Economics of Independence Scotland's Economy

Scottish Tourism and ‘The Winning Years’

Written by Kenneth Wardrop

parade_tartans22014 is an important year for Scottish tourism, the culmination of a series of themed years (Food & Drink 2010/ Active 2011/ Creative 2012/ and Natural Scotland 2013) with the Year of Homecoming 2014, described  as ‘the winning years.

Event highlights in 2014 which will give a significant boost to Scottish tourism include: the Glasgow Commonwealth Games, the Ryder Cup and Bannockburn 700th Anniversary Commemorations. 2014 will also see the vote on the independence referendum, and in my opinion a ‘yes’ vote would significantly boost Scottish tourism.

Tourism is a significant economic driver for Scotland but the impact can be highly significant in some local economies. Tourism generates around £11 billion of expenditure every year for Scotland (2011 figures and including direct and indirect expenditure). While tourism supports 340,000 jobs (220,000 direct and 120,000 indirect) [source: Tourism Development Plan for Scotland January 2013]

Tourism helps support transport connections, cultural and leisure facilities, and infrastructure, bringing benefits to local communities and the country as a whole. Events such as the Commonwealth Games and Edinburgh’s festivals generate through global media coverage, a positive image of Scotland.  At the same time the buoyant conference sector showcases academic research excellence, helps promote Scottish business expertise, and acts as a catalyst for commercial partnerships and investment opportunities.

Tourism is a global business, and as a result of 4% growth in 2012, for the first time global tourism arrivals broke the one billion mark. The World Tourism Organisation is projecting continued growth of between 3 and 4% in 2013, making tourism one of the few industry sectors that can stimulate economic growth [source: UNWTO]. Scotland has a mature tourism industry based on a pedigree dating back to the 19th century, and a wealth of natural, built and cultural assets that position our country well to maximise the opportunities from global tourism. Add to that the fact that, despite the current economic climate, Scottish tourism has generally shown incredible resilience.

The industry benefits from effective collaboration between the public and private sectors and a focused tourism strategy, visitor infrastructure investment, and sustained levels of marketing. Strong evidence of this partnership is evident in the shaping of ‘Tourism 2020’  the national tourism strategy published in June 2012.

Tourism is a devolved matter to the Scottish Parliament enabling our government to shape specific responses to our distinct market challenges. A good example is the ‘Homecoming 2014’ initiative providing a positive marketing boost for Scottish tourism through this recession. It also represents powerful advocacy for the argument for local control over local economic levers, and local policy responses to specific Scottish market conditions. Continued Scottish government support and sustained levels of investment in the tourism agencies (VisitScotland, Event Scotland, and Scottish Enterprise), and investment in cultural and heritage infrastructure through agencies such as Historic Scotland and Creative Scotland, contrasts dramatically with the decimation of equivalent agencies in England as a result of Westminster policies and cuts.

There are many Westminster reserved matters which create barriers to the realisation of Scotland’s tourism potential and adversely impact on our global competitive position a few of these would include:

  • The UK visa policies
  • Rules and regulations for foreign visitors
  • Fuel duty on petrol and diesel
  • VAT levels on accommodation
  • Air Passenger Duty (APD).

Let’s look at APD and explore the adverse impacts of other reserved matters.

Edinburgh attracts over 1.4 million overseas visitors per annum and after London is the UK’s second city for international visitor arrivals. At the same time visitors from the south of England are one of Scotland’s primary markets. As a tourism destination Scotland is particularly reliant on air connectivity especially for the important city break and business tourism markets. A high speed cross border rail link connecting to our major inbound UK and continental markets remains uncertain. Good air connectivity will remain important for the foreseeable future. In consideration of the impacts of the high levels of APD being imposed by Westminster, I will put aside the environmental arguments on the basis that for Scotland there are mitigating circumstances for air travel based on our geography and remoteness from market.

Recent increases in APD have provoked a vocal response from Scotland’s air transport sector following the UK Government’s announcement of an 8% rise in APD in 2011.  For short-haul flights, the tax increased from £12 to £13. For long-haul flights of more than 4,000 miles, it went up from £85 to £92. “Scotland’s three largest airports have called on the chancellor to conduct an urgent review of air passenger duty. It follows a report commissioned by Aberdeen, Glasgow and Edinburgh airports which claimed the tax could cost Scotland more than two million passengers a year by 2016. It also warned the move could cost the Scottish economy £210m a year in lost tourism spend.” (source: BBC 1 November 2012 )

In conclusion, Scotland’s recent and future tourism success is closely tied to improved direct international air routes. At the same time visitor dispersal around Scotland is a key strategic objective and competitively priced air travel is vitally important to achieving this.  An independent Scotland, with full governmental control over the imposition of taxes such as APD, creates the ability to consider our distinctive macro-economic, market and business environment, and to ensure that our competitive position is fully protected.

As a devolved matter which is still negatively impacted upon by connected Westminster decisions. Tourism represents a good example of what could be achieved from control of policy at a local level, and the creation of the right enabling environment to fit Scotland’s market circumstances. Complete self-determination and full control over all policy levers will create the ability to respond to Scottish tourism’s distinctive business challenges, and unlock the full wealth creation benefits and return for the country from this important sector. So as far as tourism is concerned a Yes vote will ensure that Scotland’s tourism sector will be better placed to really have ‘winning years’ .

 

Further Reading:

Life after 2014 – Holyrood Magazine

The Glasgow 2014 Brand – Glasgow 2014

 

Support Business for Scotland, as we convince the business community of the benefits of voting Yes in 2014 – Read More

About the author

Kenneth Wardrop

Kenneth Wardrop currently manages his own tourism and economic development consultancy.

Kenneth has over 25 years of professional experience in economic regeneration, destination management, place marketing, brand management, cultural tourism, and festival/events operations.

Kenneth also has a track record of leading successful public - private sector collaborations in Edinburgh and Stirling.

4 Comments

  • A Fantastic article Kenneth. You make many valid points. The majority of which I agree wholeheartedly with. Ian, I see where you are coming from with your point.

  • If independence becomes a reality Scotland will require a marketing organisation which can enhance our overseas presence in key and emerging markets. That organisation is likely to be based on VisitScotland. IMHO they do a decent job within their existing powers and any discussion of their activities should not detract from the big picture which Ken has begun to address extremely well in his essay. My view is that we need to be considering the options for appropriate marketing structures post independence, how it links with our existing inward investment structures through SDI and how we can develop a new global network linked to trade and diplomatic outlets where we currently have none.

  • Why complain about APD when we continue to support and finance (Visit Scotland) which adds extortionate commission charges to visitors accommodation bills. the state run (Scottish Tourist board )only charged the price of a phone call. I have not met a single person in the tourism industry with a good word to say about this self serving organisation. The much hyped advert at the end of the credits for the film brave,was a joke, how many people stay to watch the credits

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