STA signature sessions: Tourism Secretary speech

I’m delighted to be here today to take part in this new, innovative approach to this year’s conference, with its focus on future-proofing Scotland’s tourism industry.

Each of the signature sessions you will attend today very much reflects those themes that are at the forefront of the Scottish Government’s approach to the visitor economy: delivering a successful tourism sector; enhancing Scotland’s international reputation; and looking towards opportunities for the future.

All of these things also reflect the nation that we want to be: one that looks outwards and to the future, and that makes the very best of our many assets.

I am very pleased to note that, over the past twelve months, we have seen yet another year of unprecedented success for Scottish tourism – a success in which you have all played a critical part.

The past year has seen some very significant achievements:

• the opening of V&A Dundee – with the Scottish Government as the main financial backer - has been part of a huge transformation on the Dundee waterfront and has contributed to significant increases in footfall at visitor attractions in Dundee and the surrounding region - Discovery Point, the waterfront home of RRS Discovery, saw visitors rise by 42 per cent while Verdant Works, which tells the story of Dundee’s industrial textile heritage, recorded an increase of 21 per cent and Arbroath Abbey saw a rise of 18 per cent
• £3.6 million has been allocated to the first 21 successful projects through our Rural Tourism Infrastructure Fund, improving visitor facilities in communities throughout rural Scotland

We have also seen the successful conclusion of Scotland’s Year of Young People, which will leave a lasting imprint on the lives of young people all across Scotland for many years to come.

And last month the First Minister announced our support for the Andrew Fairlie scholarships, which will provide a fabulous opportunity for both a female and male chef to further their careers.

Andrew’s memorial service took place on Monday and he will rightly be long remembered as a pioneer in Scottish cuisine. It is most fitting that his name will live on in the development of Scotland’s chefs of the future.

Scotland’s success is reflected in numbers of international visitors growing strongly – particularly those from Europe, with an increase of over 14 per cent in the year to last September. In contrast, for the rest of the UK, visitor numbers have seen significant decreases.

The success of the sector though, is only possible through the contributions you make. The Scottish Government can support the sector but it through your effort that it thrives. I want to acknowledge that and to thank everyone here today for the contribution they have made.

But we cannot be complacent. The growth the sector continues to see is very much welcome but it needs to be acknowledged that our tourism sector is fragile.

Yes, we have seen success in terms of the growth of visitor spend, which saw an increase of more than 3% last year, but this is not commensurate with the growth in visitor numbers. which means our visitors are not spending as much when they are here.

The international market is incredibly competitive and we need to continue to work extremely hard to draw visitors to Scotland and ensure they have an outstanding experience when they are here.

I recognise that this remains a challenge and that the impressive headline figures may not accurately reflect the challenges that Scotland’s businesses, your businesses, are facing to remain competitive, particularly from increasing overheads and the impact of a weaker pound on costs of food and drink.

Our success is also tempered by a time of unprecedented challenge and we need now, more than ever, to ensure the world knows Scotland is open and welcoming.

On the eve of the UK’s exit from the EU, this week, the Prime Minister’s deal was, once again, overwhelmingly rejected by the House of Commons. It is essential that a catastrophic "no deal" is avoided: for our country and for our industry.

Last night a rejection of ‘no deal’ at any time did get support, yet it is yet to be law. It absolutely essential that article 50 is extended to enable another referendum on EU membership to be held but the EU will only support an extension for a purpose.

The Scottish Government will support any such referendum, provided it has the option of remain in the EU on the ballot paper.

One of the biggest issues facing Scotland, without doubt, is continuing to access labour under freedom of movement. I can give you the strongest assurance that the Scottish Government is taking this extremely seriously.

The independent Expert Advisory Group on Migration and Population which was set up, has clearly outlined the harm that UK Government proposals would have on Scotland, potentially reducing net migration by up to 50 per cent in the coming decades and jeopardising Scotland’s economy, public services and future population growth.

There will also be a disproportionate impact of the UK Government’s proposed salary threshold of £30,000, as around 63 per cent of workers in Scotland currently earn below that level.

The threshold would also exclude a greater proportion of women, as well as younger people at the start of their career.

The Scottish Government has been consistently clear that freedom of movement has enriched Scotland and should be allowed to continue.

We will continue to press hard for a fair, tailor-made immigration solution for Scotland that values all skills and works for businesses.

And for those EU nationals who have made Scotland their home, we want to let you know that we value you, we value your contribution to our country, our economy and culture, and we absolutely want you to stay - you will always be welcome in Scotland

This ongoing uncertainty, coupled with rising costs both for businesses and for individuals, means that we cannot take tourism success for granted.

Some levers, like VAT, are not within the control of the Scottish Government. That doesn’t mean that we will not seek to put pressure on the UK Government to take steps to improve the existing business environment for all sectors, including tourism.

I am deeply committed to supporting the Scottish tourism sector, and to enabling it to maximise its success - success that is both good for business and good for all of Scotland and its people. 　

And sometimes that is challenging – not least when the Scottish Government had to agree to consult and legislate on a locally determined tourism tax

This was as a direct result of negotiations with the only Party willing to seriously engage in the budget process, and was a necessary part of the agreement which enabled us to deliver a budget that provides certainty and stability to tax payers and businesses at a time when we face significant challenges from the UK leaving the EU.

The contributions that we have already received as part of the previous national discussion on the tourist tax and published on 7 March have been extremely useful in drawing out a number of the very important and complex issues and concerns.

That legislation will allow those local authorities that wish to do so, to introduce a tax to meet the needs of their own area.

Let me be clear about two things – firstly, there will be no compulsion for local authorities to implement a tourism tax.

Secondly, the requirement for the Scottish Parliament to consider legislation means that there will be no tourism tax levied in 2019 or indeed the 2020 season, as consultation, legislation and indeed implementation if any council wants to introduce a tax, will take some time.

As the Scottish Government and Scottish Parliament take forward and consider this legislation, it is important that everyone’s voice – all of your voices - are heard, so that whatever is produced services Tourism and Tourism needs.

And we have a track record of working with the STA, and of responding to calls from the industry and. For example:

In the Budget, we protected VisitScotland’s budget for next year.

You asked us to keep the Small Business Bonus – we did.

And we continue to provide the most competitive reliefs package in the UK. Our package ensures that over 90 per cent of properties in Scotland pay a lower poundage than they would in other parts of the UK.

You asked us to continue transitional relief - we confirmed in autumn last year that we would do so, for the hospitality sector in Scotland, until the next revaluation in 2022.

This annual real-terms cap on rates bills of 12.5 per cent offers valuable certainty for eligible properties in a time of huge economic uncertainty.

You asked us to champion tourism as a career of choice and we included this as a commitment within our Programme for Government.

You asked us to empower our sectoral and destination organisations and we have done so. In particular, we are continuing to explore the potential of the adventure tourism sector to identify opportunities for unlocking growth and we have recently announced £40k to WildScotland for the development of its ambitious sectoral strategy.

We have also been sensitive to the needs of our regions, in particular the South of Scotland where we are establishing a new enterprise agency and supporting the region through the SeeSouthScotland marketing campaign and investment in infrastructure both directly and through the South of Scotland Economic Partnership.

So you can be sure that we will continue to work with you and that the industry’s concerns will be listened to by the Scottish Government.

Today’s conference is about looking to the future and there are many positive things to look forward to.

Part of our international reputation centres on delivering high-quality visitor experiences. This has long been one of our most important objectives as we strive towards making Scotland a world-class destination.

To deliver those experiences, and as we work to develop tourism as a real career of choice for those at all stages of their working life, it is now even more important, that those careers should be built on a culture of fair work.

As a government we have committed to increasing the number of workers receiving a Living Wage by 25,000, and we welcome the support and engagement of the tourism sector in achieving this.

We are already seeing more and more excellent examples, like Rabbies’ Tours and the Auchrannie Resort on Arran.

It is also vital that our workforce continues to have the skills necessary to provide a high quality tourism product that gives Scotland that competitive edge.

The industry, in partnership with Skills Development Scotland, is already committed to bridging the skills gap and encouraging new entrants through the Tourism Skills Investment Plan.

Through this work, over 2,700 Modern Apprenticeship new starts were delivered within the tourism and hospitality sector in 2017-2018.

Together with industry, we are encouraging these new entrants to see tourism as a career of choice with rewarding opportunities.

Our Themed Years have already been a great success in driving collaboration on tourism and events across the public and private sector.

The Year of Coasts and Waters next year will showcase the many and varied water-based opportunities across on the mainland and on our islands, including our wonderful whiskies and gins.

In my role as Cabinet Secretary, I regularly meet with the other devolved nations to ensure that Scotland’s priorities for the sector are represented.

I will continue to press the UK Government to ensure that the Tourism Sector Deal meets the needs of our industry here in Scotland.

And we will work constructively with the UK Government over the coming year. Just yesterday the Scottish Government announced a commitment of £85 million for the Borderlands Growth Deal as part of the wider quantum of funding.　

And this is of great opportunity for tourism as the deal progresses to a Heads of Terms agreement.　

And last week the Cabinet Secretary for Transport, Infrastructure and Connectivity announced the agreement of Heads of Terms for the Ayrshire Growth Deal, with total investment of over £251 million from the Scottish and UK Governments and the partner local authorities in Ayrshire.

This support will help improve infrastructure, create jobs, and provide opportunities for tourism in the area, through a result of direct investment, including up to £22.5 million – with £18.5 million from the Scottish Government - towards developing Tourism in North Ayrshire.

The creation of the new National Tourism Strategy is well underway and some of you may already be involved in its development.

The new strategy will look at what Scotland can offer the world in terms of unique and world-class experiences; what we can learn from other countries that are at the forefront of tourism development; and the new and exciting tourism trends that are emerging.

The new strategy will underpin how we support the development of inclusive growth across all parts of the country going forward.

While we continue to work with the industry on the new strategy’s development, we are continuing to implement the current strategy. I’ve already mentioned our commitment to support our sectors and regions.

As some of you might recall, at the Autumn Conference, the First Minister announced funding for the development of mountain biking trails and site enabling works at Glentress.

This has allowed Forest Holidays to progress £10 million investment in 56 Eco Cabins, greatly improving the visitor offer in the area.

In line with our aim to explore the potential of the adventure tourism sector, we are now keen to work with our partners to examine the potential of the remaining 7 Stanes sites across Dumfries and Galloway and the Scottish Borders.

This will make sure that our visitor and mountain biking offer remains fresh and ensure that the 7 Stanes continues to be a mountain biking destination of choice and of international significance.

I am therefore pleased to announce today that we will provide Forest Enterprise Scotland with £200k to take this work forward.

This will explore the tourism potential of the sites and encourage further mountain biking activity and tourism in Scotland, creating momentum to 2023 when we will host the UCI World Championships. 　

Bringing these World Championships to Scotland follows the success of another spectacular sporting event, that being the first combined European Championships which took place last August.

The championships and the associated festival were attended by half a million people in Scotland and 44 free-to-air broadcasters and partners across Europe and worldwide covered the event with 567 million viewer-hours in the ten key European markets, demonstrating once again Scotland’s capacity to successfully deliver major events.

We should not underestimate the significance of hosting the UCI Cycling world championships. The bold and innovative approach we have taken means that this will be the first time ever that all the cycling disciplines have been brought together to take place at the same time in the one country - that’s 13 cycling world championships in the space of 2 weeks.

Not only will this be a great festival of cycling to be enjoyed by Scots and international visitors alike, but it affords us an opportunity to use the profile of such a prestigious major event to drive beneficial changes around sustainable transport, active lifestyles, our environment and our economy.

We are proud that our approach and our strong track record allows us to punch above our weight and maintain our reputation as the perfect stage to host events.

By hosting the UCI in 2023, we will be building on our reputation as a country that is proud of its sport and its athletes and we will once again show the world that we are an outward facing, capable country that can deliver a welcoming and memorable experience for both competitors and visitors alike.

As we plan for the future of tourism in Scotland, I know that this might not necessarily be the immediate thoughts on you minds, particularly as we think about the coming year and the challenges it will bring, some of which I have touched upon today. It is vital that we continue to engage and face these together as an industry.

But I like to be optimistic and the coming year will also bring opportunities. We must grasp these and make the most of them, and show the world that Scotland remains an open and welcoming nation.

It is through yourselves that the sector thrives and makes progress but it is only by working together that we can ensure its future success.