April 2015

 

2015 off to a good start

Early indicators, including arrivals over the first months of the year, suggest that the momentum of growth in demand from international markets is continuing into 2015. The numbers at this time of the year are relatively small, but the trend suggests a continuing upswing in arrivals from overseas. Economic growth in the US and the UK, with some indication of improving confidence across Europe, despite the Greek debt crisis, is encouraging. Coupled with the exchange rate advantage from our main markets outside the Eurozone and more air lift into the country, this points to another good year for Ireland’s tourist industry.

The announcement of a €200m investment by Centre Parcs is a major vote of confidence in the tourism industry. The project far exceeds many FDI announcements in terms of its economic impact for the Midlands. Employing 750 people during the 2 year construction phase and then up to 1,000 full-time jobs when the Centre becomes operational in 2019, this is far more significant than most FDI announcements. It is more significant than a new factory employing over 1,000 people, particularly when the associated downstream economic benefits are taken into account, not to mention the added spending in the region by over 1,500 visitors to the area every 4 days.

CLICK HERE to read the Centre Parcs Press Release.

As always, your comments are most welcome on itic@eircom.net.

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CURRENT MARKET CONDITIONS & OUTLOOK
TRANSPORT UPDATES
TRAVEL INDUSTRY NEWS
ECONOMIC UPDATES

 

 


Rolling 12 month growth in arrivals March – February

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Currency and oil prices a boost to Ireland’s tourism

Relative exchange rates and the price of oil are undoubtedly the two headline economic factors of particular relevance to international travel. Right now the US dollar is at a 10 year high against the euro, the pound sterling is stronger than at any time in the past 7 years, while the price of a barrel of crude oil, at close to $50, has dropped by almost 50% in the past 9 months.

Happy days?

Exchange rates are favourable for travellers from the US and the UK but the ‘advantage’ is not unique to Ireland as it applies to spending in any euro zone destination. Media reports of a surge in demand for euro zone holiday destinations may be over stated, but those spending US dollars or pound sterling will find that their money goes further this year. For example, $100 dollars last week would have brought €93 compared to €72 a year ago, an effective 30% gain. £100 would have appreciated by 13% to realise €137 compared to €121 this time last year. It is likely that for the majority of tourists the holiday budget is defined in their home currency, but they will undoubtedly find that their effective purchasing power has increased. However, as the price of tour programmes in US dollars and UK sterling would have been set back in 2014, the perception of lower priced holidays may not be apparent to the consumer this year. Notwithstanding the currency advantage the principle of good value for money still applies, and Ireland needs to ensure that prices here remain competitive with those in competing destinations. Hopefully, the impact of exchange rates will see an increase in the level of expenditure here from the UK and US markets this year.

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The price of oil impacts on almost all items which we consume, but perhaps we are most conscious on how it affects the cost of travel, by car, plane or boat. While there has been some noticeable downward reduction in the cost of filling the car at the pump, the impact on air and ferry fares is not as apparent. In reality there has been little evidence of a reduction in the cost of travel to Ireland, as in many instances carriers have hedged the cost of fuel and therefore have yet to benefit from the reduction in this major input cost. Carriers are also under pressure to improve the return on investment. In short, this means that the current level of oil prices will need to be maintained over a sustained period before any noticeable change is evident in the level of air and ferry tickets.

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Robust demand for international air travel

There was a strong 6.2% rise in global air travel in February year-on-year, an improvement on the January result of +4.5%, according to the latest data from IATA. The underlying trend in volume data confirms robust expansion in air travel.

European airlines’ revenue per kilometre (RPK) growth has held up, rising 4.8%, despite the Eurozone reporting very weak economic expansion. North American airlines experienced solid growth of 3.5% in international RPKs in February year-on-year, slightly above the 3.1% expansion in 2014 overall. The US economy remains a stand-out performer among developed nations. The decline in oil prices over recent months should help support economic activity and passenger demand in 2015. Industry load factors are rising, with airlines adding capacity at a slower rate than the expansion in demand, despite lower oil prices. International passenger load factors achieved by European and North American carriers rose to 78.3% and 76.8% respectively.


9% more seats on air services to Ireland for summer 2015

Up to 340 flights each day will operate this summer adding an estimated 9% in available capacity compared to a year ago. The increase in capacity is on offer across all major international routes.

Scheduled Air Service Capacity (seats per week)
peak summer 2015 v 2014

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Frequency and capacity on a number of routes is up on last summer, with Aer Lingus, Ryanair, Lufthansa, SAS, Luxair, Delta, United and Air Canada Rouge adding capacity. A number of new services have been launched for summer 2015 including the following:

From Canada

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  • Halifax-Dublin, Europe Airpost

From Denmark

  • Copenhagen-Dublin, Ryanair

From Finland

  • Helsinki-Dublin, Finnair

From France

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  • Paris Orly-Dublin, Transavia
  • Nantes-Dublin, Aer Lingus

From Iceland

  • Reykjavik-Dublin, WOW

From Spain

  • Barcelona-Dublin, Vueling

From Sweden

  • Gothenburg-Dublin, SAS

From Switzerland

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  • Geneva-Dublin, Swiss

From the UK

  • Doncaster-Dublin, Aer Lingus Regional
  • Cardiff-Dublin & Cardiff-Cork, Flybe

From the US

  • Washington Dulles-Dublin, Aer Lingus
  • Chicago-Dublin, United Airlines
  • Los Angeles-Dublin, Ethiopian Airlines

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On cross-channel services, Waterford has regained scheduled services from Luton and Birmingham operated by VLM, while Birmingham-Shannon connection has been reinstated by Aer Lingus Regional. Flybe has withdrawn services from London City and Southend to Dublin.


Aer Lingus to replace long haul fleet

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Between 2018 and 2020 Aer Lingus have announced that they will take delivery of nine A350-900 aircraft (A350XWB or regional variant). These aircraft will progressively replace their existing A330 fleet in addition to expanding their long haul capacity.

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Holiday demand remains strong amongst Europeans

Over four in ten Europeans say they will not change their 2015 holiday plans because of the economic situation, while a third say they will change their plans but still travel. Just one person in nine says they will not go on holiday as a result of the economic situation. These are the findings from the European Commission’s latest annual survey. The proportion of people who intend to go on holiday without changing their plans for economic reasons ranges from 76% in Germany to 12% in Greece. Holiday demand would appear most likely to be dampened amongst Italians, Spaniards and Greeks. Not surprisingly the most common action likely to be taken by those holidaying this year despite the economy is that they intend to spend less.

Recommendations from friends, colleagues or relatives are considered the most important source of information, cited by 55% of respondents, when it comes to planning holidays. Just under half (46%) mentioned Internet websites, with a third (32%) considered personal experience. One in six (18%) say travel agencies or tourism offices are important in their decision-making, followed by free catalogues and brochures (10%). Less than one in ten mention social media sites (8%), newspapers, radio or TV (7%) or paid-for guidebooks and magazines (7%). The relative importance of the range of influences varies across nationalities. For example Internet websites are the most important sources of information in seven countries, led by Finland (65%) and the Netherlands (63%), while Social media sites are relatively significant as a source for respondents in Sweden (15%), while people in Austria (12%) and Germany (11%) are the most likely to mention paid-for guidebooks or magazines.

When it comes to booking the Internet is by far the most common way of organising a holiday, and its use is continues to grow. Two out of every three (66%) used the internet to book their holiday in 2014, up from 58% the year before. This increase in the use of the internet as the booking channel resulted in a decline in use of all other reservation channels.

74% of Europeans made at least one trip away from home in 2014, with almost half of them taking three or more overnight trips, based on the findings of the survey. While the incidence of travel by EU citizens did not change from the previous year, the number or frequency of trips increased despite the economic climate. Overall 40% of ‘main holidays’ were taken in the country of residence – ranging from 60% in Italy, Spain and France to a mere 8% for Belgium.

The full 228 page report, includes commentary and analysis together with results by country can be found at http://ec.europa.eu/public_opinion/flash/fl_414_en.pdf


Tourism Policy Published

The Tourism Policy was recently launched by An Taoiseach Enda Kenny and Minister for Transport, Tourism and Sport, Paschal Donohoe TD. It promises much, including 10 million overseas visitors annually spending €5 billion and supporting 250,000 in the industry by 2025. Reaction to the targets has been mixed with some believing they are not ambitious. Right enough the last Government Tourism Policy published in 2003 for the period 2003-2013, set a target of 10 million visitors annually spending €6 billion by 2013. Certainly in 2007 when the numbers hit 7.7 million, it looked as if the volume target would be met. Revenue had reached €4.9 billion that year. So, whatever about the volume, the revenue projection for 2025 looks extremely anaemic against that background.

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A Tourism Leadership Group is promised within weeks and one of its principal tasks will be to develop a series of 3-year strategies, starting 2016-2018, which will deliver the aspirations of the Policy document. They might well start by considering a more robust revenue target for 2025 than one which delivers a 2% revenue growth over an 18 year period, i.e. €4.9 billion to €5 billion 2007-2025.

CLICK HERE for the full Policy document


Irish Tourism Industry Awards – Finalists Announced

The first Irish Tourism Industry Awards have created tremendous interest in the industry. 330 entries were received for the 12 Awards and after a painstakingly thorough process, the finalists were recently announced. The winners will be announced at a Gala Awards dinner on April 24th at the Doubletree by Hilton Dublin.

Have you got your tickets yet for this great networking event? BOOK HERE!

THE FINALISTS ARE:

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BEST ADVENTURE
EXPERIENCE
  • CycleWest Ireland – Co Galway
  • Erris – Co Mayo
  • Killarney Adventure Race
  • Killary Gaelforce – Co Galway
  • Unique Ascent – Donegal
  • Vagabond Adventure Tours – Dublin
BEST BUSINESS
TOURISM INNOVATION
  • Createsmarter 2014 – Kerry Convention Bureau & MCI Dublin
  • MICE Focus Ireland 2014 – Event Partners – Dublin
  • One Young World Summit 2014 – Conference Partners
    – Dublin
  • The Adventure Travel World Summit 2014 – Kerry Convention Bureau &
    Advantage pco Dublin
BEST FESTIVAL /
EVENT EXPERIENCE
  • A Giant’s Journey 2014 – Limerick National City of Culture
  • Bram Stoker Festival 2014 – Dublin City Council
  • Croke Park Classic 2014
  • Fleadh Cheoil na hÉireann Sligo 2014 – Sligo
  • Punchestown Festival 2014
  • Rose of Tralee International Festival
  • St. Patrick’s Festival
BEST FOOD
EXPERIENCE
  • Bike Buffet – Westport Smarter Travel
  • Fab Food Trails – Dublin, Cork & Kilkenny
  • Galway – The Food Destination
  • Kinsale Good Food Circle
  • Shells Café and Little Shop – Strandhill
  • The Food Summit with Good Food Ireland
  • The Kerrygold Ballymaloe Literary Festival of Food
    and Wine
BEST INTERNATIONAL
ACCESS INITIATIVE
  • Aer Lingus
  • Air Canada Vacations
  • Dublin Airport / daa
  • Irish Ferries
  • Shannon Airport
  • The Travel Corporation
BEST LOCAL
AUTHORITY TOURISM
INNOVATION
  • Boyne Valley Destination – Meath and Louth
    County Councils
  • Burren and Cliffs of Moher Geopark – Clare County Council
  • Cavan Burren Park and the World War I Trench Experience – Cavan
    County Council
  • Kerry County Council
  • Kilkenny County Council
  • Mayo County Council
  • Viking Triangle – Waterford City & County Council
BEST URBAN
EXPERIENCE
  • Dublin – City of a Thousand Welcomes
  • Dublin City Bike Tours
  • Fab Food Trails – Dublin, Cork & Kilkenny
  • Irish Whiskey Museum – Dublin
  • Smithwick’s Experience Kilkenny
  • Wakedock – Dublin
BEST INTERNATIONAL
MARKETING INITIATIVE
  • Abbey Tours
  • Anthony Travel Inc. – USA
  • CIE Tours International Inc. – USA
  • DERTOUR – Germany
  • Dublin Airport / daa
  • Odyssey International – Dublin
  • Trafalgar Australia
BEST ENVIRONMENTAL
TOURISM INNOVATION
  • Burren and Cliffs of Moher Geopark – Co Clare
  • Cliffs of Moher Visitor Experience – Co Clare
  • Doolin Cave – Co Clare
  • Inch and Foyle Wildfowl Project – Donegal County Council
  • Lough Boora Discovery Park – Co Offaly
  • The Top of the Rock Pod Páirc and Walking Centre – West Cork
BEST LEISURE
TOURISM INNOVATION
  • Glasnevin Cemetery Museum
  • Guinness Storehouse
  • Irish Whiskey Museum – Dublin
  • Sheep’s Head & Bantry Tourism Co-operative – West Cork
  • Waterford Viking Triangle
  • Wells House and Gardens – Co Wexford
BEST CULTURAL
EXPERIENCE
  • Abbey Tours – A History Past and Present
  • CIE Tours International Inc. – Wild Atlantic Way Tour
  • Doagh Famine Village – Inishowen, Co Donegal
  • Glasnevin Cemetery Museum
  • The Monuments of Brú na Bóinne – O.P.W.
  • Waterford Viking Triangle
BEST DESIGN
IN TOURISM
  • Cliff House Hotel – Ardmore
  • Equipage Shoes – Shoeniversity – Bantry
  • Inis Meáin Restaurant & Suites
  • Spirit of Place Discovery Points – Mayo County Council
  • Trail Kilkenny – Connected Communities

Diaspora Centre Axed

The planned Diaspora Centre has been axed by Minister Donohoe because, it transpires, no money had been earmarked for the development. Eight companies were shortlisted for the centre with seven having no funding in place. All stated that they had the financial capacity to deliver but would be relying on a mix of government funding, public and private sector borrowing, philanthropic, corporate donations and council funding.

In March 2014, the Cabinet approved the venture which the Government said would become a major tourism attraction. The announcement came after a Fáilte Ireland report said such a centre would be viable and self-financing.

It had been anticipated that at least some funding from Government would be available for the centre. However when this did not transpire, the project was cancelled “due to the complexity of the procurement process and the financial uncertainties of the current proposals presenting significant risks to the successful completion of the project” – according to an internal report to the Minister.


A Divided Nation?
Confidence soars in Dublin reaching a post-recession high

Irish people are more confident in the economy looking ahead than they have been at any time since the boom years. However the gap in sentiment between Dublin and outside Dublin has widened, highlighting a potential two tier, possibly staged recovery. So says the latest Behaviour & Attitudes consumer survey.

CLICK HERE to read the Press Release or HERE for the full survey.


Tourism Ireland Website is a big hit!

Tourism Ireland has scooped the top prize for ‘best tourist board website’ at the French hospitality industry’s ‘Les Travel d’Or’ awards.

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Beating off stiff competition from 48 other destination websites, the Tourism Ireland site, www.Ireland.com, was voted joint number one (with Reunion Island Tourism) for its winning appeal and content by an impressive 146,000 internet users from around France and a panel of web and travel industry experts.

Well done guys!


Highlighting W.B. Yeats 150 and our rich literary heritage

Some 1.5 million readers of The Telegraph in Britain have been reading all about Sligo and the Yeats 150 celebrations.

This year marks 150 years since the birth of world-renowned Irish poet and Nobel laureate, W.B. Yeats, so Yeats 2015 is a key theme for Tourism Ireland in its promotions around the world throughout 2015. Tourism Ireland arranged for the article – which appeared under the headline “Poetry in motion” – to appear in the travel section of a recent edition of The Telegraph. It describes the “hauntingly beautiful homeland” of Yeats and “County Sligo in the invigorating north-west, beloved today by surfers and hill walkers alike”. It also highlights some of the events taking place this year to mark the anniversary, as well as some key tourism spots in Sligo, including Ben Bulben, Lough Gill and Drumcliffe.

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Positive outlook for global economic growth in 2015 and 2016

Despite tempered expectations, most forecasters see strong growth ahead, accelerating in 2016. Leading forecasters estimate that the world economy will grow by between 2.8 and 3.8 percent this year.

According to McKinsey’s latest survey on economic conditions most executives believe that global GDP will grow at the same rate this year as it did in 2014. While global views hold steady, the primary threats hover over geopolitical instability and emergent issues in the Eurozone. Market volatility is being stoked in part by the steep decline in oil prices, which will adversely affect oil producers while benefiting consumers. Although the net impact of the lower prices will differ by country, a very rough estimate of the potential consumer savings is nearly $450 billion which represents a considerable transfer of wealth from producing to consuming countries.


THE US ECONOMY
has momentum from stronger-than-expected growth at the end of 2014. Consumer sentiment and trade activity has increased, with unemployment now holding steady at 5.5%, while financial markets are benefitting from upbeat investor sentiment. However, retail sales dipped in each of the past 3 months, with real wages little above stagnation. The disappointing jobs figures for March are causing some concern and employment figures will be closely watched in the coming months. Despite all this, travel demand has continued to grow.

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IN THE EUROZONE
, macroeconomic conditions are improving after sluggish growth last year. Even with a depreciating euro, deflation, and financial pressures hitting smaller economies, consumer sentiment, manufacturing and trade indices are trending upwards, thanks particularly to lower energy costs. The crunch continues to be the handling of Greece’s bailout and the future of the euro. Europe’s looser monetary policy is welcome, with the European Central Bank expanding asset purchases to €60 billion a month until September 2016. GDP growth forecasts for the Eurozone in 2015 are generally around 1 percent.


THE UK ECONOMY
looks set for continued recovery in 2015 and 2016 despite continued volatility in the global economy. Latest figures show that the UK’s economy expanded by 0.7% in the three months to March, up from 0.6% in the previous quarter, with forecasters suggesting the growth would probably gather some momentum in the current quarter. The main risk to the UK economy IS related to ongoing Eurozone worries and Greece’s bailout package, while businesses in the UK need to cope with a stronger pound, which is already weighing down weak export growth.

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