Research and Statistics

Scenario Planning

Viewpoint

A regular feature, inviting key individuals to comment on an aspect of scenario planning. This month Alastair Durie from Stirling University discusses the future of tourism in Scotland.

What is history telling us about the future?

"Tourism has become the elixir of life for the Scottish economy.": Alastair Durie

Past performance does not guarantee future returns. All holders of endowment policies have become brutally aware of this. So much was promised to those who took them out in the late 1980s, not just your mortgage covered, but a bonus as well. But the outcomes have fallen far short of expectation, and wishing otherwise don’t make it so. What worries me is that government at all levels is pinning so much hope on tourism, as a tool of regeneration, as a source of employment and income, even as an instrument of social integration- betting and banking on its growth.

Manufacturing industry fades, but tourism, heritage and culture will fill the vacuum. Government is now as interested in and committed to tourism as it once was completely indifferent; the Victorian state left it almost entirely to private enterprise, in the hands of railway and steamship companies, to hoteliers and resort developers. But now the state funds promotion and provision alike, even if not to the level of Dubai, say. Tourism has become the elixir of life for the Scottish economy. And indeed much has been achieved.

But is a confidence that growth will continue reasonable? Or is it like those projections which we got with our policies, which based the outcomes on various rates of return with the lowest (-the lowest-!) 4% per annum?  Has the past anything to say which might cause some reflection?

One thing which underpinned the takeoff of tourism in and to nineteenth century Scotland was the immense growth in demand at all levels of society, thanks to the economic success of the British economy. People had more disposable income and time, and chose to spend it on holidays at the seaside, or on the golf course, or in the hills. There was plenty of cheap labour for the hotels, some of which was immigrant, just as today. When the First World War broke out, the hotels of Edinburgh were crippled by the loss to military service or internment of their French waiters, German musicians and Austrian chefs. But over time, though the holiday became a priority for most households, they began to range further afield away from Scotland, with its uncertain weather and rising costs, as the arrival of cheap charter air flights in the 1960s was to prove.

Demand in the form, for example of the grey or the pink pound, is still growing, but will it continue to do so? And if it does, will Scotland benefit, or will other destinations? There are the unknowns: the cost of air travel, the continuance of terrorism, the changes in the global climate, to which no forecasting can yet give a clear answer. Take the very significant question of global warning - will that lead to a Costa Scotland? There seem to be conflicting views on this, with the only agreement amongst climatologists that change is accelerating. Tourism is an immensely competitive business, but there are key variables which we cannot easily predict, let alone control.

Beware miss-selling. Tourism has done extremely well for Scotland, and may continue to do so. We can hope for that, and work towards its continuing development. But the future is, and always will be, uncertain.

Alastair Durie
Stirling University
March 2006