Minutes of Meeting of the VisitScotland Board held on 7 August 2009

Transcription

1 Meeting Minutes Minutes of Meeting of the VisitScotland Board held on 7 August 2009 Present: In attendance: Minutes: Apologies: Peter Lederer (Chairman) Stephen Carter Paddy Crerar Willie Dunn Dorothy Fenwick Russel Griggs Alex Pagett Lesley Sawers Philip Riddle (Chief Executive) Malcolm Roughead (Director of Visitor Engagement) Riddell Graham (Director of Strategic Partnerships) David Anderson (Head of Human Resources) Ken Neilson (Director of Corporate Services) Lynne Raeside Eddie Byers (Director of Business Engagement) WELCOME AND INTRODUCTION 1. The Chairman welcomed Stephen Carter and Dorothy Fenwick to their first Board meeting. MINUTES OF MEETING HELD ON FRIDAY 19 JUNE The Board approved the minutes of the meeting held on Friday 19 June 2009 subject to the following changes: Paragraph 9: add to the existing paragraph the very specific question on the timescale for the convergence project. Paragraph 17: clarify in the existing paragraph that Board members were seeking information on departmental costs in order to obtain a better feel for how each area of the business is performing. Paragraph 23: clarify that information about the future is particularly helpful in relation to short term marketing. Paragraph 44: clarify that the 2m savings which have been achieved are the result of work across the whole organisation

2 MATTERS ARISING Bench Report 3. Riddell Graham (RG) confirmed that VisitScotland can buy into the Bench report. He noted, however, that this particular study focuses on hotels and predominantly on the cities. The rural picture is not therefore included. He asked whether the Board would wish VisitScotland to pursue this option. 4. Paddy Crerar (PC) suggested that there are other ways of obtaining information. He suggested that VisitScotland could approach hotel groups rather than individual hotel managers and ask them to provide information on forecasts. He suggested that a tool such as Survey Monkey could be used to analyse the information in a confidential way. 5. RG noted that VisitScotland already buys into the LJ Forecaster for Edinburgh and Glasgow and is currently in discussions to expand this. He also reported that a review of corporate research is currently underway within VisitScotland. Some of the research currently undertaken is done as a statutory requirement,.e.g. UKTS and IPS. 6. RG expressed concern about using Survey Monkey, as this tool would require exactly the same sample to be used on each occasion in order to obtain meaningful data. The Chief Executive also reported that there are some issues around obtaining information for the LJ Forecaster as some hotel chains are saying they are unable to provide the information because it would be anti-competitive / antitrust. The Chairman acknowledged that if the hotels are listed companies there may be a problem. However, it should be possible to overcome this depending on the way the information is reported back. Alex Pagett (AP) noted that listed companies do provide information to analysts and agreed that the issue is about what information is requested and how it is reported. 7. PC suggested that a recognised organisation such as VisitScotland would be trusted to receive this information and report on it in such a way that would not breach confidentiality. Remuneration Committee 8. David Anderson (DA) reported on the meeting of the Remuneration Committee which had been held the previous day. The main subject of the meeting was the delay to the Chief Executive s compensation agreement. 9. AP sought clarification on the role of Board members in relation to decisions taken by the Remuneration Committee. DA confirmed that the Board has delegated authority to the Remuneration Committee to take decisions on behalf of the Board. The Committee is asked to approve the Chief Executive s remuneration and is also invited to note recommendations relating to Directors remuneration and more general remuneration issues. Where any contentious issues arise, the Remuneration Committee would raise these at a full Board meeting for comment

3 10. Given that the full Board does have responsibility for decisions approved by the Remuneration Committee, it was agreed that recommendations should be circulated to the full Board for information. 11. Dorothy Fenwick (DF) asked whether it would be possible to have a map of the lines of governance for Board members so that it is made clear what goes to the full Board and where authority is delegated to sub-committees. Action: map of governance lines to be provided to the Board. Inverness VIC 12. PC reported that concerns are being raised locally about expenditure on VICs. This point was noted. Meeting with Minister 13. It was reported that a date had been set for the meeting with the Minister and details would be circulated to Board members shortly. Given that the meeting with the Minister would focus on strategy, the Board had a discussion about future strategy and agreed to build on this discussion at the next Board meeting. CONFLICTS OF INTEREST 14. Lesley Sawers (LS) registered an interest in Business Club Scotland and the Chairman registered an interest in the Ryder Cup. PROGRESS AGAINST OBJECTIVES 15. The Chief Executive introduced the Progress Against Objectives paper which provides a report on progress against key performance indicators to date. He reported that the Management Team is comfortable with progress to date. 16. DF noted that it is not possible to read across all KPIs to identify whether the organisation is on target to meet the KPI. RG explained that some of the KPIs are only measured annually and it is therefore difficult to provide a clear view of progress. The decision was taken to show progress on some of the ongoing indicators which feed into the final KPI. DF asked whether it would be possible to have a report on whether the organisation is anticipating being on target. The Chairman confirmed that individual Directors would be providing verbal updates to support the written report. 17. Malcolm Roughead (MR) reported that the marketing teams are already well on track to achieve the UK & Ireland marketing targets. The Winter White campaign had generated 63.5m additional revenue, equating to more than two-thirds of the full year target. Similarly, the BTU is on track to achieve its yearly target with 36.5m of business enquiries generated to date. Of that, 21m are from North America; 11m from the UK; and the remainder from Europe

4 18. MR noted that visitor footfall to VisitScotland Information Centres (VICs) is currently performing well, standing at 2.3m against a yearly target of 4.5m. However, performance is varying significantly across the country. The transactional value has increased to 77p per head. However, although retail income is likely to be up, the target of average spend per head might not be achieved because of the actual increase in visitor numbers. 19. PC asked for an indication on industry income and for clarification on what industry income covers. The Chief Executive explained that industry income covers income from Quality Assurance products and marketing opportunities. It does not include local authority income or net retail income. The Chief Executive confirmed that income is ahead of the same period in the previous year. 20. PC asked whether Business Relationship Managers are incentivised. The Chief Executive explained that they are subject to the same performance management system as all staff, although their objectives are more quantitative. He also noted that industry has fed back that VisitScotland is too commercial and consideration is now being given to a change in approach, with BRMs taking on more of an advisory role. 21. PC and Stephen Carter (SC) suggested that many businesses would not share the view that VisitScotland is too commercial. They expressed concern about the cultural attitudes of some businesses. The Chief Executive noted that the move from membership to businesses selecting their own opportunities had not been universally popular. Many businesses do not like being sold to, although it has been acknowledged that it may be the choice of products which needs to be reviewed and such a review is underway. 22. The Board noted this report. KEY PERFORMANCE INDICATORS OUTPUT REPORT 23. RG introduced a paper reporting on achievement against targets contained in the Corporate Plan. He explained that this report had been delayed to allow final analysis to be carried out. 24. Professor Russel Griggs (Prof RG) sought clarification on the KPI relating to the QA schemes. He suggested that in the light of forthcoming changes to the QA scheme, this KPI should no longer be valid. The Chief Executive confirmed that the KPI report refers to KPIs for For this year the KPI is to maintain participation levels at the same level during the transition phase. There will then be an opportunity to change the KPI as appropriate. 25. Prof RG asked whether the KPIs are developing the right behaviours to allow the organisation to achieve its goals. The Chief Executive confirmed that they are based on making a contribution to the economy. He acknowledged that they may need to change if there were any change to the organisation s core purpose

5 26. PC sought clarification on the reduction in accommodation participants. He asked whether one of the reasons might be a lack of engagement with VisitScotland. The Chief Executive noted that the report identified lack of engagement as a potential issue, with reference made to perceived value. He also noted that while Scotland is believed to have the best QA scheme in the world, the role of QA schemes in the world has changed. This is why changes are being made to the QA scheme. 27. DF sought clarification on the industry income KPI and asked why it had not been changed to reflect the changing economic circumstances. The Chief Executive explained that KPIs are intended to influence behaviour and there was a desire to ensure that there remained a drive for sales. He noted that a KPI would only be changed if there were a wish to change behaviour. 28. The Board noted the report. COMPETITIVE ENVIRONMENT 29. RG introduced the competitive environment paper which provides an update on trends in Scotland and across the globe. He provided a verbal update on a number of issues: (i) business tourism is performing well; (ii) although visitor numbers and spend are down slightly, domestic tourism is outperforming the rest of the UK, with an increase in nights; and the visitor attraction sector is reporting a 2.5% increase in visitor numbers overall during the first six months of 2009, with both Historic Scotland and the National Trust for Scotland reporting healthy increases both in visitor numbers and income. 30. RG drew Board members attention to the discussion paper on Ireland. The Chairman commented that the situation in Ireland showed quite clearly that focusing on the capital city alone had not resulted in success for the rest of the country. He noted that this should provide Edinburgh with a clear lesson. 31. In response to a question from DF, RG confirmed that the information contained within this paper is published on visitscotland.org and regular reports are provided via the e-update. 32. Willie Dunn (WD) asked whether the fall in Ireland was due to the introduction of a departure tax or whether there were other reasons. The Chief Executive reported that analysis of the figures would suggest that the tax is not the only reason for the fall. 33. PC noted that this paper demonstrates there is a big opportunity for Scottish tourism, capitalising on the huge UK market which has previously gone to Ireland. 34. The Board noted the report. VISITSCOTLAND.COM 35. The Chief Executive introduced a paper updating the Board on the operational performance of VisitScotland.com. He reported that the venture is expected to - 5 -

6 move into profit shortly. Numbers for the web, the contact centre and VICs are ahead of plan. The surplus will help pay for the changes which are planned for the venture. 36. The Chief Executive also led a discussion on the convergence project. He noted that the vision is for a quite different approach to the previous one, with greater linkages directly from customers to businesses. 37. The aim is to consolidate content and move it into coordinated stores. Once this is complete, VisitScotland will have the best accumulation of content about Scotland in the country and this will be accessible to all. The content strategy is also considering how best to introduce user generated content and business generated content. Given that the aim is to have a content rich site, there will be a need to rely on businesses to serve the site. 38. The channel management strategy shows the move away from booking. The telephone number is being removed from the home page, from print and from footers. This move will take place progressively. The impact on staff will be minimal as they will be moved into different roles. DF asked how VisitScotland.com would reach people who are not linked to the web and AP asked whether there was any insight into the market which might not be reached. The Chief Executive confirmed that it is an older, diminishing market. PC reported that one of the companies he is involved with had removed the telephone number from advertising material but had reintroduced it as its removal had had a negative impact. The Chief Executive acknowledged that the removal would be phased and VisitScotland would be monitoring the impact. If it is felt that removal has had a negative impact the telephone number can be reinstated quickly. 39. PC asked about the level of traffic. The Chief Executive reported that VisitScotland.com currently receives around s per week. The central facility is not being phased out but businesses will be invited to take enquiries directly rather than enquiries coming via the Contact Centre. 40. The Chairman asked about implementation of the changes in respect of printed material. MR confirmed that the changes are in line with the print strategy. He noted that and online activity is not only cheaper but it also adds to data capture. He suggested that had been under-utilised in the past. 41. WD asked whether consideration had been given to online chat services such as those operated by Delta. The Chief Executive confirmed that VisitScotland is interested in exploring this type of approach, although does not think there is a future in social networks for this kind of activity as research has suggested that people using social networking sites do not want to be sold to. At this stage the organisation is more interested in exploring some type of instant messaging. 42. The starting point for the technology strategy is content. Currently VisitScotland uses three main systems. The view is that the needs of the venture moving forward could be met with upgrades to two of these systems. This still needs to be - 6 -

7 tested. One might be used for web based data and the other will be used for the remainder. Hardware still has to be upgraded. 43. The Chief Executive reported that a statistics package is also being explored so that in future there will be an ability to report back on various levels of information, thereby facilitating aspects of commercialisation. 44. Consideration is also being given to a Destination Management System. Functionality needs to be considered, in particular the introduction of a polling engine. VisitBritain is also moving to a new system which may be one option, although this might lead to a loss of control. 45. The Chief Executive reported that the initial costs to upgrade technology are estimated at between 600,000 and 700,000. The aim is to meet these costs from the surplus generated through the venture. 46. The Chief Executive noted that one issue that still requires to be resolved is validation. Although expertise exists internally, it is felt that external validation would be useful given the importance and scale of this initiative. The Chief Executive has been taking soundings from external companies and has identified some useful leads. 47. Commercialisation is likely to come through listings, page views and click throughs. The issue of State Aids still requires to be considered. A final submission has been made which will commit VisitScotland to discontinuing with online booking. This will be implemented on a phased basis, with the move to other booking systems being gradual to ensure that all businesses have a booking facility available to them. The State Aids submission also addresses issues around quality assurance, with a commitment being made to the introduction of statutory minimum levels to allow wider participation. 48. VisitScotland will also need to consider restrictions to ensure that other public bodies comply with State Aid rules. This could impact on our relationship with local authorities and Destination Management organisations which might have booking engines. 49. The Chief Executive also reported that we are considering recruiting an experienced e-business expert at Directors level who will work across the whole organisation. The post holder will have both a technology and an information role and will be charged with getting the best from new media developments across the whole organisation. PC welcomed this. 50. Communication with the industry continues. An industry workshop is planned for 19 August and regular articles are being published in the eupdate. Prof RG noted that there is a short time frame in which to get the convergence right. He stressed the need to pick up on the positivity currently surrounding the project. The Chief Executive reported that a programme of ongoing communication was underway. When the new home page was launched an was sent to 9000 industry contacts inviting their views. Workshops will be held and a representative group - 7 -

8 has been established to allow VisitScotland to seek views from a cross section of industry representatives. Feedback is also being received from the Scottish Tourism Forum. Action: provide a note of the communication programme to date and planned. 51. DF asked whether the budget / costs required approval at this stage. The Chief Executive noted that these figures were for information at this stage as costs had not yet been finalised. DF suggested it would be useful to have an update and timeline against most of the elements. The Chief Executive reported that current estimates stand at 18 months, the timeline being driven primarily by the European tendering process. EVENTSCOTLAND 52. The Chairman introduced a report on EventScotland s activity and reported on the meeting of the EventScotland sub-committee held the previous day. He reported that events are recording good attendance. Scotland is establishing itself well as a very competitive events destination. It was noted that having a clear calendar of events was useful in terms of attracting people to a destination. 53. The Chairman reported that EventScotland is focusing on the legacy of the Commonwealth Games and its management. The team is working to ensure that no opportunities are missed. 54. The Board noted the report. CHIEF EXECUTIVE OVERVIEW OF KEY DEVELOPMENTS 55. The Chief Executive introduced a report on key developments since the last Board meeting, covering: Homecoming Scotland, Swine Flu, Growth Fund, Perfect Biking Marketing Campaign, Perfect Settings Marketing Campaign, Winter White Campaign Results, Local Marketing Activity, General Marketing Update, Investment Plan and Development Bank, Destination Management Organisations, Scottish Parliament Public Audit Committee, and VisitScotland / COSLA Workshop. 56. The Chief Executive drew particular attention to the Investment Plan and Development Bank. He reported on a useful meeting with the banks, although he expressed disappointment that the banks had not been as forthcoming as had been hoped. A strawman has now been developed. Although there is no appetite for a full scale Austrian style Bank, the aspiration remains to move towards this in the longer term. Discussions are planned with Social Investment Scotland, with the aim of using / capitalising on their experience in middle range investment. The objective is to get money moving to small and medium tourism businesses. 57. PC asked how the Tourism Development Bank would differ from any other bank. The Chief Executive explained that the main difference would be the term / length of loan. The cost of financing will also differ. He also noted that the success of the Austrian model was the expertise that had been developed in respect of picking winners. The Tourism Development Bank would also develop such expertise. The - 8 -

9 Tourism Development Bank would provide the equivalent of a kitemark which would unlock funding by reducing risk. 58. SC noted that accommodation businesses can already receive longer terms for loans, e.g. 15 years. 59. DF suggested that one of the aims might be about turning bankers attention to the viability of tourism businesses as an investment. Over time bankers would realise that the risk of investment is not significant. The Chief Executive confirmed that this would be exactly one of the aims. Feedback suggests that the tourism industry is not considered as an attractive investment. He also noted that there is a need to help reduce the risk to the banks. One way would be to introduce Government guarantees. 60. The Chief Executive also drew attention to the Scottish Parliament Public Audit Committee. He reported that the Scottish Government has raised similar concerns about the process and it is hoped that a resolution will be found shortly. 61. The Chairman reported on the COSLA workshop. He noted that it had been a useful session. A number of actions were agreed: (i) COSLA and VisitScotland are to explore how cross-boundary agreements could work; (ii) an evaluation / framework process is to be agreed by SOLACE and COSLA; (iii) COSLA is to revisit and redraft the COSLA Chairman s Committee; (iv) VisitScotland and COSLA are to work up a business case to present to the Minister. 62. RG reported that attendance had been good. He also noted that SOLACE had come to the fore and VisitScotland plans to increase its engagement with this group. 63. The Chairman suggested that VisitScotland should engage with all 32 councils and consideration should be given to changing the focus of the Chairman s tours to meetings with Councils. 64. PC asked whether a press release had been issued following the meeting to report on the positive discussions. RG noted that a press release would only be issued if there was something concrete to say. PC stressed the need to use the local media and suggested that meetings with individual local authorities should lead to press activity where possible. The Chairman noted that he did meet with local media contacts during the Chairman s tour programme. 65. The Board noted the report. GAELIC LANGUAGE PLAN 66. RG introduced a paper seeking approval from the Board of the draft VisitScotland Gaelic Language Plan. He noted that following approval, the draft would be issued for public consultation. 67. The Chairman asked that a note be kept of how much this process is costing

10 68. The Board approved the draft Gaelic Language Plan. FINANCE PAPER 69. KN introduced the Finance Paper, covering the annual accounts; VisitScotland Financial performance to 30 June 2009; etourism financial performance to 30 June 2009; and European funding programme He drew particular attention to the annual accounts. He reported that the auditors are currently considering the draft accounts. The acquisition of VisitScotland.com might lead to a surplus in accounting terms, depending on how the acquisition is treated. This might lead to a Section 22 Report. Accordingly VisitScotland might go directly to Audit Scotland to address this issue rather than asking the auditors to address it. 71. Prof RG noted the need for careful handling of the release of the accounts to ensure that the media fully understand the position. 72. The Board noted the report. PROCUREMENT PAPER 73. KN introduced the procurement paper, seeking Board approval to: a. progress to tender for provision of Stand Build Services for Business Tourism Exhibitions to the sum of 360,000; b. progress to tender for provision of Stand Build Services for UK trade exhibitions to the sum of 330,000; and c. award contract for the provision of legal services to Biggart Baillie LLP for a 36 month period to a total contract value of 375,000, with the option to extend for two further periods of 12 months each. 74. DF asked why the contract for legal services was for 36 months. KN explained that anything more than 36 months would require Scottish Government approval, thereby extending the timeframe required to appoint. Similarly, given that a European tendering process can take between seven and eight months, a shorter contract period is not cost effective. 75. PC accepted this explanation but stressed the need to review all contracts. MR confirmed that a review is carried out against performance metrics and this includes price against expertise. There is a standard six month termination clause which allows VisitScotland to end a contract. 76. AP asked what had happened with the Scottish Village. MR explained that it is used in a modular way at different events. The Chairman asked whether it could be used to satisfy the needs of the Business Tourism Unit or trade exhibitions. MR explained that the needs were different and this would not be possible. 77. The Board approved the paper

11 PROPERTY MATTERS 78. KN introduced a paper seeking Board approval for the following: a. to enter into an agreement with Historic Scotland to continue occupancy of Abbey House for a maximum period of two years and nine months to 29 March 2012; b. to enter into an agreement with Scottish Borders Council to co-locate within enlarged premises in Peebles incorporating the current location for a three year term from 1 April 2010 to 31 March 2013; and c. to enter into agreements for the early surrender of the lease at the best market price available and the transfer of information services provision to the CalMac office within Tobermory. 79. Prof RG expressed concern about the co-location in Peebles. MR shared his concerns but explained that there was no alternative, viable option. 80. KN explained that there are occasions when papers require approval outwith the Board meeting timetable. Requests for approval by are therefore issued. One such paper will be issued shortly. The Chairman accepted the need for this process but asked that it be kept to a minimum and asked that explanations be provided. 81. The Board approved the paper. CHAIRMAN S REPORT 82. The Chairman introduced a report on his activities since the previous Board meeting. He drew particular attention to the following: 83. Who s Marketing Scotland Dinner: The Chairman reported that the Culture Minister is trying to encourage bodies to be more joined up. He is proposing to use Canada as an example of having just one person working for various organisations. The issue is that the skills required by each organisation are different. The Chairs of the NDPBs are working on a paper to outline how the organisations can work together better. The first meeting will be held in September. 84. VisitBritain Meeting: The Chairman reported that VisitBritain is facing significant challenges but the new Chief Executive is taking a new approach which seems extremely positive. He noted that there remain issues around NTOP which could potentially cause problems. 85. Chair s Appointment: the Chairman reported that the appointment round will start shortly

12 CHIEF EXECUTIVE S REPORT 86. The Chief Executive introduced a report on his activities since the previous Board meeting. He drew particular attention to the Scottish Parliament Economy Committee evidence session. He noted that the session had gone well. ANY OTHER BUSINESS 87. The Chairman reported that Audit Scotland is conducting a survey of Board members of NDPBs. He circulated a paper outlining the scope of the survey. 88. The Chairman tabled a copy of the VisitBritain accounts. 89. The Chairman confirmed that the marketing seminar would be held on 24 September (this seminar was subsequently changed to the EventScotland seminar) and potential dates for the remaining seminars would be circulated