The Capital’s new dedicated marketing agency is facing a £300,000 “black hole” in its finances – before it has even completed its first year.
The city council set up the Destination Edinburgh Marketing Alliance (Dema) earlier this year to help sell the city better with a more co-ordinated approach.
But Dema, a public-private partnership, is heading towards a £297,653 loss in the current financial year. It has warned it may have to cut back on its work promoting the city.
However, it is hoped that private companies may be willing to step into the breach and contribute to campaigns.
Councillor Tom Buchanan, the city’s economic development leader, said: “As our recent experience with the Edinburgh Inspiring Capital clipper shows, businesses are perfectly willing to support worthwhile and innovative projects that they believe will add value to both their brand and to the city.”
The council has so far contributed £1.37 million to Dema for 2009-10 and is due to make an additional £140,000 contribution.
But Dema has budgeted for an additional £297,653 contribution from the private sector which it has not yet raised.
It was initially hoped that it would help increase tourism spend in Edinburgh by 15 per cent in the next three years.
However, Dave Anderson, the council’s director of city development, said in a new report that it is “too early to establish” if the growth rate will be achieved.
Dema is a move away from the previous approach to tourism marketing, where the council provided a block grant to VisitScotland to promote the city.
Instead, VisitScotland will be paid for specific projects, although it is not yet known how regularly this will happen.
Sinead Feltoe, VisitScotland’s regional director, said: “VisitScotland is, and will continue to, negotiate with Dema on how to best promote Edinburgh to potential visitors around the world and build on the excellent work that has cemented Edinburgh as a top tourism destination.
“The promotion of Edinburgh is central to VisitScotland’s activities and our discussions with Dema centre around identifying specific campaigns that both organisations can work on to create the best possible outcomes for the city in terms of tourism and attracting visitors. Given the restraints on spending, it is vital we work together to achieve maximum impact.”
The council’s total contribution so far includes £350,000 for salaries for nine of its staff, a further £380,000 funding towards the Edinburgh Convention Bureau and £250,000 towards “destination promotion”.