from these markets and groups like the Edinburgh Tourism Action Group are particularly active in preparing their membership to welcome visitors, ensuring businesses understand the expectations and requirements of visitors from these countries.

“Then of course there’s the growth potential in markets that we’re already successful in. Bringing more visitors from these markets is important, giving our visitors reasons to return more often, stay for longer, whilst helping them to discover new parts of Scotland,” he adds.

Although ‘Tourism Scotland 2020’ notes that the emerging markets “are unlikely to deliver significant returns for Scottish tourism in the short to medium term”, due partly to challenges of transport links and visa requirements, it highlights the importance of laying the foundations for the future.

“Longer term, however, their contribution to Scottish tourism looks set to grow more markedly. If we want to be in a position to service and capitalise fully on these and other emerging markets, we need to act now by aligning our tourism offer with what our market intelligence tells us about them,” it says.

‘Tourism Scotland 2020’ has growth projections for each of the key markets. In 2011 the EU ‘near neighbours’ were worth £731m and it was estimated they would be worth £875m to £1bn by 2020.

The overseas ‘distant cousins’ were valued at £414m in 2011 and projected to grow to between £505m and £598m.

Emerging markets were worth a much smaller £33m, but are growing at a far faster rate, with their value expected to more than double in the nine years from 2011 to between £70m and £83m by 2020.

There has been strong growth in Scottish tourism over the past few years, but there remains a long way to go if the ambitious targets are to be met.

The STA published its mid-term review in March, marking the halfway point of the eight-year strategy.

The STA said: “Based on existing activities, the sector may fall short of the 2020 £5.5 billion visitor spend target by £0.3 billion, however with focus on specific four key priorities the sector will be able to close the gap to 2020 and lay the foundations for sustained growth beyond 2020 to 2030.”

Tourism spend from America, Canada and Australia reached £557m in 2015, smashing the 2020 projection of £505m well ahead of time, albeit falling back from an even stronger turnover of £611m in 2014, which was probably boosted by the Commonwealth Games.

The emerging markets of Brazil, Russia, India and China also beat their 2020 projection in 2013 and 2014, reaching £75m and £89m in those years respectively. However, the market fell back significantly to £56m in 2015, just above 2012 levels.

The ‘near neighbours’ of the EU countries have had a difficult time too, with spend dropping from £662m in 2013 and £658m in 2014 to an estimated £643m in 2015, well short of the projected £875m by 2020. A vote to leave the EU could make this even more precarious.

There were 14.6 million visitors to Scotland in 2015, 2.6m of whom were from overseas, and total overnight visitor  spend was £4.9bn. This was mainly driven by the domestic market, but the sector remains optimistic.

“Despite international figures dropping from a high in 2014, a particularly strong year for overseas visitors, the general trend is one of growth,” said STA chief executive Marc Crothall on publication of the figures.

“With challenges ahead for the sector, such as rising costs and the uncertainty of the UK’s position in the EU, these figures give us confidence that the tourism industry is in a good place and that by continuing our collaborative approach with industry, government agencies and the new Cabinet Secretary, we are confident that we will meet the national tourism strategy’s ambition to grow visitor spend by £1 billion by 2020.”

In terms of sectors that are growing and successful, Roughead lists a few notable ones. “Business events is an area where Scotland is excelling,” he says.

“We have so much to offer delegates from around the world and these events and conferences represent a multi-million pound opportunity to boost jobs and inward investment.”

This form of business tourism is currently worth £1.9bn to Scotland annually and VisitScotland is working with partners to continue to grow the sector through its Conference Bid Fund.

Accessible tourism is another growth area, currently valued at £1.5bn. Tourism spend in this sector has grown by 33 per cent in the past five years as businesses in Scotland welcome more disabled tourists and older visitors.

Film tourism, or ‘set jetting’, is a further growth area for Scottish tourism, with USA Today voting Scotland the world’s best cinematic destination in 2015.

VisitScotland works with filmmakers to promote Scotland, and Macbeth and Outlander are recent examples of this work.

“The reach and draw of film is incredible. To capture Scotland’s credentials in this area VisitScotland created an award-winning publication, ‘Set in Scotland, A Film Fan’s Odyssey’, which provides an introduction to some of the locations seen on screen,” said Roughead.

A key theme throughout ‘Tourism Scotland 2020’ is collaboration across the industry to offer visitors outstanding experiences and one of the key areas driving future growth is digital.

The document’s mid-term review flags this up as a notable change from the original strategy in 2012. “Can you believe that digital was only mentioned three times in the original strategy? In 2016, digital has become the focus,” it says.

VisitScotland too is placing digital at the centre of its growth strategy. “The rise of digital is key here as more and more of us use mobile phones to plan and book our holidays and trips,” says Roughead.

VisitScotland’s first global campaign, ‘The Spirit of Scotland’, which launched in February, is digital and aims to reach 500 million people through content sharing, working with, for example, Google and TripAdvisor, as well as encouraging posting on social media under the hashtag #scotspirit.

Roughead explains: “VisitScotland is on the front foot with this, but we need more tourism businesses to understand and embrace this opportunity.

“The digital world is already here and will accelerate over the next few years. Scotland needs to be a leader or we run the very real risk of being left behind.”