Minutes of Meeting of the VisitScotland Board held on 1 May 2009

Transcription

1 Meeting Minutes Minutes of Meeting of the VisitScotland Board held on 1 May 2009 Present: Peter Lederer (Chairman) Paddy Crerar Willie Dunn Russel Griggs Brian Houston Alex Pagett Lesley Sawers In attendance: Minutes: Philip Riddle (Chief Executive) Malcolm Roughead (Director of Visitor Engagement) Ken Neilson (Director of Corporate Services) Riddell Graham (Director of Strategic Partnerships) Eddie Byers (Director of Business Engagement) David Anderson (Head of Human Resources) Lynne Raeside INTRODUCTION The Chairman welcomed Paddy Crerar to his first meeting. He also welcomed Board members to Cowan House, VisitScotland s new office in Inverness. PRESENTATION: TOURISM FRAMEWORK FOR CHANGE The Chairman welcomed Iain Herbert, Chief Executive of the Scottish Tourism Forum, to the meeting. IH gave a presentation on the review of the Tourism Framework for Change (TFFC). He explained that the aim of the review was to make the TFFC more business like and to move from strategy to action. The revised framework has identified three sources of growth: Customer experience Investment Marketing Underwriting all three areas is sustainability. In addition, accessibility and skills remain high on the agenda. With respect to skills, it has been recognised that there is a need to change the perception of the industry, moving the focus from front line, seasonal jobs to the other opportunities offered by the industry. The need to encourage people into the sector is growing as estimates suggest there will be a skills shortage of around 86,000 by 2017 as the numbers coming from European countries decline. Discussions are already being held about a Centre of Excellence to develop - 1 -

2 leadership and management skills. Proposals for this Centre are being developed by a separate group of senior tourism industry representatives. The next steps for the Tourism Framework for Change will involve the setting up of a leadership / steering group; commitment from the Scottish Government; development of a business plan; agreement on roles; building grass root support; and the establishment of trusted communications channels. In response to questions about the leadership initiative, IH confirmed that there would be no formal body created; rather existing channels and structures will be used to champion this project. The Steering Group will be fluid, with participation from individuals based on the issues being discussed / taken forward at a particular time. He also stressed that there would be a need for non-tourism industry involvement. It was noted that skills had been on the agenda for many years. However, lh explained that language is changing now and the focus is now on customer experience. Managers are now hiring people on the basis of their attitude and are then training them. Social networking is also having an influence on managers / proprietors as people do not wish to work for companies which are known for treating their staff badly. Discussion also focused around sources of investment. It was agreed that there needs to be a balance between central and local government and also private sector investment. The Chairman asked how delivery of the TFFC would be resourced. IH confirmed that project support might be required. Communications support will also be helpful. It was suggested that VisitScotland could support STF through secondment opportunities. It was also suggested that STF could carry out work on behalf of VisitScotland where that would be more cost effective and efficient. UPDATE ON SWINE FLU Riddell Graham (RG) updated the Board on VisitScotland s preparations in relation to a potential widespread outbreak of swine flu. He reported that VisitScotland already has plans in place which were drawn up in response to avian flu. A communications plan is now in place, being led by Head of Communications, Barbara Clark. Updates have been placed on visitscotland.org for businesses and on VisitScotland.com for visitors. VisitScotland has a direct line into the Scottish Government s Emergency Response Group. A meeting of the Scottish Tourism Emergency Response Group has been called. To date there has been no indication of cancellations but RG reported that the Indian Government had issued travel advice against travelling to the UK. The Board noted this update. 1. MINUTES OF MEETING HELD ON FRIDAY 13 MARCH 2009 The Board approved the minutes of the meeting held on Friday 13 March 2009 subject to the following change: - 2 -

3 On page six replace second paragraph under etourism Acquisition with: The PWC IFRS report indicates that there will be an asset worth 1.6m under IFRS accounting rules against a purchase cost of 1.25m. In a separate report PWC have estimated that the value to VisitScotland from the acquisition is between 4-7m. 2. MATTERS ARISING VisitScotland.com The Chief Executive reported that a guide on VisitScotland.com had been circulated for comment to the Audit Committee. A final version will be available at the June Board meeting. Progress Against Objectives RG reported that a report on KPIs will be available at each Board meeting, with a link to operational KPIs. Additional detail on activity will be provided in the Chief Executive s Overview of Key Developments. Sub-Committee Membership The following membership of Board sub-committees was proposed and approved: Audit Committee: Brian Houston (chairman until end of June), Russel Griggs (will take over as chairman in July), Dorothy Fenwick, Manus Fullerton (Peter Lederer to remain on until the end of the year to ensure continuity). Remuneration: Lesley Sawers, Paddy Crerar, Russel Griggs EventScotland: Lesley Sawers, Alex Pagett, Willie Dunn, Paddy Crerar, Dorothy Fenwick Highlands & Islands Convention: Manus Fullerton It was also agreed that seminars would be arranged for the Board on the following issues: Marketing Audit and governance EventScotland Governance of VisitScotland.com Ken Neilson (KN) reported that Tourco has now been disbanded and VisitScotland.com now reports directly to VisitScotland. VisitScotland.com will be retained as a separated entity for VAT purposes. It has its own Board which will report to the VisitScotland Board. Membership of the Board is as follows: Philip Riddle, Malcolm Roughead, Ken Neilson, Brian Houston and Willie Dunn. Property Matters The Board recorded its formal approval to retain a manned Abington VIC under a licence agreement of two years and nine months to 31 December 2011, with provision for termination by VisitScotland only at 31 December 2009 and Procurement - 3 -

4 The Board recorded its formal approval to tender for PR Services in North America. 3. CONFLICTS OF INTEREST Lesley Sawers (LS) registered an interest in Business Club Scotland, to be discussed under agenda item STRATEGY MEETING FOLLOW UP The Chief Executive gave a presentation following up on discussions held at the Board s Strategy Meeting. Political Environment It was recognised that there is a need to communicate a strong vision about the contribution that tourism makes to the economy of Scotland given the economic environment and the pressure to cut public spending. Tourism should be seen as a sector where investment will see strong returns. Local Authorities It was acknowledged that funding will continue to fall given pressures on local authority funding. VisitScotland needs to be in a position to manage this transition. Since the Strategy meeting, VisitScotland has held a meeting of the Chairman s COSLA Committee and a workshop with the Minister and local authorities. A local authority conference is also due to take place and plans are underway to hold a further workshop in June. VisitScotland and COSLA have agreed that they need to work together to present a solution on local authority funding. While this process is worked through, VisitScotland will have to continue to manage financial challenges and PR. The Chief Executive also reported that some local authorities are pushing the boundaries of legislation governing tourism promotion. It might be difficult for VisitScotland to work with local authorities if they are working ultra vires. Should any issues of this nature arise, they will be referred to the Audit Committee. Quality Assurance It was agreed that the scheme needs to reflect changing consumer trends. It should also incorporate an element of user generated content. It was acknowledged that there are two groups of businesses which will need to be particularly taken into account when developing the scheme: those who are wedded to the current scheme; and those who are keen to go further and build on the Gold scheme to establish Scotland s Best or equivalent. The current scheme provides reassurance but does not provide differentiation. The detail of a revised scheme is currently being discussed. This will include discussions on how best to incorporate user generated content into the rating system

5 Marketing The long-term objective of the marketing strategy is to protect the brand. However, there have been suggestions that VisitScotland should focus on shorter term products / promotions. The Board agreed that protection of the brand and short term promotions are necessary and it is a question of balance. Perfect Day is an excellent example of a tactical campaign, with a 1m campaign targeting the staycation market. Paddy Crerar (PC) noted that communication around the marketing strategy is paramount as many in the industry believe that VisitScotland s role should be sales rather than brand building. Alex Pagett (AP) asked how closely VisitScotland monitors protection of the brand in comparison to what other private sector companies are doing to protect the brand. MR confirmed that most private companies market corporately rather than promoting the destination brand. It was agreed in principle that marketing could be extended to non-quality assured properties. It was suggested that this change should be introduced by extending the reach to third party booking engines in the first instance. Russel Griggs (Prof RG) asked how VisitBritain s future will impact on VisitScotland. He noted that it would be important to consider this in our strategic planning for marketing. The Chief Executive confirmed that the existing model with VisitBritain works very well for VisitScotland. They act as a service company carrying all the brands of the four National Tourism Organisations. However, he noted that this model is being compromised as a result of lack of funding for VisitBritain. National Investment Plan Although this is not essentially part of VisitScotland s remit, it was agreed that VisitScotland should continue to progress the National Investment Plan with other partners. The Chief Executive reported that it has been difficult to get momentum but priorities have now been identified. The catalyst to delivery will be the investment bank. Work has been carried out with the Austrians and the proposal now needs to be scoped out in more detail. In response to questions about the involvement of local authorities, it was noted that VisitScotland has a good relationship with local authorities in respect of the National Investment Plan and this is a good basis from which to work. LS noted that local authorities are already discussing the possibility of investment banks for Edinburgh and Glasgow. Prof RG reported on his discussions during his recent visit to London. The view is that the development of an investment bank for Scottish tourism is a local issue and VisitScotland should be raising this proposal with banks locally. VisitScotland.com The Chief Executive reported that the site needs to strike a balance between providing inspirational information, providing a booking capability and meeting business needs. A number of issues will be considered as VisitScotland.com is developed including: Single content repository Web/ /face to face New look and feel (market research) New channels (social media; mobile) UGC/Polling/Click through measurement/charging - 5 -

6 Managing expectations/resourcing/strategic convergence A number of considerations will have to be taken into account: financial; PR; industry ambition; Tourism Framework for Change; and the Government Economic Strategy. The Board noted the update. 5. CORPORATE PLAN RG introduced the revised Corporate Plan which incorporates the changes made following the January Board meeting and subsequent individual meetings with Board members. This will now be presented to the Minister. The Board discussed the implications of the organisation s obligations under the Gaelic Language Plan. It was noted that a summary document will be presented to the June Board meeting. Action: Summary of VisitScotland obligations under the Gaelic Language Plan to be presented to June Board meeting. The Chairman questioned whether the financials should be included when funding has not been confirmed for future years. RG noted that this is accepted general practice. AP asked that it be made clear that the Purpose Targets referred to on page 8 are the Scottish Government s targets, not VisitScotland s. Subject to the above amendment, the Corporate Plan was approved. LS suggested that VisitScotland should consider a media briefing to present the plan externally. It was agreed that consideration would be given to this proposal. 6. COMPETITIVE ENVIRONMENT RG introduced the competitive environment paper which covers current market trends, competitor information and a review of key trends and drivers affecting tourism. This month s commentary focused on competitor activity in a time of economic uncertainty. Discussion centred around what competitors are doing in terms of supporting their tourism industries. It was noted that this information is being passed to Government via the weekly economic updates. Board members suggested that VisitScotland should make the case for additional money. While it was acknowledged that there is unlikely to be new money available, VisitScotland should make the case for reallocating existing money and doing things differently. This is particularly important given the importance given to tourism in the Government s Six Point Programme for Economic Recovery. The Board noted the report and agreed that communication around additional funding and support should be taken forward. 7. VISITSCOTLAND.COM - 6 -

7 The Chief Executive introduced a paper on VisitScotland.com which provided an overview of VisitScotland.com s operational performance for the period January 2009 to March It also updated the Board on the convergence project. The Chief Executive reported that revenue is in line with the operational plan. Costs are also in line with the plan with the exception of redundancy costs. Redundancy costs will be accrued into the previous year s accounts. The Chief Executive presented a summary of the convergence project action plan. The project is being led by Derrick Thomson who is responsible for coordinating the work of the various work streams. The Board noted the report. 8. EVENTSCOTLAND The Chief Executive introduced a paper updating the Board on EventScotland s activities. He noted that EventScotland will be more challenged by a widespread outbreak of swine flu if there is a move to Level Six as this leads to restrictions on large scale gatherings. The Chief Executive also reported on the meeting of the EventScotland Sub-Committee which had been held the previous day. An update was provided on the Gathering: 6500 passports have been sold and the focus is now on selling tickets for the Highland Games with assistance being provided by the VisitScotland Communications team. It was also reported that a bid for the Rugby World Cup now appears unlikely. LS reported that Business Club Scotland had now been established. Its first meeting was scheduled to take place in the first week in May. Protocols have been issued to the Advisory Group. To date there are 1300 members. LS noted that EventScotland has been very supportive. KN noted that although EventScotland appears to have overspent by 250,000, this overspend is from the Homecoming budget which runs over two years and is therefore not an issue. The Board agreed that the new format of report was an improvement on previous reports. More information on KPIs would, however, be welcomed. 9. CHIEF EXECUTIVE OVERVIEW OF KEY DEVELOPMENTS The Chief Executive introduced a paper outlining key developments since the last Board meeting, covering: economic overview, Homecoming Scotland, Scotland Week, China Visit (Launch of Scottish Prestige Golf Club), VisitScotland Expo, Scottish Parliament Economy, Energy & Tourism Committee, Perfect Day Campaign. He drew particular attention to the following: VisitScotland Expo - 7 -

8 Expo was a considerable success this year, with a significant increase in both international and UK buyers. Feedback from exhibitors was extremely positive, with all reporting good business. PC stressed the importance of the travel trade for the tourism industry. MR confirmed that working with the travel trade is a big priority for VisitScotland. VisitScotland communicates with the travel trade on a monthly basis, providing a platform for business to business opportunities. Edinburgh City Convention Bureau The Chief Executive presented a paper seeking approval for the withdrawal of VisitScotland from the Edinburgh Convention Bureau Limited. The Board approved this withdrawal. 10. QUALITY ASSURANCE - A NEW APPROACH Eddie Byers (EB) introduced a paper outlining a potential new approach to quality assurance. He explained that the proposed model had been put forward for consideration. It is built on consumer research, findings from industry workshops and input from staff briefings. It is recognised that there remains a need for consumer reassurance. However, the development of user generated content is having an impact on customer preferences and UGC will therefore be a key feature in the new model for QA. It is proposed that the new model will provide two core schemes: (i) (ii) to stimulate excellence to provide simple consumer reassurance UGC will drive the process while the advisor element will provide a spot check to provide reassurance. The revised scheme will be designed to stretch above 5 star and below 1 star. Businesses outwith the star system would be termed as working with VisitScotland. They would have to demonstrate that they are meeting legal requirements and would need to sign up to a Code of Conduct. Business advice will continue to be part of the scheme but the focus will be on new start businesses. The revised model, if adopted, would result in a reduction in costs of approximately 600,000. The aim would be to operate a scheme which is break-even for VisitScotland and which also results in a reduction in costs for businesses. Discussion followed on a number of points including: delivery of the scheme, the level of information provided and VisitScotland working with non-quality assured businesses. With regard to the level of information provided, it was suggested that the star rating should be supplemented with information which would show when the rating was achieved and what the requirements are for that particular rating. EB confirmed that provision of additional information would go through a process of market testing. PC noted that some businesses might have concerns about VisitScotland working with non-quality assured businesses. However, the Board - 8 -

9 agreed in principle that VisitScotland should be seeking ways to engage more widely with businesses. EB confirmed that the proposals contained in this paper would be developed further into a strategy which would be market tested. Input would be sought from partners and commercial modelling carried out. The timeframe for this process is early The Board noted the proposals. 11. NATIONAL TOURISM INVESTMENT PLAN RG introduced a paper updating the Board on progress to date in developing a national tourism investment plan. He reported that a first draft has been produced. It is consumer rather than destination led. The next step is to produce an action plan which identifies actions, responsibilities and timescales. BH agreed that the draft is a reasonable basis upon which to build but he expressed concern about the time it is taking to develop the Plan. There is a window of opportunity which could be missed if the Plan is not developed and implementation taken forward this year. BH also stressed that discussions on the Tourism Development Bank should not distract the organisation from taking forward the Investment Plan. He suggested that consideration be given to alternative funding routes such as Foundation Funding. He noted that tourism should be presented as being good for local communities and contributing to social regeneration. If a project contributes to social regeneration, that opens up additional sources of funding. The Chief Executive confirmed that this suggestion would be taken into discussions with VisitScotland s partners. RG also reported that a meeting had already been held with Social Investment Scotland and that this suggestion would be further explored. BH further noted that there is a wider planning dimension to the proposal. There are so many plans, e.g. TFFC, Single Outcome Agreements etc. The picture is becoming very complex. He asked at what point discussions could be commenced with developers and funders about projects. RG confirmed that initial discussions could likely commence later this year. The action plan is currently being developed and should be ready mid-june. AP noted that the Scottish Government appears to be supportive of the concept of the National Tourism Investment Plan. He asked how the operational obstacles could be overcome. RG reported that Loch Lomond and the Trossachs National Park has used the Investment Plan approach to develop its Plan and has now identified areas where they would be happy to approve development. Promoting examples of the Investment Plan being used in practice should help to overcome other operational obstacles. The Board noted the report. 12. SHARED SERVICES KN introduced a paper updating the Board on the shared services activities identified and currently being carried out by Corporate Services. He noted that these had been - 9 -

10 self-generated by VisitScotland, with opportunities being proactively sought. Financial data will be provided shortly to identify the savings that have been made. The Chairman asked whether the Scottish Government is pushing for even bigger projects. KN reported that there is a feeling that the shared services agenda right across the public sector is not moving quickly enough. The Board noted the update. 13. FINANCE PAPER KN introduced the Finance paper which updated the Board on: 2008 Year end accounts to Section 22 Report European Funding Programme Financial performance to 28 February 2009 and year end forecast etourism February results and Budget for 2009/10 Valuation and Accounting for the etourism acquisition VAT changes KN reported that etourism Limited now has an operating plan and a balanced budget. This will be presented to the Board at the next meeting. BH reported on the meeting of the Audit Committee which had been held the previous day. He reported that the Customer First project had received a completely clean audit report. He recorded congratulations to the team involved. BH further reported that following a number of improvements to internal processes, the Financial Controls Audit had produced an excellent result. He recorded congratulations to the Director of Corporate Services and the team. The Audit Committee also discussed the audit plan and integration of VisitScotland.com; IFRS reporting; the internal audit programme for VisitScotland Information Centres; and risk management. BH noted that considerable progress had been made on risk management but there is still a requirement for better consistency across the different risk reports. KN reported that the Grant-in-Aid letter has not yet been received from the Scottish Government. Discussions are still ongoing relating to the non-cash allocation. KN agreed to provide an update to the Board. Action: KN to provide update to Board. 14. PROCUREMENT KN introduced a paper seeking approval from the Board for:

11 award of contract for the provision of Internal Audit Services to Deloitte LLP for a three year period to a total contract value of 132,000, with the option to extend for two further periods of 12 months each; progression to tender for provision of Legal Services to the sum of 300,000 to 375,000; and progression to tender for provision of Network Communication Infrastructure Services to the sum of 720,000. The Board gave its approval. 15. CHAIRMAN S REPORT The Chairman introduced a report on his activities since the previous Board meeting. He drew particular attention to the following: VisitBritain / VisitEngland VisitEngland has now been established and is fully operational. It has a small budget but may try to secure additional funding through the Regional Development Agencies. VisitBritain has not yet appointed a Chief Executive. [Post-meeting note: Sandie Dawe has now been confirmed as Chief Executive of VisitBritain.] Leadership School AP, PC and the Chairman sit on the informal steering group for the school. Good progress is being made. Scottish Enterprise is funding a feasibility study. This is being carried out by Frontline and should be complete by the end of June. It was noted that good communications with the educational institutions will be an important part of the process. It was also noted that the Scottish Government has been very supportive. Expo The Chairman recorded his thanks to the whole team involved for an excellent show. The Chairman also recorded congratulations to the VisitScotland team for receiving the Hospitality Assured Award - Most Innovative Use of the HA Standard The Chairman reported that there are growing calls for a replacement for the Route Development Fund. While it is recognised that there may not be any additional funding, discussions are underway about strategy and planning. MR confirmed that Denise Hill, Head of International Marketing, is fully involved in these discussions. The Board noted the report. 16. CHIEF EXECUTIVE REPORT The Chief Executive introduced a report on his activities since the previous Board meeting. He drew particular attention to the following:

12 NTB CEO Meeting The CEOs discussed the NTOP strategy, discussions around a common platform for all the tourism agencies. The proposal is interesting as it would allow the sharing of data. However, there are legal and technical difficulties which will have to be resolved. At this stage, VisitScotland believes there are other priorities which require attention. The Board noted the report. 17. PROGRESS AGAINST OBJECTIVES The Chief Executive introduced a report on the organisation s progress against key corporate objectives. MR reported that VisitScotland has been shortlisted for six awards at the Marketing Society Awards. 18. ANY OTHER BUSINESS Sustainable Tourism RG reported that VisitScotland has had to withdraw the two European (ERDF) Projects relating to the Green Tourism Business Initiatives. VisitScotland remains fully committed to sustainability and is restructuring its Planning and Sustainability team to ensure continued support for the Sustainable Tourism Partnership. Freedom of Information Enquiry KN reported that copies of Internal Audit reports had been released following a Freedom of Information Enquiry. It was suggested that consideration should be given to releasing these reports proactively. Pension David Anderson (DA) reported that Wales has decided to re-apply to the BTB scheme. This might trigger the covenant. DA also reported that Richard Lamont is now on the Board of Trustees. Salaries DA reported that the salary submission has been sent to the Scottish Government. No feedback has been received to date