The full cost of the foot-and-mouth outbreak to Scotland's already febrile tourism industry, in terms of lost revenues and failed businesses, will not become clear until early next year.

Early estimates by Visitscotland, the renamed and restructuring Scottish Tourist Board, put total losses for this year at £300m. The industry generally earns Scotland around £2.5bn annually and employs roughly 180,000 people.

But there are already some signs the economic damage may not be quite as bad as many operators, hoteliers and tourist officials feared. But, however grave the damage, many in the industry believe the foot and mouth crisis has had a positive, galvanising effect on Scottish tourism.

In particular, the spring crisis has alerted policymakers to the true economic value of the sector in Scotland. It also appears to have forged a new and unusual degree of consensus and focus in an industry already beset by problems.

"It's a bit of a curate's egg, bad in parts," says Peter McKinley, Visitscotland's acting chief executive. "Some businesses have coped better than others, depending on their locations and whether they're in niche markets."

Indeed, a straw poll of hoteliers and other tourism businesses suggests that the summer season just getting underway may not prove as disastrous as feared.

After a "desperate dip" in trade in the midst of the crisis, for example, bookings at the Mansfield House Hotel in Ross-shire have picked up strongly, according to Norman Lauriston, the owner. "We've had two very, very good months since March," he says, "and our later Summer is looking absolutely outstanding - we already have 75 per cent occupancy booked for our golf business in September."

Other hoteliers say the same. The Craigletie House Hotel in Peebles, claims bookings are "about the same as last year". The Hilton Dunkeld House in Perthshire says bookings are "getting better all the time" and Summer looks just 3 per cent down on last year.

The worst affected are those dependent on foreign tourists, particularly US visitors, who have been deterred by negative TV footage of burning pyres of slaughtered sheep and fears that foot-and-mouth had rendered British food unsafe. The Coul House Hotel in Ross-shire, for example, estimates summer bookings are at least 45 per cent down on last year. "It looks like we're heading for a big, further decline," says Martin Hill, the owner.

The number of foreign visitors to Scotland has already fallen by around 10 per cent in each of the last two years, leading to an overall slide in the total tourist spend in Scotland. The £2.51bn earned in 1999 - the latest year for which there are hard figures - was down on the previous year's £2.54bn and behind 1996 and 1997, when overall spending exceeded £2.6bn.

This slump is commonly blamed on the weak euro and high fuel prices. There are also serious questions about value for money, given that service and facility standards which across much of the Scottish industry particularly in two and three-star accommodation, are also seen as falling behind European or US levels.

The rising popularity of low-cost airline deals out of Scotland to London and Europe have made matters worse. It has become increasingly making it increasingly tempting for Scots to holiday overseas and ignore the unreliable weather and variable standards of their home market.

Now, with Scottish tourism facing its third poor year, smaller operators are starved of the money they need to invest in improving facilities, upgrading rooms and hiring adequate levels of seasonal staff.

Amid this gloom, the industry's rising frustration had been directed at the Scottish Tourist Board, the quango which has an annual budget of £24m to spend on marketing and servicing the industry. Some leading Scottish tourism figures branded the STB as "out of touch" with its market, overly bureaucratic and ineffectual.

Such criticisms prompted Henry McLeish, Scotland's first minister, to order a full management review of the STB late last year. The resulting report, produced by PricewaterhouseCoopers, argued that the STB needed a series of internal reforms that would touch "almost every aspect of the STB's operations."

The STB began acting on this report even before the foot-and-mouth crisis. It rebranded itself Visitscotland. It then hired a global executive search consultancy to find a new, internationally experienced chief executive, more than doubling the post's salary and proposed merging its seven directorates into just three.

Unhappily, a debacle followed. Rod Lynch, the senior BA executive, was appointed as chief executive but the offer was withdrawn four days later after it emerged he intended to retain a post as chief executive of a private air cargo company. Between that fiasco and foot-and mouth, the fortunes of Scottish tourism appeared to have hit a new low.

However, according to Ivan Broussine, chief executive of the Scottish Tourism Forum, the industry's trade association, there are glimmers of hope. Several valuable lessons have emerged from the foot-and-mouth crisis.

One is the link between the tourism industry and the rural economy. "There's a far greater understanding of the relationship between [tourism and the rural economy]. The interdependence has been shown to be very great," says Mr Broussine.

The industry is now poised to take a far more direct and aggressive interest in the Scottish executive's land reform legislation, and in particular its provisions for access to the countryside.

Policymakers have also come to appreciate the importance of tourism in the wider economy. "There's been frustration that the industry has not been able to martial the same kind of support as the farmers," he says. "People are asking, why have we not got a national tourism union, like for instance the national farmers' union," he says. It's posing our organisation a question, and that's a valuable challenge," he says.

Mr Broussine says the industry, previously notable for its internal bickering, is pulling together and focusing on the weaknesses of recent years. "Foot-and-mouth has thrown into sharp relief the trends which were already there, the weaknesses in the product, in the marketing and the infrastructure," says Mr Broussine. "There's a greater willingness jointly to re-examine these." and particularly the whole question of Scotland's tourism branding."

Meanwhile, the revamped STB is quietly reorganising itself. Mr McKinley has not waited for the appointment of a new CEO to begin the restructuring recommended by PwC. All three directors of the body's new directorates have been appointed and the new CEO is expected to be announced at the end of this month. (June).

Moreover, Mr McKinley argues Visitscotland will itself emerge galvanised by has been reinvigorated by the battering it has received over the past six months. "Everyone in this organisation is sick of being the butt and being kicked around. Now's the time to kick back," he says.