The Irish tourism industry is now worth €7.3 billion in a record year.
Ireland earned an estimated €5.4 billion from overseas tourism in 2015. Spending by international visitors in Ireland grew by up to 16% to reach €4.1 billion while Irish air and sea carriers earned an estimated €1.3 billion in fares paid by visitors to Ireland.
Domestic tourism revenue is expected to show an increase of at least 6 % to €1.6 billion, with a further €300 million earned from Northern Ireland visitors.
This is a good news story for Ireland as the tourism industry delivers significant economic benefits. The increase in demand from overseas tourists means an additional €600 million expenditure compared to a year earlier - an additional quarter of a billion euro to the Exchequer in 2015.
In volume terms, 2015 was a record year for the number of visitors to our shores, with almost 8.6 million arriving directly into Irish air and sea ports. Of this total 7.8 million were staying visitors, up 14% in 2015, while over 850,000 were day visitors.
There was a strong increase of 20% in holiday visitors, business visitors were up 10%, while those coming to visit friends and relatives (VFR) grew by 2%.
All major source markets exceeded expectations producing double digit growth in 2015, with Ireland gaining share of outbound traffic in several key markets.
Indicators from businesses across the country suggest that the boost in demand was experienced in most areas with the western seaboard gaining an increased share of tourism traffic and expenditure.
The Irish tourism industry now employs 224,000 people throughout the country with 20% of all new jobs since 2011 being in the tourism & hospitality sector.
This very strong performance is testament to the quality and competitiveness of the Irish tourism industry. Other factors helping drive this exceptional result include improved economic conditions in source markets, the strength of the US$ and £sterling against the euro, investment by airlines in expanding the range of services into the country, and effective destination marketing.
The Government decision to maintain the 9% VAT rate on tourism services, and the suspension of the Air Travel Tax, continue to boost Ireland’s competiveness on the back of efficiencies and better value offerings from tourism businesses.
The Tourism Policy, published by the Minister, was welcomed by the industry which now looks forward to a coherent strategy from the Tourism Leadership Group (TLG) to guide Government investment decisions and businesses in shaping a sustainable growth industry.






2016 – the outlook looks bright but there are challenges

Irish tourism is well positioned to continue to reap the benefits from excellent market positioning, a continued expansion of air services into the country, and a dynamic and market responsive business sector.

Economic and trading environments in most of the main source markets continue to look positive for 2016, including a currency advantage for visitors from the USA and Great Britain. Low oil prices are expected to help further stimulate demand with attractive air fares.

Capacity on air services will increase again in 2016, with up to 10% more seats on offer across the main source markets, including the opening of new gateways.

The domestic market, which continues to underpin many tourism enterprises, is expected to see some further pick-up in the demand for short leisure breaks as personal finances improve.

Irish tourism businesses are particularly bullish and are continuing to invest heavily in marketing while continuing to deliver good value for money.

ITIC believes that the national target of 5% revenue growth in overseas visitor arrivals in 2016 is eminently achievable, given the healthy state of key source market economies and the strength of the pound sterling and the US dollar.

Sustainable growth is not guaranteed however and the sector is not without its challenges in the years ahead.

The challenges facing the sector include:

  • The risk that, with a much improved economy in Ireland, costs may rise and threaten the competitiveness of the visitor experience;

  • Capacity constraints including hotels in Dublin and on some access services at peak times;

  • Ensuring adequate investment in infrastructure and visitor facilities to meet market needs;

  • A decline in destination marketing by the state;

  • Uncertainty surrounding the geo-political environment and the threat of terrorist activities on travel.



It's hard to imagine a more favourable set of circumstances for tourism – an improved economy in most source markets fuelling a strong demand for travel, increased capacity on air and sea services to Ireland, falling fuel prices, and a stronger US dollar and pound sterling coupled with the good value for money to be had in Ireland. This has led in 2015 to a 14% year on year increase in international staying visitors to 7.8 million arriving directly into the country, with a further 300,000 arriving via a Northern Ireland gateway. The level of demand set a new record for inbound tourist arrivals, surpassing the previous record year of 2008. The growth in visits in 2015 is especially welcome as it builds on the 7% growth achieved in 2014 and represents double digit year on year growth across all the main source markets.

More importantly the outcome shows year on year earnings from tourism growing at a faster pace than volume, reversing for the first time in more than a decade the trend of decreasing value despite growth in numbers. The favourable exchange rate on offer to dollar spending tourists and a significant uplift in holiday visitors from the largest source market by value -mainland Europe - were the primary contributors to a 16% upswing in earnings for the sector. Best estimates suggest total earnings of €4.1 billion from overseas visitors in 2015, with a further €1.3 billion earned by Irish carriers.

  • Visits from all the main source markets recorded double digit growth. All major markets, with the exception of Britain, set new record visitor volumes.

  • The growth in visitor numbers was driven primarily by a very healthy increase in demand for holidays, with business travel remaining buoyant reflecting an economic recovery while demand for VFR (visiting friends and relatives) showed modest growth.

  • The US market, a source of high spending visitors, continued its run of impressive growth over the past 4 years driven by increased air lift resulting in over 20% increase in revenue.

  • The British market – the largest volume source market – continued to recover with a 12% increase in visitors.

  • Mainland European markets, the top revenue source, recorded a year on year growth of close to 15% in volume and 18% in value.

  • Long haul markets, including Australia, New Zealand, and developing markets in Asia Pacific and the Middle East, produced approximately a 13% increase in volume.



Expenditure by visitors in the country is estimated to have increased by €600 million in 2015 compared to the previous year. An analysis of the increases in tourism expenditure, based on the first nine months data from CSO, is interesting. It is apparent that 85% of the incremental increase in earnings came from holiday visitors. This is a welcome development, undoubtedly helped by the weakness of the euro, with growth in the total expenditure by holiday visitors up close to 30% on a 20% increase in volume. Estimates of expenditure by purpose of visit shows that VFR visitors was marginally down on the previous year despite a 2% increase in the number of trips, but still generating close to three quarter of a billion in tourism receipts. Business visitors were the source of an estimated additional €60 million, bringing the total for the sector to close to €650 million for the year.

A breakdown of the incremental revenue earned shows that North American visitors led the way generating an estimated €245 million more than in the previous year, with 1.5 million visitors spending a total close to €1.2 billion. This would indicate that average spending per head by North American visitors in 2015 increased, no doubt boosted by the very favourable exchange rate.

Earnings from the markets of mainland Europe were up by an estimated €230 million, rising to approximately €1.5 billion. The average spend per visit would appear to have risen as the rate of increase in expenditure exceeded the increase in volume.

Spending by British visitors is estimated to have increased by €85 million to a total of just shy of €1 billion. Perhaps surprisingly, despite a favourable exchange against the euro, aggregate expenditure by British visitors suggests that the average spend per visit declined compared to a year earlier. A possible reason could be a shift in the composition of demand by purpose of visit leading to an overall shortening in the length of stay, or a changing pattern of how, and on what, British visitors spend in Ireland.

Expenditure by visitors from the rest of the world, including new developing markets, which historically are amongst the highest spending visitors to Ireland generated an additional €30 million to a total close to €450 million, suggesting a marginal decrease in average spend per visit.

Bed nights spent in the country by overseas visitors are expected to show a 10% year on year increase to 60 million, an increase in demand of 5.5 million. The distribution of bed night demand by category of accommodation over the first nine months of the year shows that growth in demand was for ‘paid for’ accommodation as holiday demand rose sharply and nights spent with friends and relatives dropped marginally. Hotel demand is estimated to have increased by 18%, while Guesthouses and B&Bs benefitted from a 30% increase and rented accommodation enjoying a 23% upswing in demand.

Based on the available data, hotels increased their share of demand from 27% to 29%; rented accommodation grew from 14% to 15% and Guesthouses/B&Bs up from 10% to 11%, with ‘other category of accommodation’ accounting for almost 20% of demand and stays with friends and relatives dropping from 29% to 26%. ‘Other’ includes hostels, student accommodation and may also be capturing Airbnb and HomeAway stays.













Tourism outlook for 2016

The national target of 5% increase in overseas visitor revenue in 2016 is realistic, if perhaps a little conservative, given the state of source market economies, the increase in access capacity into Ireland and anticipated strength of the US dollar, and the current year’s trends in demand from all the major source markets. Of course the geo-political scenario is far from certain and the continued threat of terrorist attacks around the world will inevitably impact on demand for travel. So, while the balance of indicators is positive, continued growth is not guaranteed.

Economic outlook across Ireland's main source markets

Tourism performance is heavily dependent on the wider global economic environment, which happily is poised for growth comparable to recent years’ performance although with textural shifts and caveats. The outlook for Ireland’s key source markets for tourism is broadly positive, with the Eurozone expected to improve a little, while the US is forecast to perform much the same as last year, with the economic outlook for Asia uncertain due to doubts about the Chinese economy. The International Monetary Fund’s latest World Economic Outlook expects the world overall to expand in 2016 by 3.6%, up on the 2015 estimated growth of 3.1%. With the falling price for natural resources several economies will slow, while the consumer in developed economies will benefit from lower prices. The reduced cost of oil, currently at a 7 year low, will make the cost of travel more attractive to increasing numbers of people.

Eurozone economies look set to grow in 2016

The Eurozone economy’s continued growth, supported by strong dynamics in domestic demand, is likely to continue into 2016 although moderated mainly due to headwinds from a deepening deceleration in emerging economies. Household consumption continues to be propelled by low inflation and an expansionary monetary policy, as well as by a gradual improvement in the labor market. GDP growth is projected to rise to almost 2% in 2016 and 2017, although some stark differences across countries within the euro area will persist.

Continued growth in US economy and demand for travel

The US economy will be entering its seventh year of expansion after the global financial crisis of 2008-09, with most forecasters expecting modest growth of between 2 and 2.5% in 2016. The outlook for jobs and the housing market is good, underpinned by the expectation of a rise in interest rates reaching a still-low rate of just over 1.1% by the end 2016. Most predictions are positive for continued growth in outbound travel, with the US dollar expected to strengthen further against the euro, barring a major terrorist incident or specific threats to Americans travelling abroad.

UK growth forecast on the back of consumer spending

Britain’s economy is now expected to grow by up to 2.5% in 2016, despite weak manufacturing and trade performance. Consumer spending and the services sector have spearheaded a recovery in Britain which saw its economy outperform those of other advanced nations in 2015 with employment and pay levels rising. The British pound has been in decline against the euro since the summer due to uncertainty concerning the timing of UK interest rate rises based on subdued inflation. The threat of ‘Brexit’ weighs on Sterling, while most forecasters do not now expect an interest rate hike during 2016.


Ireland's economy growing at its fastest pace in 15 years

With GDP showing volume growth of 7% in 2015, it is forecast to grow by another 4.3% next year. Consumer confidence is at its highest since the start of 2006. Job and personal finances optimism has risen after the Government’s latest announcement of easing of austerity measures and the introduction of tax cuts. Recent upwards trends in retail and travel sales are expected to continue through into 2016, which should see a further upswing in demand for short breaks.

Another year of growth in airline capacity in 2016

The good news is that more seats will be available on air services, a primary driver of tourism demand. Capacity on air services in the peak months of 2016 will be at least 10% ahead of last summer. The principal additions to air service routes and frequency, compared to summer 2015, which will benefit inbound tourism include:

From the US

  • Aer Lingus is relaunching a service from Los Angeles to Dublin (effective May 4th), while adding new services from Newark (effective September 1st) and Hartford (effective September 28th), as well as increasing frequency from Chicago to Dublin.

  • Delta Airlines is upgrading to larger aircraft on its services to Ireland from May 2nd.

  • Norwegian proposed flight from Cork to Boston May 2016 (TBC)

From Canada

  • Air Canada Rouge is launching a new service from Vancouver to Dublin, effective June 10th to October 8th.

From Germany

  • Aer Lingus is launching a new Dusseldorf-Cork service from March 27th.

From France

  • Aer Lingus is launching a Montpellier-Dublin service.

  • CityJet will operate new services from Nantes and La Rochelle to Cork from June 18th to end August.

From Spain

  • Iberia Express will operate a new service from Madrid to Cork, effective June 18th to end August.

  • Norwegian Cork to Barcelona May 2016 (TBC)

From The Netherlands

  • Ryanair has commenced service from Amsterdam to Dublin.

From Greece

  • Ryanair and Aegean will each start service from Athens to Dublin.

From Britain

  • Ryanair and Aer Lingus are adding frequency on a number of key routes, including Manchester and Birmingham to Dublin.

  • CityJet has commenced service between London City and Cork.

  • Aer Lingus has commenced service from Liverpool to Dublin and is increasing capacity between London and Shannon.

  • Aer Lingus Regional is launching two new services to Cork from Southampton and Leeds Bradford, while relaunching service between Edinburgh and Shannon plus a new Newquay-Dublin service.

  • Flybe will service Birmingham and Edinburgh to Knock, Ireland West Airport.

In addition to the above, Ryanair and Aer Lingus are adding services on a number of established routes; while there will be some tweaking of frequency on other services.


Some Threats to Continued Growth

Ensuring Competitiveness:

The recovery over recent years has been driven by a marked improvement in competitiveness in terms of price and quality of the tourism offering. Ireland’s improving economy could pose a threat to the competitiveness should our costs rise faster than in competitor destinations. There is a risk that the strength of the US dollar and Sterling could mask unfavourable price increases. It is vital that the improved value for money rating which visitors have reported on their experience is not allowed to slip. A loss of competitiveness represents the single largest threat to the sector.

Capacity Constraints:

Capacity issues represent a potentially serious constraint to continued growth. This is particularly evident in terms of a shortage of hotel capacity in Dublin which limits the ability to attract increasing volumes of visitors to Ireland. Dublin hotels are operating for much of the year at close to capacity due to the city’s popularity as a leisure and business destination. For the city to achieve its potential additional accommodation is required.

Overall as demand increases across the country sustained growth will become more dependent on the ability to attract greater number of visitors outside of the peak months when access, accommodation and other service providers have spare capacity. If filled, this will in turn significantly boost profitability and sustain greater levels of year round employment.

External Environment:

Uncertainty surrounding the geo-political environment and the threat of terrorist activities on travel hang over the outlook for the year ahead. However, demand for travel has proven to be resilient in the face of terrorist threats and hopefully any impacts will be minimal for Northern European destinations.











ITIC’s agenda includes the following key goals for the year ahead as part of its ongoing advocacy role on behalf of businesses and other stakeholders engaged in tourism.

A new Strategic Action Plan for tourism

The industry eagerly awaits the outcome of the Tourism Leadership Group (TLG) which is charged with the formulation of an action plan following the publication of the Government’s new policy statement ‘People, Place, and Policy – Growing Tourism to 2025’. The translation of the broad policy aspirations and goals into a clear roadmap for the future development of the sector is urgently needed to guide both public and private sector investment decisions. A sustainable future for the tourism industry is dependent on a clear vision of what tourism in Ireland will look like in 10 years from now. The economic scale and value of the sector, and its potential as one of the world’s fastest growing industries, demands a comprehensive and integrated action plan for the delivery of development and marketing programmes against set targets, beyond a short term year on year perspective.

Addressing a capital investment deficit

Future growth opportunities in tourism run the risk of being limited by infrastructure deficits. Continued growth is dependent on a commitment to investment in tourism infrastructure, people and attractions. The level of funding in the Government’s Capital Programme 2016-2021 allocated for tourism development, currently proposed at €106 million over 5 years, is disappointing and inadequate for an industry generating over €7 billion per annum in to the economy. Prioritisation of the Capital Programme 2016-2021 will be critical to shaping the future of tourism. In common with several business representative organisations, ITIC is strongly of the view that Government should use the current upturn in economy and exchequer receipts to invest in essential infrastructure as a basis for future growth.

Partnership with state agencies – Fáilte Ireland &
Tourism Ireland

ITIC is committed to continuing to work with the state agencies charged with facilitating the development of the sector to ensure that investment and marketing programmes are effective in delivering results in a cost efficient manner. ITIC representatives welcome the opportunity to engage in real dialogue and an exchange of views in working groups to ensure that key decisions by the agencies are informed by market research and a business perspective. A priority for 2016 will be to address identified pressure points limiting the future development of the sector while maintaining focused marketing campaigns in those markets offering the best potential in terms of income and economic benefits.

An Engine for Growth and Jobs

Published: November 2015

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H1 2015

Published: September 2015

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A Manifesto for Growing Tourism and Jobs

Published: July 2015

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Budget 2016 Submission

Published: July 2015

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Published: May 2015

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Published: May 2015

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Published: March 2015

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A Review of Coach Tourism
in Ireland

Published: March 2015

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ITIC position on IAG/Aer Lingus

Published: February 2015

View Report


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