Companies lose millions as G8 benefits fail to show


EXPECTED benefits from the G8 summit at Gleneagles failed to materialise, partly because tourists thought Scotland was effectively "closed" as it tackled violent demonstrations.

While tourism and leisure facilities witnessed a tail-off in trade, numerous contracts were also placed outwith Scotland, leaving contractors and service providers empty-handed.

The then Deputy First Minister Jim Wallace said on announcing Gleneagles as the G8 venue in June 2004: "We and the enterprise bodies will be working very closely with all the business organisations to secure the maximum economic benefits for Scotland from the summit."

But Scotland appears to have had little benefit, with one estimate suggesting that lost business together with the added costs of staging the summit could amount to £100m.

Philip Riddle, chief executive of VisitScotland, admitted: "There was a definite dip in visitor numbers on the seasonal norm around the time of the G8, most likely because visitors thought Scotland was 'closed,' and concerns about images of demonstrations and violence in Scotland.

"However, VisitScotland has monitored media coverage around the world and there has been much positive exposure for Scotland to counterbalance any negative impressions."

Ros Sutherland, senior lecturer in hospitality, tourism and leisure at Napier University, believes Scottish hotels would have preferred the G8 to have been held during an off-peak period.

And Eva McDiarmid, chief executive of the Association of Scottish Visitor Attractions, (ASVA), said: "Numbers for July were very bad, down 6.6% like-for-like in the Scottish Enterprise area compared to July 2004, with Edinburgh Castle down 12.8%. Stirling Castle, the Falkirk Wheel, Bannockburn were all seriously affected and G8 was undoubtedly the major factor. Edinburgh and the Stirling/Perthshire areas were badly affected.

"On admission prices alone, that equates to lost revenue in the high six-figures, over a million if lost secondary income such as retail and catering is included, and that takes no account of impacts on local economies outside ASVA members' attractions."

Local businesses have complained about lost revenue. The recently opened Tullibardine 1488 Visitor Centre, located near Gleneagles, closed its doors for the duration of the G8. And Violet Crane, of Blair Drummond Safari Park, said: "We were almost 3,000 visitors down over the two days, and 23 out of 30 coaches cancelled on the two days, so it had a major impact on our business."

The situation in Edinburgh, where the make Poverty History and anti-globalisation protests took place, appears more clear cut. Niall Stuart, a spokesman for the Federation of Small Businesses, said: "It was obvious that during the week leading up to the G8, shops, restaurants and bars were severely affected at a time when they would normally be busy. We are currently evaluating the impact in a members' survey, but initial evidence does not look good."

Scottish Retail Consortium director Fiona Moriarty said: "Edinburgh was especially affected, but so too were Stirling and Perth, due to the dual effect of lost footfall, and additional costs of increased security. It all added up to substantial losses."

The John Lewis store in Edinburgh is understood to have seen a 23% loss in turnover during the week of the summit compared to July 2004, which would suggest a citywide retail sector loss in excess of £10m.

The controversial 'ring of steel,' the five-and-a-half mile fence erected around Gleneagles Hotel, as well as an estimated three miles of metal trackway, was supplied and installed by Nottinghamshire-based Trax Portable Access, while the bulk of the £5m security contract went to London-based Group 4 Security. Scotland's leading security provider, Rock Steady, was not involved.

Scotland's burgeoning media services industry was overlooked for the G8 sponsorship and media contract, which went to London-based Lexis PR, and another contract was awarded to US-based Jack Morton International.

Angela Casey, chairman of the Scottish Public Relations Consultants Association, said: "It's a great shame that a London company was awarded the contract. The G8 should have presented a wonderful opportunity to showcase Scotland's dynamic creative sector."

A former assistant chief constable, now working as a consultant, who did not wish to be identified, said: "The true costs of the G8 will never be known, but adding direct and indirect costs to consequential business losses, it could be anything between £100 and £150m."