Evaluation of Economic and Tourism Impact of the North Coast 500 FINAL 20 9 2019 Prepared for: David Whiteford, Chairman, North Highland Initiative, Harbour Terrace, Wick, Caithness, KW1 5HB Submitted by: Moffat Centre for Travel and Tourism Business Development Glasgow Caledonian University, Glasgow, G4 0BA Tel. +44(0)141 331 8405 Mobile: +44(0)7976 569368 Email. [email protected] Contents 1.0 Aims ................................................................................................................... 4 1.1 Content and Approach ................................................................................... 4 1.2 Methodology .................................................................................................... 6 1.3 Limitations of Methodology ............................................................................. 6 1.4 Response Rates ................................................................................................. 8 2.0 Results .............................................................................................................. 11 2.2 Accommodation ............................................................................................ 11 2.3 Visitor Attractions ............................................................................................ 14 2.4 Other Tourism Related Businesses ................................................................. 17 2.4 Other Tourism Related Indicators .................................................................. 18 2.4 Traffic Indicators ............................................................................................. 19 2.5 Web and Social Media Traffic ....................................................................... 24 3. 0 Understanding Economic Impact of the NC 500 ......................................... 30 3.2 Calculating Route Impacts ............................................................................ 34 1 Executive Summary The North Coast 500 has been Scotland’s most successful route development generating significant destination awareness and major economic benefits for the North of Scotland. In 2018, the NC 500 generated an additional £13.46 m in sales for businesses on or near the route. The route has driven additional sales and visitors to accommodation, attraction, activity and retail businesses on the route. The NC 500 generated some £22.89m in Gross Value Added (GVA) for the year 2018 and created circa 179 full time equivalent jobs in the North of Scotland. It is estimated there are some 1,900 businesses on or near the route and the survey and some 380 were contacted as part of a stratified and representative sample. Data was also derived from the Scottish Accommodation Occupancy Survey, the Scottish Visitor Attraction Monitor, Transport Scotland road counters and tourism data derived from VisitScotland data at a regional and national level. The base line for longitudinal analysis was 2014 (given that the route was launched in 2015) and measurement continued until 2018 (the last year when complete data sets were available. In the critical accommodation sector room occupancy increased from; 52% (2014) to 78% (2018),with similar growth evident in average room rates achieved; £46 (2014) to £82 (2018). Interestingly, quality of accommodation has also improved over the period 2014-2018 with 3, 4 and 5 Star quality (equivalent) accounting for 44% in 2014 and rising to 62% in 2018. In the visitor attraction sector over the period 2014-2018, there has been a 19.9% increase in visitation in free admission attractions and a 41.7% increase in visitation in paid admission attractions. This provides an aggregate growth of 29.3% admission across the years 2014-2018. 2 In other tourism related businesses, which included: activity providers, tour operators, retailers, car and camper van rental, hospitality etc. a year on year growth of circa 16% was recorded from 2014-2018 with the majority of the sample recognising the significance of tourism consumers. Traffic indicators reaffirm the increased levels of visitation across the route. Similarly, web and social traffic evidenced significant interest across websites, Facebook and the NC500 App. Similarly, the coverage in traditional print media has been exceptional across newspapers, magazines, terrestrial and satellite TV. 3 1.0 Aims The aim is to provide an analysis of quantitative and qualitative impacts of the NC 500 touring route on the host economy of the North Highlands of Scotland. 1.1 Content and Approach The study takes cognisance of the University of Glasgow, North Coast 500 Economic Baseline Report (2017), however this also incorporated a visitor / user survey which this report does not. Importantly, the University of Glasgow (UG) survey identifies the baseline as 2015; however, this was the year of the NC 500 launch (which was in fact May 2015) and accordingly cannot provide a pre-NC500 perspective and accordingly should not have been considered as a baseline. It is more accurate to consider data since 2014 (using that year as the baseline) as this study has done. This report does however consider data such as: Accommodation occupancy and rates Visitor Attraction admission and revenue Visitor activity centres ; revenue and numbers of consumers Length of stay and dwell time indicators Employment generation; full time, part-time, seasonal Relevant Retail expenditure (where identifiable) 4 Value of commercial tourism business / property sales New business development and inward investment (that can be linked to NC 500) Car and Motorhome hire trends since 2014 Relevant web/ social media and press coverage achieved Expenditure data available in any of the sectors considered Transport data Gross Value Added and Employment Generation 5 1.2 Methodology The Moffat Centre has many years of experience and a proven track record of effective, practical industry facing research. Our work on the collation of visitor attraction national statistics for Scotland, England, Wales and Northern Ireland has spanned almost two decades. This has given us unprecedented understanding of visitor flows, expenditure, product development and performance of the sector. This is particularly true of Scotland, where we have continuous data since 1999 with a response rate to our data requests of circa 85%. The Moffat Centre now also undertakes the Scottish Accommodation Occupancy survey that looks at all forms of accommodation expenditure and enables us to overlay accommodation performance on visitor surveys, attraction performance and output. These data sources provided foundation information on which to build the NC 500 survey. 1.3 Limitations of Methodology The NC 500 has been the subject of a number of surveys and measurement and this particular survey was undertaken during the busy summer season of 2019. Furthermore, the nature of the data sought such as; sales performance, occupancy and rates achieved, were for many businesses seen as commercially valuable and sensitive. In addition, many of these businesses are classed as micro-businesses and are characterised by very limited record keeping. Accordingly, understanding of medium term impacts across the period 2014-2018 was a major challenge of; timing, commercial confidentiality and data availability. Whilst the NC500 officially commences in Inverness, data for the Highland capital has been deliberately omitted, since it would distort overall performance indicators. Isolating NC500 impacts from the general urban tourism performance of Inverness would be extremely complicated and methodologically difficult to calculate and justify. Inverness undoubtedly has benefitted from the NC 6 500 but isolating this impact from other visitation would require a distinct survey of supply indicators across a representative sample of accommodation, attraction, activity and other tourism related businesses. It would also be appropriate to sample demand in the form of visitors to various tourism products in order to isolate motivation which could be partial as well as complete. A further complication arises from the macro-environment and the extent to which the most recently proposed data for leaving the European Union (31 October 2019) is influencing international (and particularly European tourists to visit). This is further reinforced by other Brexit impacts including the movement in currency exchange rates between UK Sterling and other major currencies (such as the Euro and US$) creating a strong value offer that may contribute to or catalyse visitation. It is estimated that there are 1,900 tourism related businesses on or near the route of the NC 500 (this is calculated based on a corridor around the route of circa 10 miles either side where landscape allows). Of these some 380 (20%) were contacted. This sample was representative of the range of tourism (and other) businesses on the route and included: accommodation, activities, attractions, vehicle hire and retail (where a significant proportion of purchases could be accredited to visitor markets). Some 300 businesses responded giving a response rate of 78.9% with useable data for the period of examination (baseline 2014). The sample providing data constituted 19% of the estimated 1,900 businesses on the route. However, responses were self-selecting rather than the result of random selection yet the mix of business type in the response ensured representativeness by sector as detailed below. 7 1.4 Response Rates In total, some 380 NC 500 businesses were