Thursday 12 January 2012

Major Change in VisitScotland Strategy?

It's one of those subjects that is guaranteed to now induce rapid progress into sleep for the vast majority of the hospitality sector in Scotland. It is somewhat tragically viewed as an increasing irrelevance to many businesses in the country and just lurches from one missed redesign and deadline to another.

However for those who are still awake, did you know that VisitScotland have formally confirmed the decision to remove direct on line bookings from their website. And that decision was confirmed at the Board meeting more than two months ago.

It must have been the Christmas period and the focus on repairing my storm damage so maybe is it was just me who missed the big public announcement indicating this major change in strategic direction by VisitScotland? I'm sure there must have been a big press hullaballoo about it somewhere and that our wonderful investigative press have uncovered who's going to take the heat for the unsustainable strategy in the first place.

You missed it too did you?

Well here it is, the big announcement confirming a change of strategy after a decade of mis-direction - and all in a single sentence. Midway through the report from the Director of Corporate Services at the November Board meeting this was announced;

"He also reported that in respect of concerns around state aid the decision has been taken to remove the on line direct booking functionality from the site. While this will result in a loss of revenue, it is envisaged that this will be replaced with new revenue streams from the new website. A briefing paper will be provided to the Board in due course."

(Now already it seems that there is some clarification necessary on the above minuted statement.  During a conversation with the director of the VS Digital Media team we were told that the removal was not for "state aid" reasons but for strategic reasons. However until we're told otherwise it is "officially" for the reasons printed. See at the foot of this article for more)

For those who haven't been involved in this whole process over the past ten years it may just be another one of those issues but we think it's a lot more than just another "typical" cock up - it is a shedload of public money that has been consistently spent with little or no consideration given to those criticising it. Various bodies have indicated throughout that period that what VisitScotland were doing was anti competitive and breaking EC legislation and that it would impact on the sustainability of other distribution channels such as tour operators, agents and even destination websites.

VisitScotland and their partners continued regardless with the strategy of trying to become a world class online sales channel offering world class one-stop-shop online booking functionality. It was never going to be a reality but they carried on regardless of the oft stated and clearly legitimate concerns, creating a new Public Private Partnership to manage and develop the project - and get round some of the competition worries.

And then when that failed and lost millions the project was taken back in house again with a new Digital Marketing team overseeing it as part of a wholly public sector project.

We have continued to raise the issues since the new Digital team were appointed but the responses until now remained dismissive and a host of unanswered questions just float around regarding the strategy and the ability to implement on time on budget and still without due regard to competitive positions.

The fact that large scale tourism portals may actually have had their day is just not a consideration for VisitScotland's team. It is they who should be found first in the search engines, it is they who should be publishing destination websites, it is they who should be shaping the online message.There are many better qualified than we are who would highlight the folly of such a strategy particularly when public resources are tight.

What astonishes us most  is that this announcement has just slipped under the radar. VS may argue that this is not news but it has never been formally stated anywhere that we can before this announcement to the board that this was the strategy. It was certainly under discussion but had never been verified.

Is it right that a disastrous strategy nurtured over ten years which continued to feed the industry with the myth that VisitScotland had a (lead) role in online sales should be consigned to history with a single sentence from Corporate Services that the party's over?

This strategy, it can be readily argued, has impacted, at least in part, on the Scottish private sector's ability to develop new systems and distribution channels of its own. It has undoubtedly kept software developers from competing to create online solutions of their own for Scotland's hospitality sector and for others has fragmented the market impacting on their potential for growth.

For small web developers across the country the linked strategy of developing subsidised "Web in a Box" websites with online reservations built in has displaced business from north to south, east to west. For hoteliers using the system they have been caught in a spiders web of poor software functionality and no upgrading of systems and poor support.

If Scotland is seeking to encourage (inward) investment and as the First Minister said last week creative industries then perhaps the public sector should desist from getting involved in areas where the private sector are perfectly capable of producing better results.

It may just sound like an indignant rant at this point but there are serious issues of corporate responsibility in place here and it reflects no good at all on the Board, the senior executives and indeed the Scottish Government that this major long term strategic investment is to be written off quietly and off stage.

I am pretty certain that this will be continue to be played down by the key players as just part of the progression of strategy and that the changes were always going to happen. Such platitudes may actually satisfy many in the sector but perhaps we should be stepping up the pressure a little more in light of the closure of another disastrous foray by the public sector into private market places. Anyone remember Homecoming? When is it going to filter through to politicians that the hospitality sector would operate more effectively and efficiently with less intervention and less of a share of already scarce public funds.

The overall digital project has a full time in house team and is also working with external consultants on a project that simply doesn't add value. They talk jargon of the investment being justified because of "market failure". The search for market failure shouldn't take long to identify.

As for the simple act of communications when were they going to get around to announcing this new direction? No opportunities since the Board meeting? What about over ninety articles in two newsletters from the Chief Executive's office and a New year statement from the Chairman?

We have page long press releases for a Disney Movie, or the World Cross Country championships but nothing anywhere on the ditching of a key element of a multi-million pound public sector project. Are our press and politicians awake?

The current digital strategy has many similar areas within it that can and do raise similar concerns and the list of public tenders and expenditure going against it must surely now be put under independent scrutiny. We understand that at the time of writing the tender offer to North West England company New Mind to provide Destination Management software and services has yet to be signed - project date was June 2011.

In the current climate the justification for carrying on with these levels of expenditure in areas where failure has become systemic must surely be questioned by someone in power.

Or then again perhaps not.


Ahead of publishing the article above we sought clarification from VisitScotland on the key premise and were advised of the following.

  • It was stated the the decision to stop online direct sales is not related to State Aid but is strategic.
  • The decision "to stop online direct sales" will not happen for a further "eighteen months"
  • The current software contract (with Tiscover) for online sales ends in April.
  • Once the Tiscover contract comes to an end VisitScotland will provide ongoing direct online sales through a replacement extranet service on the same basis as the current model.
  • That in line with this time period VisitScotland will continue to offer a limited web service through the Web in a Box project. More details from VisitScotland.
  • VisitScotland have a timeline for the integration of accommodation providers own online reservations systems into to commence at the beginning of April with integration into the VisitScotland channels by the middle of May.
  • The costs of using their own choice of booking engine is still being finalised but will be offered as one of the services at the renewal date for website entries later this calendar year.
Any questions or comments?


Anonymous said...

I hope the newspapers pick up on this. Not only were huge amounts of public (tourism) money spent on and its various iterations but the cynical side of me remembers that Gongs were awarded to VS staff based on services to Marketing.
Nothing short of a full public enquiry is needed.

Anonymous said...

"While this will result in a loss of revenue, it is envisaged that this will be replaced with new revenue streams from the new website"
When will they learn??? The people at the top of the VS tree are just a bunch of jokers. One thing for certain is that they are very good at spending our money without ever having to justify or account for it.

Anonymous said...

This should now signal the end of VS. Its easy to blame the staff and the "gongs" (like that anon) but we have had so many politicians involved over the past 10 years who prove that their only concern is soundbites. Lets see their likes start to distance themsleves if the press do get involved. said...

It's not just UK taxpayers' money being mis-spent, it's EU taxpayers' money too, which is being channelled to support VisitScotland though the European Regional Development Fund.

What's perverse about this, is the funding's being used to support anti-competitive activity that breaches EU Competition Law.

The one sanction the European Union has to bring an end to this nonsense is to claw back the funding, leaving Scottish taxpayers to foot the bill for the folly of the Scottish Government they voted into office.