Ireland’s fastest growing overseas market for several years has been Continental Europe. Or should that be markets, since Continental Europe is made up of several individual source markets, with a handful of countries producing the majority of the business – France, Germany, Spain, Italy and Holland.

Tourism Ireland recently produced a market review appropriately titled, Mainland Europe – Sustaining our Success.

They also recently appointed a new Head of Europe to implement the strategies outlined in the review. Finola O’Mahony spoke with ITIC, so click on the image below to hear what she had to say.

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August 26th 2009

The quality of the environment, both natural and man-made, is essential to tourism. Our scenic landscapes, coastline, rivers and lakes are the bedrock on which Irish tourism has been built. Furthermore the economic viability and competitiveness of the industry will only be sustained if the quality of these resources is maintained.

Ireland’s environment remains of generally good quality, though it is subject to potentially damaging pressures from a range of activities.  As a result of continued economic development and changing consumer patterns these pressures have grown significantly over the past decade. There are also a number of key environmental challenges facing Ireland in the coming years; limiting and adapting to climate change; reversing environmental degradation; mainstreaming environmental considerations and complying with environmental legislation and agreements.

Ireland already has a strong brand which has strong associations with the environment and all things green. Given the increased consumer and corporate awareness of the impact of climate change there are opportunities to develop and promote the country as a carbon neutral tourism destination. Already Fáilte Ireland and Tourism Ireland are actively involved in a number of initiatives to assist and work with the Industry in exploiting this ‘green’ potential.

This ENVIRONMENT MATTERS section on the ITIC website will highlight from time to time relevant information, invite comments and submissions on various environmental issues, and it will try to cut through some of the green noise which abounds. The JARGON BUSTER section of the site will develop and become an easy reference point for much of the jargon which pervades the ‘environmental industry’. Certain tourism development can gradually destroy the environmental resources on which it depends. On the other hand, tourism has the potential to create beneficial effects on the environment by contributing to environmental protection and conservation.

Over the coming weeks and months you will receive ezines which are designed to inform and enlighten, in as non-technical a way as is possible, on many environmental issues from complex global warming to simple village renewal schemes. We hope that in time this section of our website will become a source of useful, easily accessible information.

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August 25th 2009

The chill winds which have swept the world of travel and tourism this year have also wafted their way through the streets broad and narrow of Dublin’s fair city.

But the capital remains vibrant, and is confident of return to modest growth as economic recovery starts to appear in Ireland’s main source markets.

ITIC spoke with Frank Magee, Chief Executive of Dublin Tourism. Click on the image below to hear what he had to say.

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August 19th 2009

The addition of much new hotel stock in 2006 and 2007 brought many new challenges to the sector. However, buoyant demand particularly from the domestic market, coupled with careful management of costs, kept the bottom line in reasonably good shape then.

2008 however brought the impact of falling demand on hotel profits to the forefront.  Indeed the twin issues of lower demand and bedroom stock capacity at its highest level ever, will be major challenges for the profit generating potential of Irish hotels over the next few years.

So says the recent Hotel Industry Survey produced by Horwath Bastow Charleton (HBC).

The number of Irish hotels has doubled in the past 13 years, according to John Power, Chief Executive of the Irish Hotels Federation.  Even more telling perhaps is that bedroom stock has grown from 40,000 in 2002 to 61,000 presently, an increase of more than one third.  The IHF reckon that represents an over capacity of 20%, or about 12,000 rooms for the anticipated demand levels of the next few years.

The HBC report which deals with 2008 is sobering in its analysis of the impact on profitability of falling demand and over-capacity.

Last year occupancy levels declined by 6.2% to 63.58%, while heavy discounting saw average room rates fall by €9.44 to €88.25.  Not only were hotels selling rooms at an average 10% cheaper than in 2007, they were also selling fewer rooms.

The relatively small decline in sales however had a much greater impact on profit levels.  This was particularly so in luxury hotels where a 12% fall in sales led to a 45% fall in profits before tax.  The reliance of this sector on the domestic market also increased from 41.9% of guests to 47.7% last year.

Over the entire hotel sector the domestic market in 2008 accounted for 65% of total bednights, up from 53% in 2004.  There is obvious concern that the resilience of the domestic market will be severely tested in the next couple of years.

Falling activities resulted in payroll costs at Dublin hotels increasing again in 2008, reaching an unsustainable level of 41.6% of revenue.  This was almost 10 percentage points higher than hotel payroll costs in Northern Ireland.  Given the continued weakness in revenue, this metric is likely to see further deterioration in 2009.

The HBC report concludes that:

We expect to see hotels change their operating style over the next year where hotels will have more seasonal closures, floors of hotel rooms will be closed for periods, and components of hotels will be substituted for alternative uses.  The lower level of demand for hotel rooms is likely to remain for 2009 and 2010.  The focus will need to be centred on value for money, value added and not just lower prices.  We would have serious concerns about the sector’s ability to rebuild a higher room rate if existing trends of discounting continue.

The Irish Hotels Federation believes that a substantial number of hotels may be transferred to the National Asset Management Agency (N.A.M.A.), and it is anxious to know how the Agency will deal with these businesses.  The IHF is in discussions with Government about finding a way to deal with the bedroom over-capacity in an orderly fashion.  That’s a desirable outcome, and quite a challenge at any time, but all the more complex in these times of weak demand.

Click here to get the full HBC report, or for further information contact Anne Walsh at anne.walsh@hbc.ie.

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August 11th 2009

The Irish Tourist Industry Confederation (ITIC) has described the CSO figures released today for travel to Ireland in June as “bad”, with the performance from Britain as “dismal”.

For the month overall, visitors dropped by 15% with Continental Europe down 12%, North America down 7.5% and Ireland’s largest source market, Britain, down 20%.  This follows on from the 23% drop in UK visitors in May.

Eamonn McKeon, ITIC Chief Executive, ominously warns however, that the retention of the €10 departure tax, the mooted reduction in overseas marketing investment as suggested in the McCarthy report, and lack of adequate credit facilities for businesses, are threats which could indefinitely delay recovery, and lead to the loss of many tourism enterprises.  These are issues which are within Government’s capacity to address and ITIC is calling on the Government to act on all three immediately in an effort to stem the decline and reverse the downward spiral in visitor numbers.  Lack of action will indefinitely delay recovery.

“Falls of the magnitude outlined in today’s report are seriously worrying, particularly from Ireland’s biggest source market Britain”, said McKeon.  “For the first 6 months of this year”, he went on, “British visitor numbers are down over 300,000 or 15.5% on last year.  This is the poorest half year performance since the “foot & mouth” in 2001.

“It has to be acknowledged”, he went on, “that outbound travel from Britain to every destination is down this year, but Ireland appears to be hit harder than many destinations. Continental European visitors for June fell by 12% (30,000 visitors), and for the year to date numbers are down by over 60,000 or 5% on last year.”

North America recorded a drop of 10,000 visitors or 7.5% in June, and for the first half of the year is down over 20,000 or 5% on last year.  “Of Ireland’s main source markets the US was the first to enter recession and weakened travel demand followed that after a period of some months”, McKeon went on.

Now as the US economy appears finally to be moving back towards growth, albeit anaemic, the rate of decline in travel also appears to be softening.  It is probable that economic recovery in Europe will lag that of the US by several months, ITIC believes, and so further disappointing visitor numbers can be expected for the remainder of 2009.  It now seems probable that overseas visitor numbers to Ireland will decline this year by up to 1 million or 13%.

As an era of thrift has taken root with western consumers it also seems probable that associated revenue will drop by an even greater amount, in the region of 20%, or in excess of about €750 million, ITIC believes.

These are traumatic times for the tourism industry, McKeon says, and the short term objective for businesses is just to survive.  “We will have reached the bottom in a few months from now, and then begins the process of recovery and growth.  Despite the inevitable decline this year, over 6 million overseas visitors will arrive, a figure that was unimaginable 10 years ago, and a very strong base from which to recover and grow.  The market causing most concern presently is the UK, and facing the certainty of higher taxes to start paying down the enormous debt levels run up in the economic stimulus programme, the UK consumer is likely to curtail expenditure on luxury items, particularly in the short term.”

ITIC is calling on the Government to remain supportive of tourism, as an indigenous sector, employing over 250,000, generating economic activity across Ireland, and with the capacity to prosper and grow again on the other side of this recession.

August 6th 2009

Northern Ireland has been enjoying a great tourism renaissance in recent years. There has been substantial investment in the product, and air connectivity has been increased dramatically.

But can anyone, or any place, be immune to the economic difficulties which currently prevail in all the principal source markets?

ITIC spoke with Howard Hastings, Managing Director of Hastings Hotels, Northern Ireland’s largest hotel group, and recently appointed Chairman of the Northern Ireland Tourist Board.

Click on the image below to hear what he had to say.

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August 5th 2009