First Minister's speech at Scottish Tourism Alliance

Tourism without a shadow of a doubt continues to be one of the most important, vibrant and successful sectors of the Scottish economy.

We know that anecdotally, but it’s also abundantly clear from the latest statistics. Last year saw an increase in the number of people visiting our country; we saw record admissions at our most famous tourist attractions; and a total spend by both domestic and overseas tourists of over £5 billion.

That’s a fantastic record of achievement. The first thing I want to do today is say a heartfelt thank you to all of you for that. And in the last month of course, the sector has had another reason to celebrate – with the opening of the magnificent Dundee V&A. The Scottish Government is very proud to have supported that project, having visited it myself on its opening weekend, it’s clear that it’s a world class tourist attraction, which will attract hundreds of thousands of visitors each year.

Now, the ongoing success of Scottish tourism reflects the talent, dedication and creativity of the 200,000 people working in the sector. And it’s our job as the Scottish Government to do everything we can to support that continued success and make sure of course that that there is a relationship between the overall success of our tourism sector and the success and responsibility of all the different companies and interests working in that sector. And as a powerful voice representing the sector I do believe, not just because I’m sharing a platform with them right now, that the Scottish Tourism Alliance deserves a huge amount of credit for all of this success.

I saw once again just a few weeks ago, in August, what a vitally important role you play. I was in Arran to launch the Food Tourism Plan – which the STA played a central role in developing. That Plan sets a target of doubling visitor spend on food and drink. It’s an ambitious, considered and forward-thinking document – and I think it exemplifies the approach the STA takes.

Those qualities are also strongly reflected in the theme of today’s conference - which considers the Future of Tourism in Scotland. That of course is an enormously important subject. Despite the undoubted success of recent years, it is clear that our tourism sector faces very real challenges, as well as significant opportunities. And so this morning, I want to talk about some of the ways in which we’re aiming to support the development of Scottish tourism, in the years ahead.

Of course as Marc has already alluded to, perhaps the most pressing challenge and the greatest uncertainty facing tourism at this time – along of course with every other sector of our economy - comes from Brexit.

The past couple of weeks have merely confirmed what has been increasingly clear since the 2016 referendum. There remains no clear or credible plan to protect our vital interests in the context of Brexit.

As a result, we now face the very real prospect of exiting the EU in the most damaging way possible.

That would have a profound implications for Scotland’s economy as a whole. But perhaps two stories from the past week really highlight the specific risks of that for tourism.

On Monday, the UK Government published a report on the future of aviation under Brexit. That report acknowledges that – in the absence of new agreements – there would be significant disruption to air travel between the UK and EU countries.

With Europe currently accounting for seven out of Scotland’s ten key visitor markets – and around 60% of our overseas visitors – that is always going to be a matter of huge concern.

Another risk was highlighted on Tuesday – when the UK Cabinet agreed its post-Brexit approach to immigration. They’ve reportedly approved a skills-based system – which would see EU nationals facing the same immigration rules as people from other countries. It would require people coming to live and work here to meet a salary threshold of £30,000 per year.

Now, that decision not only shows complete disregard for the deep and long-standing ties between the UK and other EU countries. It also threatens to create a workforce crisis in sectors that are absolutely critical to the Scottish economy.

Just to illustrate that a bit more, under that approach it’s estimated that 75% of the EU nationals currently working in Scotland would have been ineligible to come here in the first place.   It will therefore be incredibly difficult – in the future – to maintain and to expand the workforce on which our economy depends.   And again, our tourism industry – which has 27,000 EU national working in it – will be one of the sectors most at risk.

Of course, this is just the latest example of UK immigration policy running counter to Scotland’s interests which is why we continue to call for the devolution of this policy, within the current immigration system.

The Scottish Government has backed that call. It reflects the strong consensus which exists - across Scottish society  - that our Parliament should have the power to determine immigration criteria, based on our specific needs.

Those powers would help us to mitigate some of the potential damage caused by Brexit. But ultimately, to protect this country’s interests, it’s vital that the UK Government takes a sensible approach to leaving the EU.

The Scottish Government continues to argue that the whole of UK should remain in single market and the customs union. And so long as there is a chance – however slim – of the UK adopting that approach, the Scottish Government will continue to make the case for it.  

Of course at the same time as that, we’re also taking major action to prepare specific sectors for the potential impact of Brexit.

For example, last month we announced our intention to develop a specific campaign promoting tourism as a career of choice. That’s one way in which we’re aiming to strengthen and protect the sector’s workforce and we want to work closely with the industry as we take that important commitment forward.

In addition, we’re taking other steps which will help to protect tourism and other sectors of our economy. We’re continuing to strengthen our ties with our nations in Europe and around the world, by expanding our network of innovation and investment hubs. And through the Scotland Is Now campaign - we are redoubling our efforts to present Scotland as an open, welcoming, and outward-facing nation. And a nation that people across the world should want to visit

All of that will benefit our tourism sector. But of course the Brexit threat makes it even more important that we address head on, the other key issues facing the sector. As a government, we want to do, and it is our responsibility and duty, to do everything we can to support, enable and facilitate your success.

That’s why we have listened to your views on Business Rates - and set a cap on rates, for all but the very largest hospitality premises. And I know Derek Mackay will be paying very close attention to your representation ahead of the draft budget later this year.

It’s also why we remain committed to reducing Air Departure Tax by 50%, once the issues around the Highlands and Islands exemption have been resolved. Of course our ultimate aim is to abolish the tax entirely.

And it’s also why, and let me stress the point, we are absolutely determined to ensure that your voice – the voice of industry and the tourism sector – is properly heard in the on-going debate around a tourism tax.  As you know, the Scottish Government has no plans to introduce a tourism tax.  However, we do recognise, as you do, that some local authorities are making the case to have the power to do so, should they consider it an appropriate response to local circumstances.

We believe this issue does require very careful consideration, for many of the reasons that Marc has referred to this morning.  So we will be accepting the STA’s call for an objective process of consultation – involving the STA, COSLA and other key partners – which will examine in detail the arguments for and against a tourism tax. We are determined that all voices will be heard and that the details of the process will be properly set out shortly. I look forward to the STA to continue to be a valued partner in these discussions.

Now, alongside supporting, as we will continue to do, creating a supportive business environment, we’re also investing in the infrastructure which is so important for tourism.

Of course we’ve already delivered transformational projects like the Queensferry Crossing, the new M8, and the Borders Railway. The dualling of the A9 is well underway, and later this year, the new Aberdeen Western bypass will open.

And we’ve matched the upgrade of our transport network with investment in our digital network. Thanks to our broadband programme, over 95% of homes and business across the country now have access to superfast broadband.   By the end of 2021, Scotland will be the only part of the UK where every single home and business across the country will be covered.

All of this investment is helping to open up tourism opportunities across the country. That’s a major priority for us. We want to ensure that more and more communities can benefit from – and contribute to – the growth of the sector.

And there are two different strands to that I think. One – which has drawn a lot of attention and rightly so – is ensuring any growth in tourism is sustainable. It’s fantastic, absolutely fantastic, that so many more people want to visit our country, but we must ensure that our communities have the capacity to manage increased levels of demand.

That’s the aim of our £6 million Rural Tourism Infrastructure Fund. It will support infrastructure projects which are designed to relieve specific pressures arising from tourism.   Three pilots projects in Skye and Orkney are already receiving funding – to improve car parking at key visitor venues. And I’m pleased to say that the successful applicants for the initial stage of the fund will be announced later this week.

Our other key aim is to encourage more visits in parts of the country which have a huge amount to offer, but which comparatively, have often been overlooked.

Now, this year my husband and I chose to spend our summer break at home visiting different parts of the country. Now one of the highlights of that experience for us was visiting Wigtown in Dumfries and Galloway, home of the famous book festival which of course is celebrating its 20 year. That was an important reminder that the south of Scotland is already a major destination for cultural, coastal and forest tourism. But there’s clearly major scope to build on its existing strengths.

The Scottish Government has announced today that we’re providing further support for a project in Glentress Forest, near Peebles. That project – which we’re supporting with a total of £1 million - will eventually see the construction of 56 eco-cabins.

It means the site – which already attracts 300,000 people a year – will be able to bring in even more visitors in the future. And the construction itself is expected to create perhaps 60 new jobs.

That’s good news obviously for Glentress and the Tweed Valley but it’s an example of that wider commitment to support the growth of tourism – across the whole of our country.

To conclude and as I said at the start, tourism is no doubt one of our Scotland’s great success stories and we should be really proud of it.

The growth of your industry helped to strengthen our local communities, it helps to increase our national prosperity, and it helps to enhance Scotland’s international reputation.

Building on the industry’s achievements – and continuing that success – will not be easy. Brexit presents a significant and in my view, an unnecessary risk to the future growth of Scottish tourism.

But the Scottish Government is determined to do everything we can to mitigate that threat. And, just as we have for many years now, we will continue to support the industry – to seize new opportunities for growth and development.

And as we do that I know that the Scottish Tourism Alliance will continue to play a leading role in making Scotland a world leader in tourism.

So let me end by thanking you again for inviting me today. I want to pay tribute to the work of the STA. And thank you all the fantastic contribution you have made and are making to tourism in this country.