After years of industry criticism and mounting losses the VisitScotland.com website is being taken into public ownership ... but is it too little too late?
By Peter John Meiklem

For Dumfries and Galloway bed and breakfast operator Alan Keith, last week's announcement that tourism website VisitScotland.com is to be taken into public ownership was something of a personal victory Keith has campaigned long and hard against the public/private website which he believes "hijacked" business from small tourism operators and "completely failed" to sell Scotland as a destination to potential visitors considering a holiday in the country.

To Keith, and the other tourism operators who have campaigned against VisitScotland.com since its creation in 2002, last week's announcement is a tacit acknowledgement that the business model VisitScotland has championed for its partner website VisitScotland.com for six years has been a failure.

Says Keith: "The real tragedy about all this is if VisitScotland had listened to us when they started out, then all of this could have been avoided. People weren't just saying it wouldn't work, they were providing evidence. VisitScotland has never listened to the grass roots of the organisation, and I hope that will change after this."

VisitScotland.com's business model is based on directing tourists from the website - frequently the first port of call for potential visitors across the world - to a centralised call centre in Livingston to make accommodation bookings. This costs the visitor an additional 10%. Although the dedication and professionalism of the staff has been widely acknowledged, the site was pilloried in a recent parliamentary report and branded "patently flawed and obsolete".

Keith argues that because VisitScotland.com was privately run, customers were directed to its call centres, when often they would have rather booked with the individual accommodation provider. He says this harmed small businesses in Scotland and was off-putting to potential visitors who wanted to find out more about what Scottish tourism had to offer, rather than being directed to a call centre for the hard sell treatment.

Keith hopes the decision by VisitScotland to take charge of the website will lead to more direct bookings between tourists and accommodation providers and greater input from such providers into the way the website operates.

VisitScotland.com is run by holding company Etourism Ltd. This company is a partnership between Austrian travel firm Tiscover, French IT company Atos Origin, VisitScotland and UK government investment vehicle Partnerships UK. Currently, VisitScotland owns 36% of Etourism's shares and if the proposed deal goes ahead (it will not be finalised until December 1) VisitScotland will give £1.25 million of taxpayers' money to buy out its three partners.

According to VisitScotland chief executive Philip Riddle, the deal will place the website completely in the public-sector tourism organisation's control, which is essential for future strategic planning. The deal will also write off the company's remaining £6m in debts (other substantial debts have already been written off) because they are largely owed to the three partners, Riddle argues.

However, Keith believes the deal is not as good as it seems. For although it comes with the benefit of debt write-off, he argues that it means the £1.8m public-sector investment made in the project in 2002 will also be written off, meaning the salvage operation will cost the taxpayer more than £3m when interest on the initial investment is brought into the equation.

And that's not counting the financial damage VisitScotland.com has made to many small Scottish businesses, plus opportunity cost of its over-extended life, Keith argues.

Although there is a widespread recognition that the site dramatically improved after changes in its technology platform and format last April, frustrations have not entirely disappeared.

Frank Buckley, who runs the tourism company Highland Holidays in Gairloch and Kinlochewe on the west coast, says the site is extremely difficult to navigate and has made mistakes that could have cost Scottish businesses thousands. He claims tourists using service provider AOL were, for a period, unable to use the site for technical reasons. He also says at one point last year the site claimed every campsite in Scotland was fully booked, when there were, in fact, many spaces.

Says Buckley: "Everyone had complaints about navigating the site - it is a total nightmare. It needed to make money to justify its existence, which it never did. Hopefully, the foundations are now there to make a great website, one that simply tells the story of Scotland."

John Farquhar Munro, LibDem MSP for Ross, Skye and Inverness West, adds: "Bringing VisitScotland.com under public ownership I believe will be welcomed with some relief by all those who are committed to promoting tourism in Scotland. Many tourist businesses from small hotels to B&Bs and caravan parks have lost a great deal of business at the hands of Visitscotland.com due to a catalogue of problems with the website."

He adds: "My greatest criticism of Visitscotland.com was their inability to respond to the complaints which caused so many problems for tourists and tourist operators. Now they have been bought they will become accountable and hopefully far more responsive to the needs of tourism which is a vital part of the Highlands and Islands economy."

VisitScotland's decision to stick with VisitScotland.com's failing business model for so long has provoked further questions about the judgement of its highly paid senior management. Although Riddle's critics come short of calling for his resignation they demand to know why - when Etourism has never turned a profit and VisitScotland.com has attracted fierce industry criticism since its inception - it has taken so long for substantial steps to be taken to fix it. Riddle has been accused of squandering much industry goodwill by sticking by the failing model for so long.

Helen Eadie, Labour MSP for Dunfermline East, says there is now serious pressure on VisitScotland to make the website work properly in a tight time frame.

She says: "People want to know how inclusive the new website will be, how easy it will be to access individual accommodation and to make bookings. It is critical that they get it right. In the past, people have worked hard to improve it but they have just not made it work. They need to redouble their efforts."

However, Riddle denies there was anything particularly wrong with the VisitScotland.com site when it was created in 2002. He says: "I never said the model was flawed. The original model is just now out-of-date. I think it was the right one to go for at the time. Customer behaviour has now changed considerably. One of the things we have discovered is that consumers don't limit themselves to just a few websites, as was thought at the time. People have also developed an aversion to call centres."

Riddle argues the public/private structure of VisitScotland.com, an innovation of the then enterprise minister Wendy Alexander, makes it "too difficult to be flexible" and to react to changing consumer demand, which is why VisitScotland has decided to act now. However, VisitScotland.com's critics point to its rapidly escalating debts - last year alone amounting to £1.3m - and suggest that despite the marketing spin surrounding the announcement of the change, the state agency had little choice but to step in.

Riddle stresses the deal is still not finished and refuses to commit himself to any particular strategy. He says VisitScotland may decide to keep Etourism as an individual company or may amalgamate it into the overall VisitScotland structure. He says the organisation will not be looking for extra cash but will fund the acquisition out of its current budget, largely through delaying repairs to tourism information centres.

However, it is clear from reforms already made to the site that VisitScotland wishes to make it easier for tourists to book directly with tourism businesses. Riddle offers no guarantees on staff numbers but points out the net headcount in the Livingston call centre has reduced from over 60 to around 40 this year, showing there has already been a change of direction.

Riddle still robustly defends the website's record: "It is a very popular site and I would say a successful one. Some businesses have done very well out of VisitScotland.com. It brought it £65m last year so somebody is making very good business out of it but it has been difficult to keep everyone happy."