1RET Stakeholder Meeting 19 January 2010 Road Equivalent Tariff Study Stakeholder Meeting – 19 January 2010

19 January RET Stakeholder Meeting Agenda Presentation Monitoring Programme Summary Performance Overview Discussion Interim Evaluation Carryings (Pilot vs Non-Pilot) Economic impacts Price data Social and environmental impacts Discussion Date of next meeting AOCB

19 January RET Stakeholder Meeting Aims for today To provide an update on the monitoring and evaluation of the RET Pilot scheme, and in particular: Highlight changes made to the monitoring programme. Highlight emerging findings from the Interim Evaluation. Discuss with stakeholders key issues with regards to the monitoring and evaluation work in 2010.

19 January RET Stakeholder Meeting RET - 3 Phases Phase 1 – RET options Completed May 2008 Phase 2 – Monitoring the Pilot scheme Baseline surveys August Ongoing data collection throughout the Pilot. Phase 3 – Evaluation of the Pilot scheme Interim Evaluation (January 2010). Final Evaluation (December 2010).

5RET Stakeholder Meeting 19 January 2010 Monitoring Programme Update

19 January RET Stakeholder Meeting Impacts of RET on island economy, quality of life and environment Short-term impact of the RET Pilot scheme over first year : Ferry traffic data – passenger; car and CV carryings; capacity utilisation Accommodation occupancy rates Employment and Unemployment Business confidence; turnover; profitability and costs Business start ups Price of goods and services Medium-term impacts over two years - as above plus : House prices Quality of life Environment

19 January RET Stakeholder Meeting Phase 2 – Monitoring of the Pilot Ferry Services RET Services: Stornoway – Ullapool. Uig – Tarbert/Lochmaddy. Oban – Castlebay/Lochboisdale. Oban - Coll/Tiree. Benchmark services: All other CalMac services. Northlink Services. Western Ferries.

19 January RET Stakeholder Meeting Phase 2 – Monitoring of the Pilot Area RET Area: Western Isles, Coll and Tiree. Benchmark Areas: Northern Isles. Other island and Insular Communities. Scottish Mainland: Highland Argyll

19 January RET Stakeholder Meeting Monitoring Programme – Summary

19 January RET Stakeholder Meeting Monitoring Programme – Performance Overview Positives Extensive Ferry traffic data pre and post pilot. Robust On-board surveys. Good response to Household survey. Key Issues Weak engagement with the business community. Weak engagement with the tourism sector but good data from secondary sources. Retail and fuel price surveys.

11RET Stakeholder Meeting 19 January 2010 Interim Evaluation Emerging Findings

19 January RET Stakeholder Meeting Carryings – Passengers Increase of nearly 84,000 more trips by passengers (19%) on the RET routes during the first year (November 2008 – October 2009) of the Pilot compared to the same period during 2007/2008. Seasonal demand with carryings peaking in August and July, higher on all the Pilot routes subsequent to the introduction of RET.

19 January RET Stakeholder Meeting Carryings – Cars Increase of nearly 40,000 more trips by cars (30%) on the RET routes during the first year (November 2008 – October 2009) of the Pilot compared to the same period during 2007/2008. Seasonal demand with carryings peaking in August and July, higher on all the Pilot routes subsequent to the introduction of RET.

19 January RET Stakeholder Meeting Carryings - CVs Increase of 867 more commercial vehicles (4%) on the RET routes during the first year (November 2008 – October 2009) of the Pilot compared to the same period during 2007/2008. No seasonal trend in carryings.

19 January RET Stakeholder Meeting Carryings – RET and Non-RET routes Change in patronage between Nov 08 – Oct 09 compared to the same period in 2007/2008 PassengersCars RET routes19%30% Hebridean routes 1 5% Scottish Ferry Network 2 3%2% Notes: 1 – All routes operated by CalMac outside the Firth of Clyde. 2 – All routes operated by CalMac and Northlink.

19 January RET Stakeholder Meeting Patronage across the Scottish Ferry Network Increase in passenger and car traffic since the introduction of RET most pronounced on the RET routes, although also increases across other adjacent ferry routes.

19 January RET Stakeholder Meeting Capacity Utilisation Only two occasions when demand was above 65% capacity utilisation on any of the RET routes – single sailing on the Ullapool-Stornoway and Uig-Tarbert/Lochamaddy routes in July Only a very small number of sailings reported to experience 85% capacity utilisation in Important to recognise wider issues also impact on capacity: Size of vessels may change on routes due to maintenance requirements. Reduction in crewing levels in the winter. Cancellation of sailings due to bad weather.

19 January RET Stakeholder Meeting Revenue Substantial increase in patronage on RET routes, but this has been less than the corresponding decrease in fares for passengers and cars on all RET routes (i.e. all of the routes are relatively price inelastic). Average price elasticity of demand: Passengers – 0.47 Cars – 0.83 Total farebox revenue fell by 28% for passengers;16% for cars and 40% for commercial vehicles across all RET routes in the first full year (November 2008 – October 2009) compared to the previous year.

19 January RET Stakeholder Meeting Travel Behaviour Initial impacts much greater in summer season than in the winter suggests they are strongly related to tourism and leisure travel. Shift towards a higher frequency of travel by visitors after the introduction of RET, suggesting an increase in repeat visits. Day trips now more common for both visitors and residents, especially for leisure and shopping purposes. No evidence of route switching or mode switching through the monitoring date collected so far.

19 January RET Stakeholder Meeting Economic Impacts Larger increase in employment and turnover in the Western Isles between March 2008 – March 2009 compared to other areas including Highland; Orkney; Shetland and Scotland as a whole. Impacts on local business community most pronounced within the tourism sector: Extension of the opening season in 2009 compared to More businesses operating at full capacity during the summer months of 2009 compared to Supported by Visit Scotland data Encouraging signs but too early to conclude extent to which the introduction of RET has been a factor. Further data gathered through 2010 will enable more conclusive analysis as part of the Final Evaluation.

19 January RET Stakeholder Meeting Price Data – Retail Unweighted price index developed based on the retail price survey data relative to November 2008 baseline. RET Pilot Area Scottish Mainland Other Scottish Islands November February May August

19 January RET Stakeholder Meeting Price Data – Petrol

19 January RET Stakeholder Meeting Price Data – Diesel

19 January RET Stakeholder Meeting Social and Environmental Impacts The social and environmental impacts will be further considered at the final evaluation stage when further monitoring activities have been undertaken. The assessment of social impacts will focus on how residents in the RET pilot have been influenced in terms of their quality of life subsequent to the introduction of RET within the pilot area. The assessment of environmental impacts will focus on the environmental implications of changing travel patterns and mode of transport used to access/depart from the ferry services.

19 January RET Stakeholder Meeting Discussion Carryings (Pilot vs Non-Pilot routes) Economic impacts Price Data Social and environmental impacts

26RET Stakeholder Meeting 19 January 2010 Next Steps

19 January RET Stakeholder Meeting Next Steps Finalisation and publication of the Interim Evaluation. Ongoing monitoring activities. February; May; August and October survey periods in Publication of the Third Monitoring report June Publication of Fourth Monitoring Report and Final Evaluation December Date of next meeting – July AOCB.