Summary of current situation:

• The current economic climate is very challenging for the tourism industry and we share the challenges operators face.
• It’s a great time to holiday in Scotland – great deals and a chance to rediscover your own country
• It’s more expensive to holiday in many other European destinations
• We know that the picture is mixed – some businesses are continuing to do well, others aren’t. There is more optimism  in the self catering and caravanning sector
• The tourism industry has shown resilience before and will bounce back from this.
• VisitScotland is working on an economic recovery programme plan with other agencies and the industry.
• VisitScotland is constantly monitoring the situation and refocusing its tactical marketing as appropriate to help combat the current economic environment.
• We are also monitoring the impact on businesses through regular industry surveys - download results of the most recent survey
• VisitScotland is freezing prices on a range of products and services, representing a £200,000 saving to businesses in real terms.
• Changing consumer habits find domestic visitors may be taking fewer breaks but for many segments the main holiday of the year will be in the UK. Serviced sector are finding that lead time for bookings is becoming shorter as enquiries wait closer to time of travel to look for bargains.

The Marketplace:

• Strong Easter sales are boosting UK holiday companies. Travel Weekly reports Superbreak sales are 10% ahead of target. It is suggested that the fact that Easter falls later this year (mid-April as opposed to end-March) could be a contributing factor. Bourne Leisure (Butlin’s, Haven, Warner etc) is said to be 17% ahead of expectation.
• In Spain, where visitor numbers have decreased by nearly 16%,  the government has produced a €400m (£343m) financial package for its tourism industry. The package is intended to modernise the tourism industry and make Spain a more attractive tourist destination. It will include low interest loans for small- and medium-sized enterprises in the tourism sector.
• Norfolk line has announced that over 50% of bookings on the Rosyth ferry are already sold. The service is to restart in May after the previous operator ended services in September 2008.
• British holidaymakers find prices are up to three times higher in cities in the eurozone than those outside it according to Post Office figures. The Telegraph’s Poll of the Week (for March 2009) revealed that 65% were being put off visiting the Eurozone because of the weak pound
• Air New Zealand will spend NZ$2.5 million on a major promotional campaign, matching the NZ government’s additional tourism funding for targeting Australian visitors. The New Zealand government will increase the current NZ$9 million investment in the Australian market by another $2.5 million. Air New Zealand is also offering up to 100 free return airfares to the regional tourism organisations (RTOs) to attract Australian media to visit their regions.
• Australian government tourism minister, Martin Ferguson, urged Australians to use up the average of 11 days of paid but untaken leave that each has accumulated launching the official campaign dubbed “No Leave, No Life”.
• Portuguese Government has increased the allocation of public funds to promote tourism by 20% this year
• The French government will provide EUR1.5 billion in funding over the next three years to the country's hotel industry:
• Air New Zealand will spend NZ$2.5 million on a major promotional campaign, matching the NZ government’s additional tourism funding for targeting Australian visitors. The New Zealand government will increase the current NZ$9 million investment in the Australian market by another $2.5 million.

International Passenger Numbers: The most recent results from the International Passenger Survey (IPS)show a decline in visitors from overseas. Year on year provisional results (comparing the first three quarters of 2008 v2007) show that:

• The number of visits to Scotland from Europe decreased by 8%
• The number of visits to Scotland from North America decreased by 11%
• The number of visits to Scotland from other overseas countries decreased by 7%.
• Overall visitor numbers from overseas have declined by 9%.

Provisional figures for domestic tourism (United Kingdom Tourism Survey) show for 2008 (January to December 2008):

• Trips show a -7.43% decrease on 2007
• Nights show a -6.87% decrease on 2007
• Spend shows a -0.85% decrease when compared with the same period in 2007
• Average length of stay for 2008 is up slightly by +0.61% compared to 2007 and spend per night is up by +6.46%

Visitor Attractions: The final provisional results from the Visitor Attraction Barometer for season (January to October 2008) show a decline in the number of visitors, with a decrease of -4%. Excluding visitors to Kelvingrove, season to date’ visitor figures are down only -1.8% on 2007.

Accommodation Occupancy: Although a seasonal variation occurred through 2008, with occupancy in the first quarter outperforming that of 2007, occupancy levels dropped over the summer of 2008 compared to 2007. For the year up to October compared to the same period in 2007, serviced accommodation occupancy has fallen 2% with non-serviced accommodation the same as 2007.


VisitScotland's Support to Businesses:

1. Quality Assurance / Marketing Opportunities - VisitScotland has agreed to freeze prices on the core products / marketing opportunities that businesses buy. Specifically, we are freezing prices on standard packages including Quality Assurance and marketing opportunities.
   
   Quality assurance products and marketing opportunity packages (our core products) represent 70% and 86% of our business customers respectively, meaning that the vast majority of our business customers will benefit from these changes.
2. VisitScotland has also committed to adhering to the Scottish Government’s 10 day target of paying bills to all its suppliers.
3. Growth Fund - VisitScotland has made changes to the Growth Fund to help more businesses to secure additional marketing funding.  Changes we’ve made include the following:
4. Raising the grant threshold to 50% of total budget.
5. Additional project management support from VisitScotland for larger projects and groups applying for funding.
6. Making QA more accessible by supporting groups to enter into a quality scheme as part of their application

Public Agency Joint Response:

VisitScotland, Enterprise agencies and the Scottish Government have established an action group to co-ordinate and deliver an economic recovery programme focused on:

Marketing: VisitScotland has already made significant adjustments to its tactical marketing, concentrating on opportunities in the UK by directing campaigns at consumers we believe will be less likely to be affected by the current economic situation.  Internationally, activity has been prioritised on Western Europe by focusing on destinations with direct access, growth markets like Spain and Canada and those with the greatest propensity to respond to Homecoming.  The messaging focus throughout has been on quality, value, deals and constant communication.

Advice & training: SE and HIE are rolling out an advice programme. Highlands and Islands Enterprise is supporting businesses through one to one advice sessions, web based information on www.hiebusiness.co.uk, an interest relief grant and an acceleration of capital spend.  It is also launching a series of business clinics.  Scottish Enterprise is rolling out a programme of advice through their account managers and on the Business Gateway website with a series of hints and tips aimed at helping businesses through the credit crunch.

Advice for Scottish tourism businesses

• Keep in touch with all of your customers
• Adapt your marketing tactics - tap into opportunities in Canada, Europe, Scotland and northern England
• Work together: joint effort through cross selling will make more impact
• Contact your local Relationship Manager to look at opportunities
• Use VisitScotland market research insights into customers and potential customers
• Answer enquires quickly
• Embrace fully IT opportunities
• Innovative marketing e.g. short-term  opportunities such as Homecoming
• Pool resources – joint campaigns / offers
• Focus on quality & value  
• Use VisitScotland Growth Fund for marketing opportunities
• Use information on  visitscotland.org & eUpdate
• Utilise Membership of Trade Associations
• Tap into VisitScotland’s Local Marketing and relationship marketing

The Scottish Government has full details of support and help available to businesses on their website - www.scotland.gov.uk/topics/economy/help

VisitScotland's Markeitng Activity:

Homecoming Activity

• Homecoming Scotland 2009 is a chance to invite people who love Scotland home to join in a unique celebration.
• Marketing in more than 40 countries including North America, India, Japan, South Africa,  Canada, Australasia, the UK and parts of Europe (for example Spain and Russia) – but the message is global.
• Homecoming is expected to bring a £44m boost to the Scottish economy and more than 100,000 additional visitors.
• A recent survey of the Scottish population showed 84% awareness of the campaign - 45% of the population intend to go to a homecoming event
• Homecoming has inspired hundreds of organisations from local authorities to community groups to get involved.
• More than 1 million people are engaging with Homecoming every month through websites and e-communication.
• VisitScotland is working with more than 2,500 Diaspora groups across the world to help spread the Homecoming message.
• The I am a Scot campaign is reaching 95million people across the globe
• Around 750,000 people have visited Homecoming websites in the last few months
• The ‘Caledonia’ TV advert, created by VisitScotland and EventScotland to generate awareness of the Homecoming year, featuring Scottish stars including Sir Sean Connery, Sir Chris Hoy and Lulu has been seen by millions of potential visitors in Scotland, Northern Ireland and the USA
• A 48 page A4 events guide promoting 220 events that are part of the Homecoming Scotland programme has been produced. 400,000 copies of this guide are being distributed throughout the UK.

UK and Ireland

• Perfect Day will again be running from the end of March through to August, following on from our successful Winter White campaign.     The creative theme is based on the Perfect day TV and cinema advert, filmed in the Western Isles, The £1 million campaign will promote Scotland as a destination with lots of things to see and do and key themes will include: Walking, Golf, By the Sea (Coastal activities), Wildlife, Food and Drink and Adventure.  In addition to these core themes regional up-weights will be added; including Edinburgh Events, Rugby, Aberdeen City and Shire, Glasgow and Outer Hebrides.  All activities will direct visitors to the enhanced www.visitscotland.com/perfectday website.    
• Accessible Adventure campaign.  Ongoing campaign to position Scotland as a destination which offers a variety of adventure activities.  The opportunity is free to businesses to help generate additional business in the shoulder season during the most difficult trading conditions.  Partnerships with a range of associated food  and drink products. Substantial media and online promotions in run up to Easter.

Europe

• E-communications:  With the strength of the Euro against the Pound, our e-communications  are highlighting Scotland as a great value destination to more than 400,000 consumers across Europe.
• Websites: New section of each site highlighting good value deals, with comparisons of costs between this year and 2008 providing clear incentives to European visitors to travel to Scotland.
• Public Relations:  Scotland as a great value destination also being highlighted by PR team, with January media newsletter going to 400 media contacts across Europe focusing on good value ways to enjoy a Scottish break, value for money air links and plans for a spring PR campaign, ‘City on Budget.’
• European Touring Campaign: £1m campaign launched in March across France, Germany and Spain.

North America

• VisitScotland has used the hook of Tartan Day and Scotland Week to promote Scotland within the North American Market.  To encourage North American consumers to beat the credit crunch, we launched a number of value for money deals with the US and Canadian travel trade.  These launches supported the February USA consumer newsletter, sent to 150,000 consumers focusing on strong value for money message with the new exchange rate providing US visitors with more bang for their buck in Scotland.

Emerging Markets

In recognition of the growing affluent sectors within some of our key emerging markets, VisitScotland has been working hard with trade partners in China, Hong Kong, Japan, India, Singapore, Dubai and Russia.  Highlights of this activity include:

• Partnering with Whisky Live in Tokyo, Shanghai and Delhi
• Sales missions to Japan, China and Russia
• Partnership activity with Emirates across the network in Asia
• Launch of the Scottish Prestige Golf Club in China, targeting high earning Chinese golfers with international membership of a Scottish golf club

Business Tourism Activity

• We are selling Scotland as a good value, more affordable option via PR activity focusing on the favourable exchange rate for European and North American corporations and the lowering of the VAT rate - including packages from Scottish suppliers.
• Increasing activity in emerging markets where economies are still seeing growth: attended workshop events in India in March 2009; increased focus on recruiting Indian and Russian buyers for Scotland Means Business Events in May 2009; increased web activity for India, China and Russia, planning Russian Trade Mission for Autumn of this year.
• Increased activity in Canadian market to promote favourable exchange rate: advertising in major trade publications like M&IT Canada; holding joint event in Toronto for

Updated April 2009