20 September 2007

Golf and whiskey – pomegranates and lemons

By Eric Jansson
Published by Financial Times, 20 September 2007

Perhaps golf and whisky should not mix with business. That they frequently do is a boon to Scotland’s business tourism industry.

Business trips, many of them international, yield more than a fifth of overall tourism receipts north of the border, according to a survey commissioned collectively by Britain’s national tourist boards. The published figure for 2006 was £911m, but because business trips so often generate leisure tourism activity the real total is almost certainly higher.

Fabled courses to play, legendary distilleries to tour and “exclusive use” castles that can be rented for corporate events help keep demand high, official promoters say.

Accordingly, Scotland punches well above its weight in this area. Edinburgh last year hosted more international association meetings than any other small city in the world, according to the International Congress and Convention Association (ICCA). Such meetings are the tourism industry’s biggest money spinners, luring delegates by the thousand, typically outspending leisure tourists by more than a factor of two.

Yet in a sector that witnessed 11 per cent growth last year worldwide, Scotland conspicuously lacks capacity, and the market shows signs of strain. Higher capacity markets such as Vienna and Paris, Europe’s top destinations for association meetings, ably absorb extra volume; they registered growth of 12 per cent and 30 per cent respectively in 2006. Scotland and other British markets saw comparatively minor increases.

“A lot of markets are growing faster. We cannot afford to be complacent,” says Caroline Packman, head of the business tourism unit at the national tourist board, VisitScotland. Author of a rebranding effort under the slogan “Scotland means business”, she adds that a long-term effort to preserve and boost competitiveness is underway.

A £1bn wave of private and public investment currently underway should help. Scotland’s leading conference and exhibition centres, the city-owned Edinburgh International Conference Centre (EICC) and Scottish Exhibition and Conference Centre (SECC) in Glasgow, plan dramatic additions worth a combined £142m. Other prime venues such as Gleneagles, the Perthshire hotel and golf resort that hosted the G8 Summit in 2005, and the Old Course Hotel in St Andrews are expanding or upgrading, too.

The EICC’s plans carry a particular sense of urgency. Opened in 1995, the innovative space plugged a gap in the capital’s conferencing market, where previously “the only places to go were hotel ballrooms,” says Sandy Pearson, marketing manager. Twelve years later, after counting 1.5m delegate days – the conferencing industry’s equivalent of hotel overnights – the 1,200-seat centre sees loyal clients outgrowing its space.

Expanding in the middle of Edinburgh’s financial district has proved difficult. Plans to break ground earlier this year broke down when Cala-AWG, a construction company, suddenly backed out citing higher than expected costs. Ms Pearson says the move came “totally out of the blue”, frustrating EICC executives. Last week, they sent fresh recommendations to Edinburgh city council, requesting consent for essentially identical expansion plans.

By contrast, nearby Glasgow boasts ample capacity for big events. The facility’s five big halls and iconic 3000-seat Clyde Auditorium, known locally as “the Armadillo”, generate reliable profits. Yet with the SECC operating at 70 per cent capacity, Mr Closier sees room to grow, as demand spills over from crowded markets elsewhere.

“We get people who have tried to put on a conference in London. They come up here and say it is a breath of fresh air,” Mr Closier says.

His planned addition – with designs by architects Foster & Partners, funding and planning consent all in hand – will be Scotland’s largest arena. Due for completion by 2011, it promises to offset demand for concert space in existing SECC buildings while providing a new sporting venue for the Commonwealth Games in 2014, for which Glasgow is a candidate city.

The Commonwealth Games, though not directly impacting business tourism, could also help the industry by adding hotel rooms, Mr Closier says. For big events, scarce accommodation has sometimes caused problems, as in 2005 when 14,000 members of the European Respiratory Society descended upon Glasgow. Some participants required bussing to and from hotels in St Andrews, 82 miles away, says Mrs Packman.

Additional flexibility could be provided in the form of a high-speed rail line between Glasgow and Edinburgh. Such a link would cut travel time from the current 50 minutes to as few as 12, says Laura Gordon, director of the publicly-funded Glasgow-Edinburgh Collaboration Project.

Sceptics of collaboration include Mr Closier, who notes the contrasting natures of medieval Edinburgh and modern, “rebellious” Glasgow. He warns against “trying to make a pomegranate out of an apple and a lemon”.

But Ms Gordon argues that Scotland’s distinctive markets must embrace intercity collaboration as an internationally proven model for the industry. Successes in Copenhagen and Malmö, Germany’s Rhine-Ruhr region and other markets could show the way forward for Edinburgh and Glasgow, she says.

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