Road to COP26: reimagining tourism

Scotland is, in many ways, the story of the expansion of international tourism in the early years of the 21st century.

In the pre-Covid era, the country had become a global tourist destination in its own right.

Scottish Enterprise – Scotland’s national economic development agency – reported that, in 2019 alone, the country welcomed around 3.5 million international overnight visitors, in addition to 13.8m overnight domestic visitors from Scotland and elsewhere in Great Britain.

Total visitor spend was £11.5 billion – not bad for a small country with a population of just under 5.5 million.

8.4% of Scotland’s companies operated in the tourism space, and the sector supported almost 230,000 jobs.

But there are now serious challenges facing the sector, which must adapt to the social and legislative changes brought by climate change, the sustainability movement and the Covid-19 pandemic.

1. Covid, and its legacy
International tourist visits to Scotland fell off a cliff almost overnight in March 2020.

Whilst there was some respite in summer 2020 for many rural and coastal tourism businesses, in particular hotels and self-catering accommodation such as Airbnb properties, as Brits sought space in Scotland’s countryside and beaches, that surge in visitor numbers didn’t bleed through to Scotland’s cities.

This was welcome news for some locals. The Guardian reported a resident as saying “I’d fallen out of love with Edinburgh. Lockdown has changed that. Every day, something lifts me up: the view from Arthur’s Seat, lying in the sun on Calton Hill, biking to Portobello, the evening light.”

But it was eye-wateringly painful for Scotland’s tourism businesses and their employees. An industry survey by the Scottish Tourism Emergency Response Group reported that more than half of all businesses had lost up to £50,000 – with more than 6% of respondents claiming to have lost more than £1m. Of those businesses employing staff, 76% of respondents reported a reduction in staff numbers, with 35% stating they had made redundancies and 69% putting staff on furlough. Almost two thirds said they didn’t employ staff that they normally would.

Whilst the UK’s vaccination programme has, by any measure, been one of the world’s most successful, 2021 will still be a tricky year for the tourism industry. Lack of certainty as to when social distancing requirements will be fully lifted in Scotland, lingering fears of a third Covid wave, and consequent unavailability of events insurance for promoters, has led to a number of key tourism landmarks, such as the world-famous Royal Highland Show, music festivals and The Enchanted Forest at Pitlochry’s Faskally Wood, being cancelled for the second year in a row.

This August the Edinburgh International Festival will stage a scaled-back outdoor programme. And Underbelly’s famous upside-down purple cow, the “Udderbelly”, which is usually a fixture in Edinburgh’s George Square as part of the city’s annual Fringe festival, is this year instead taking up residence in West London with a promise to replicate the “best of the Edinburgh Festival” in the UK capital.

The worry for Scotland’s cultural community, of course, is that short-term solutions like these start to become permanent.

There are similar stories across the UK and the world. Hotels in London, for example, normally teeming with leisure and business travellers, recorded an occupancy rate of only 28.6%, and revenue per available room (a key industry statistic) of just £19.23, in April this year according to data company STR. And New York City’s Mayor, Bill de Blasio, signed an executive order in May suspending the city’s hotel room occupancy tax for this summer to try to help kickstart NYC’s ailing hotel industry.

2. Climate change
In just one year – 2019 – Scotland saw 636,000 visitors from the USA, contributing over £717m to the Scottish economy.

China has also been an important target for Scotland’s tourism industry. The Edinburgh Tourism Action Group’s “China Ready” initiative saw Chinese visitors grow from 100,000 in 2014 to 200,000 in 2019.

Scotland’s governing party, the Scottish National Party, had pledged to cut Air Passenger Duty (APD) – which is charged on each passenger on flights departing from the UK – by 50% to help drive international visitor numbers to Scotland. However, critics pointed out that this APD reduction would increase CO2 emissions from aviation in Scotland by at least 60,000 tonnes. When Scotland’s First Minister, Nicola Sturgeon, declared a global climate emergency in April 2019, it became inevitable that the pledge would be abandoned. The pledge was duly scrapped in May 2019 and remains abandoned.

The global airline industry has been hard hit by the pandemic. The industry’s chief lobby group, the International Air Transport Association – says that carriers are set to lose around $48 billion in 2021. And even once Covid is a distant memory, the regulatory framework for the air travel industry is likely to be less benign. In April 2021, French MPs voted to suspend domestic airline flights on routes that can be travelled by direct train in less than two and a half hours – part of a series of climate and environmental measures being introduced in the country.

Gordon Dewar, Edinburgh Airport’s chief executive, warned in April that, in the absence of urgent government support, Scotland will support fewer direct routes in the future and will see its global influence wane. He said: “This is not just about the narrow interests of Edinburgh Airport – it is about the social and economic benefits that come to us all from a thriving system of airports and airlines, connecting people and goods and services with the world beyond our shores and forging enduring cultural and educational connections.”

3. Overtourism
A key wake-up call for Scotland’s tourism industry was a 2018 article by CNN which put the Isle of Skye at the top of a list of “12 destinations travelers might want to avoid in 2018”. It said: “In 2017, the infrastructure of Scotland’s largest island creaked under the pressure as thousands of tourists in coaches and cars plied its narrow lanes, making a beeline for the remote fairy pools at Glenbrittle, the iconic sunset spot at Elgol and the rocky Old Man of Storr, with traffic snarl ups an inevitable result.

Eventually the residents of beautiful Skye said enough was enough after complaints of noise, overcrowding and even visitors urinating in public. Police advised visitors to stay away unless they had already booked places to stay.”

Edinburgh’s Cockburn Association was formed on 15 June 1875 to resist the removal of trees at Bruntsfield Links, one of the capital’s popular green spaces. It has expanded its remit over the decades and is now a leading campaigner against what it sees as overtourism in Edinburgh’s streets.

It believes that “the climate emergency, public health and the legacy from pre-pandemic inequality [mean] that ‘rebuilding’ should not mean resetting the clock to 2019”. It argues, for example, that “exponential growth” in unregulated short-term let accommodation has “hollowed out the city centre, displacing permanent residents and replacing them with holiday guests and party flats”.

It says that increasing tourism numbers have harmed Edinburgh’s essential character and that while Covid has changed economies, attitudes and ways of living, “what endures is the quality of Edinburgh as a place, its landscapes, its buildings, its institutions, its uniqueness. These must be the foundations on which to build our future: that future must be more green, more inclusive and more inspired by conservation than Edinburgh was in 2019”.

So, there are many challenges for tourist industries in Scotland and around the world.
Are there solutions?

1. Let the train take the strain
VisitScotland published a fascinating trends paper in February 2020. The paper was overshadowed somewhat by the onset of the pandemic, but is worth revisiting as the tourism sector reopens.

VisitScotland flag that travellers are now looking for smart ways to reduce their carbon footprint, and point to the increasing popularity of rail travel as an alternative to short haul flights. Longer times to get to and from holiday destinations by land and sea become a part of the experience, with travel becoming something to be Instagrammed rather than endured. In Sweden, they call it “Tågskryt”, which loosely translates into English as “train brag”: the idea that people encourage others to travel by train, not plane, by posting pictures from their rail trips online.

The International Rail Journal points out that, after going out of fashion in Europe in the mid-2010s, night trains have made a “stunning return to favour”. Across the continent, gaps left by state-owned operators have allowed private operators to step in and offer their own sleeper services.

Good examples are Czech private operator RagioJet, which has launched a summer overnight service between the Czech Republic and Rijeka on the Croatian coast, and Belgian company Moonlight Express, which has announced plans to start a night train connecting Brussels, Liege and Berlin in April 2022. Louis De Jaegar, one of the entrepreneurs behind Moonlight Express, says: “The train offers a great alternative for people who want to travel with a clear conscience. Instead of competing purely on speed or price for transport from A to B, we focus on affordable and quality travel time.”

Mirroring the trend in mainland Europe, the UK’s Caledonian Sleeper service, which connects London with Scotland, saw the introduction of a brand new train fleet in April 2019 promising a more luxurious experience aimed at both business and leisure travellers. And the Scottish Government are pressing for new connections for the Caledonian Sleeper in London to boost direct tourism from the rest of Europe – although logistical challenges in linking St Pancras International Railway Station with the UK’s domestic train network make this far from straightforward.

The Covid-triggered widespread move to mass remote-working by formerly office-based staff has led many to question whether business travel will ever again reach pre-Covid levels. This could be both a plus and a minus for tourist travel: a plus, in that it could open up more capacity for leisure travel; and a minus, in that the effect could be to make recreational travel more expensive, given that business class travellers have historically subsidised their leisure counterparts.

2. The rise of the digital nomad
Although remote-working has not been pain-free, most employers were pleasantly surprised by the ability of their workforce to survive, and indeed often thrive, away from the office environment. Savills believe we are likely to see a rise in “digital corporate nomads” – employees who combine working with personal travel – and an associated increase in “bleisure” (a blending of leisure and corporate travel).

London, for example, with its wide range of coworking spaces and accommodation options, diverse population of almost 9 million including plenty of entrepenurs and creatives to work with, distinct neighbourhoods and an arguably unrivalled mix of tourist attractions, is hoping to attract visits from many of the new generation of international digital nomads.

Savills predict that this will allow the hotels sector to pivot its offering to appeal to both corporate and leisure demand.

They also note that increasing regulation of Airbnb and short-term rentals around the world also gives rise to opportunities for hotels to capture some of the longer-stay corporate/leisure market.

3. Sustainable tourism

Sustainable tourism is often talked about but often not well understood. VisitScotland’s trends paper describes it succinctly as follows:
“Sustainability should present balance between protecting the natural environment, economic growth and retaining vibrant social communities and cultural identities”.

At its most basic level, it requires tourists to engage with and support the communities living in the places they visit.

So, for example, for hillwalkers, it means abandoning the mindset of driving to a mountain, eating a home-made packed lunch at the top, dropping rubbish on the way back down, and driving home again. A sustainable version might involve travel by public transport, an overnight stay in a local b&b, hostel or hotel, and giving custom to local restaurants and pubs – as well as the hill climb itself.

VisitScotland also point to the increasing success of destinations that demonstrate their green credentials. Many modern travellers are keen to visit projects that preserve culture or the environment – as it enables them to “give something back” to the destinations.

Over-tourism concerns can also be overcome by widening the seasonality and footprint of tourism.

For example, The City of Edinburgh Council has acknowledged that more of the city should share the economic benefits of tourism, and is investing in projects like the redevelopment of the Granton coastline to better spread visitors around the capital. In the west of Scotland, there has been private and public investment in Inverclyde, an area rich in shipbuilding heritage, to develop ambitious tourism initiatives such as a new 200m floating cruise jetty and dedicated terminal for cruise passengers.

And the organisers of Push The Boat Out – Edinburgh’s new poetry festival – have chosen to run the event in October, rather than the peak August month, to help spread visitor numbers to the capital out across the year.

Amsterdam and the Netherlands also offer good examples of initiatives to combat overtourism concerns. – the Netherlands’ official website – includes a list of dos and don’ts to help visitors enjoy the country’s famous lush coloured tulip fields. Tourist officials in Amsterdam have developed a “Discover the City” app which sends visitors notifications to warn when an attraction is busy and suggest alternatives. Meantime, Zaandvoort, 18 miles from the city centre, was renamed Amsterdam Beach to wider the city’s tourist footprint and alleviate visitor pressures in the city’s historic centre.

Here in Scotland, 2020 was due to be our Year of Coasts and Waters: a year that would spotlight, celebrate and promote opportunities to experience and enjoy Scotland’s coasts and waters, and encourage responsible engagement and participation. The virus put paid to much of the plans for last year, but the Scottish Government has rolled over the celebratory year into 2021.

4. Hame’ll dae me
Last, but not least, curbs on international travel led many to rediscover their own countries in 2020.

It’s a trend that is set to continue in the post-Covid world, and one that tourist bodies across the globe are keen to encourage.

Savills flag that countries such as Germany and the UK are well-positioned to take advantage of this renewed focus on staycations. As well as having high shares of domestic travellers as a proportion of total visitors (79.3% and 74.4% respectively for Germany and the UK in 2019), pre-Covid both countries were also the two largest suppliers of outbound travellers in Europe: ripe for conversion to domestic tourism.

Tourism will recover post-Covid. The history of humankind has ever been a desire to travel and enjoy new experiences.

But the difference is that we are now in an era where awareness of carbon footprint plays large in many travellers’ minds. We are entering an era of sustainable and transformational tourism. Businesses operating in the tourism space will need to adapt their businesses, and their consumer-facing conversations, accordingly.

As VisitScotland’s trends paper wisely concludes:
“Change, as they say, is the only true constant.”

Our Road to COP26 Reimagined series looks ahead and anticipates the issues and opportunities that climate change presents across a number of sectors and areas that impact our clients.

At CMS, we put our clients’ world at the heart of what we do. For this reason, we have a team of lawyers from across the firm from a range of different expertise areas who are actively engaging with the issues and opportunities that climate change presents. Our aim is to help our clients to navigate this rapidly evolving legal and commercial landscape whilst also providing the interested with more information about this growing area via this Insight section.

Our world reimagined, to put sustainability at the heart of everything we do.

This Law-Now is part of our Road to COP26 series. We will be analysing and reporting on the implications of these events for the agenda at COP – look out for further updates on our legal insight on our climate change and sustainability pages.