Tourism internet site loses £4m of taxpayers’ cash
SCOTLAND’S official tourism body was mauled by MSPs yesterday after it was revealed it had lost £4million of public money on a failed website.
A damning Holyrood Audit Committee report said VisitScotland.com had made cumulative losses of £12.4million in its first five years, despite predictions it would make a £1.5million-a-year profit after that time.
The involvement of several other shareholders, including private firm E-Tourism, which set up and operated the system, limited VisitScotland’s power to make changes, the report said.
But the committee was “concerned” by the tourism body’s failure to act more quickly once the losses became evident.
The MSPs were also “disappointed” to find no external financial advice was taken before VisitScotland entered into partnerships with private sector investors.
They said it thought “it might have been possible for VisitScotland to secure its initial aims at less cost to the public purse by adopting a different approach at the outset”.
‘We did not set it up for a profit, but because we needed a tourism website' Technology
VisitScotland chief executive Philip Riddle told the committee £4million was invested by the tourism body overall, including an initial sum of £1.85million.
Mr Riddle told the MSPs he believed the website had worked “extremely well”.
“We did not go into the venture to make a profit, rather we invested because we needed a tourism website,” he said.
But the committee’s report added that “under questioning, he acknowledged that they had overestimated the industry’s appetite for online booking systems”.
“Although the site had a high number of visitors, the conversion rate into actual bookings was low,” he conceded.
The investigating MSPs concluded: “The fact is that it failed to deliver the expected income set out in the business case.
“In that regard at least, the venture clearly cannot be said to have worked well.”
The committee said it believed a new, “robust” business plan, including aims, financial forecasts, and means of monitoring progress, should be compiled and presented to MSPs.
The troubled VisitScotland.com website was relaunched last April with a target of helping to boost visitor numbers to the country by up to 50 per cent after provoking criticism from hotel and bed and breakfast operators.
At one stage, the site was boycotted by the sector because members refused to pay high commission charges.
A VisitScotland spokeswoman said: “Although the venture did not generate the anticipated turnover, VisitScotland.com has been a success, bringing £65million and over half a million bookings to tourism businesses since its launch in 2002.
“When VisitScotland.com was originally developed, consumer trends pointed towards increased online bookings and a desire for a one-stop shop.
“But trends and technology have changed significantly in recent years. There is less demand for the one-stop-shop.”
