What it means for Scottish tourism

We know that levels of confidence within the Scottish tourism industry have been falling. Our latest research with tourism businesses in May 2008 shows that 45 per cent of those surveyed feel less optimistic than last year. When asked the same question in 2007 only 19 per cent felt less optimistic than the year before. However, 28 per cent of businesses feel more optimistic than last year, which shows that falling optimism is not an issue across the board.

Latest figures are also mixed; for example forward bookings in many areas are down in June and July compared to last year, but up in August. Some businesses are reporting significant declines; others significant growth. This mixed picture appears to hold across the country. It is not clear at this stage that any one area or type of business is doing much better than another.

However, we know that our core market – which is in the older age bracket – is more resilient to short term economic pressures as they are likely to have fewer or lower outgoings and more disposable income. Younger consumers are more likely to be affected by any downturn.

VisitScotland’s Marketing Approach
Practical advice for tourism businesses
Trends which may have an impact

Practical advice for tourism businesses

Here are some practical pointers to make your promotional budgets work harder for your business:

• Make sure you keep in touch with all your customers – use events or offers to encourage existing customers to come back – go to our listings of events going in on your area with our what’s on guides
• Work with other businesses and promote what they have to offer - this complementary promotion with have more impact on your customers.
• Adapt your marketing tactics – tap into opportunities in Canada, Europe, Scotland and northern England
• Contact your local Business Relationship Managers, who can talk you through appropriate marketing opportunities in more detail.

The global and domestic economic situation is likely to bring opportunities as well as threats to Scottish tourism.

Trends which may have an impact include:

• Weak dollar, strong euro - making it more expensive for US visitors to come to Scotland currently, but very good value for European visitors. The value of the Euro is also making it more expensive for UK visitors to holiday in Europe, which offers us an opportunity to attract more UK visitors to Scotland
• “Economic gloom” – media reports about the ‘credit crunch’, increasing fuel, energy and food costs, concerns about rising inflation and potential interest rate increases are all likely to play a part in people’s views about their finances and what they are willing to spend their money on this year. Some reports are suggesting that more people are likely to stay at home; however, others suggest that people will forgo other luxuries to ensure they still have holidays.
• Fuel surcharges – potential increases in air fares as a result of increasing fuel costs will bring opportunities to attract more domestic visitors, but could also deter some of our international visitors
• House prices – concerns about the value of people’s homes decreasing will mean that people feel poorer, which might mean that they spend less when they travel
• Greater indecision – there is a lot of speculation in this area about what consumers will do to react to the factors outlined above. Although not much can be said with certainty, it seems that consumers’ behaviour may be more erratic and holiday decisions will be made at the last minute.

Updated: 21 July 2008