THE main theme of this month’s Business Bulletin is tourism.
It is a very important industry in Scotland as a whole, although much less so in the North-east.
It is difficult to estimate accurately the value of the tourism industry.
VisitScotland (previously known as the Scottish Tourist Board) has estimated that it is worth over £11billion a year and provides about 250,000 jobs but those numbers are too high.
Overseas visitors account for about 30% of the total and domestic (mainly English and Scottish) 70%.
I estimate that the net output of the Scottish tourist industry is currently about 6% of the national GDP total but only 2.5% in the North-east.
The term “net” requires a little explanation because the official statistics ignore the fact that many Scots spend holidays overseas but that expenditure is not covered.
The Scottish and UK statistics treat tourism as an export, because it attracts foreign revenue, but unfortunately do not treat our foreign holidays as equivalent to imports.
The importance of tourism in the North-east has undoubtedly declined over the last few decades, in direct contrast with the growth in the oil and gas industry.
The best – or worst – indicator of that is undoubtedly hotel and other accommodation prices, particularly in the Aberdeen area.
As local prices have rocketed, the numbers of visitors have fallen – not surprisingly, given the cost differences compared with competing regions such as Tayside and the Highlands and Islands.
Business tourism has been increasingly important and the AECC has played a valuable role in attracting conferences and exhibitions.
Oil industry visitors have been a very important market.
The North-east economy is currently dominated by the oil and gas industry, which has undoubtedly been of great benefit, as demonstrated by the much higher than average incomes and very low unemployment.
However, it has definitely had adverse impacts on other local industries including tourism because of the big increases in labour and other costs.
I believe that the North Sea oil and gas industry will decline significantly over the next few years.
If so, there will therefore be opportunities for tourism and other local industries to revitalise themselves.
The physical attractions obviously remain as they have been for a long time; Balmoral, the Aberdeenshire coastal villages, Cairngorms National Park, Old Aberdeen, whisky distilleries, ski centres. I do not think there is much need to invest in new visitor attractions.
There have obviously been improvements in the hotel and other accommodation stock, notably in the Aberdeen area.
The challenge, then, is for the hotel sector to adjust to the declining demand from the oil industry and provide better value for money for tourists.
That will not be easy but I believe can be done.
VisitScotland and VisitAberdeen have good reputations and skills.
If they can develop an effective strategy with Aberdeenshire and Aberdeen City councils, the Chamber of Commerce and other bodies, then I am confident that we shall see a resurgence of tourism in the North-east.
The visitors will not spend as much money as oil industry workers but will provide a long term market.