Page last updated at 12:21 GMT, Thursday, 14 May 2009 13:21 UK

Tourism website losses criticised

VisitScotland webite
The committee said few people who visited the site made bookings on it

Tourism body VisitScotland has been criticised by a Scottish Government committee for its management of a loss-making online bookings website.

A Public Audit committee report said the site had made cumulative losses of £12.4m in its first five years.

It was predicted the site would make a £1.5m yearly profit after five years in operation.

The involvement of several other shareholders limited VisitScotland's power to make changes, the report said.

But the committee was "concerned" by the tourism body's failure to act more quickly once the losses became evident.

The MSPs were also "disappointed" to find no external financial advice was taken before VisitScotland entered into partnerships with private sector investors.

We did not go into the venture to make a profit, rather we invested because we needed a tourism website
Philip Riddle

The committee said it thought "it might have been possible for VisitScotland to secure its initial aims at a smaller cost to the public purse by adopting a different approach at the outset."

VisitScotland chief executive Philip Riddle told the committee £4m was invested by the tourism body overall, including an initial sum of £1.85m.

Mr Riddle told the MSPs he believed the website had worked "extremely well".

"We did not go into the venture to make a profit, rather we invested because we needed a tourism website," he said.

But the committee's report added that "under questioning, he acknowledged that they had overestimated the industry's appetite for online booking systems.

"Although the site had a high number of visitors, the conversion rate into actual bookings was low."

The MSPs concluded: "The fact is that it failed to deliver the expected income set out in the business case.

"In that regard at least, the venture clearly cannot be said to have worked well."

The committee said it believed a new, "robust" business plan, including aims, financial forecasts, and means of monitoring progress, should be compiled and presented to MSPs.

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