Impact of the macro environment: An examination of the economic propensity of UK regional markets for tourism to Scotland

Abstract

Forecasting UK domestic tourists to Scotland is never an exact science, but in order to see into the future it is important to understand the correlation between economic performance and tourism revenues. In order to do this, VisitScotland, the national tourism agency for Scotland, uses econometrics (the Moffat model). VisitScotland is pro-jecting a robust performance for UK tourism in Scotland up to 2008, based upon a stable housing market, a tight labour market and low interest rates. Therefore Scottish tourism domestic revenues should rise from £4.1bn in 2005 to £4.4bn in 2008 in terms of real expenditure (excluding inflation). This paper sets out to explain this forecast. The forecasts are based upon economic conditions and represent the opportunity for tourism; they do not account for shocks such as 9/11 or extreme weather conditions. Such projections are used as a guide to the future, rather than the exact future.