The perfect storm for Shannon and the West of Ireland?

  •  A new report published today by ITIC and Shannon Development highlights the particular challenges facing Shannon and West of Ireland tourism in the current difficult economic conditions.
  • This year is proving to be particularly challenging, as US consumer confidence is at a 16 year low due to falling home values, higher gas prices, less credit and an uncertain economic future.  Travel to Europe is expected to be down by at least 10% this year.
  • The falling value of the dollar and sterling coupled with record high food and oil prices combine to put pressure on disposable incomes, depress demand for travel and drive the airline industry into crisis.
  • The immediate challenge facing Shannon Airport is securing the existing routes and services at a time of such financial difficulties for the airline industry.  Winter services on the transatlantic and short haul routes are particularly vulnerable for the coming winter due to typically low off season demand.
  • While Shannon is well serviced by Ryanair to London and provincial UK airports, the withdrawal of the Heathrow-Shannon service with the loss of connectivity continues to impact tourism to the West of Ireland.  Despite increased capacity being offered by Ryanair, total passenger traffic on routes between Shannon and London for the first quarter of 2008 is down 8% over the same period in 2007.
  • The US market while challenging, continues to offer opportunities of gaining share of the 13 million Americans visiting Europe each year.  In the past, thanks to its strong position in the market created by sustained marketing campaigns, Ireland has not suffered as badly as most other European destinations in any downturn, and has recovered more speedily.  Distributors in the market surveyed last month are confidently optimistic that Ireland can continue to win market share even in difficult times and expect their business to recover through 2009 and 2010.
  • However, a number of changes are taking place with a shift in arrivals to Dublin from Shannon leading to new itineraries within Ireland.  A very keen price and value consciousness amongst travellers is resulting in some down-trading, shorter stays and lower spend in the country.  The consensus view in the market is that demand may hold up reasonably well in the early season but is likely to prove more sluggish in the latter half of the year and into 2009.
  • Nonetheless the report is of the view that while the short term prospects may not be as encouraging as at this time last year, Ireland’s potential in Britain, mainland Europe and North America continues to be positive.
  • To access the full report, click here (Word format).
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