Latest News: Budget 2011 & 4 Year Plan . This issue of the Industry Postcard provides a summary of the principal measures contained in the Budget and the 4 Year Plan as they pertain to our industry. It is clear from the Government’s National Recovery Plan, and yesterday’s Budget 2011, that the tourism industry is recognised as an important indigenous sector capable of creating jobs and increasing export earnings which will be key to Ireland’s economic recovery. The competitiveness of Ireland’s tourism is beginning to recover while the Government is committed to continue to invest in marketing, product development, training and industry supports As always, your comments are most welcome on itic@eircom.net. |
|
BUDGET 2011 |
MAIN POINTS – TOURISM
A single revised rate of air travel tax of €3 will come into effect on the 1 March 2011, down from €10, which applied to routes of over 300km from Dublin, introduced in March 2009. The new rate is temporary and will be reviewed next year. The Minister said the rate would be increased unless there is evidence of an appropriate response from the airlines. The tourism industry had campaigned for the abolition of the travel tax.
GOVERNMENT FUNDING FOR TOURISM The provision of funds for the tourism sector has suffered only marginal cuts:
GROW INCENTIVE SCHEME FOR AIRLINES The Dublin Airport Authority (DAA) has unveiled a major new financial incentive scheme to encourage traffic growth at Dublin, Cork and Shannon airports next year. The Grow Incentive Scheme will see all airport charges for passenger traffic effectively waived once an overall threshold of 23.5 million passengers is reached during 2011, with the DAA rebating the airport charges for all of the additional passenger traffic to its airline customers. (The threshold of 23.5 million passengers for next year is equivalent to the throughput across the three airports this year, normalised for the exceptional impact of the volcanic ash crisis). The DAA also offers generous financial supports to stimulate the launch of new short-haul and long-haul routes from Dublin, Cork and Shannon airports. Under these support schemes, airlines receive discounts for three or five years after the launch of a new route, including a 100% discount on all airport charges for the first year of operation. |
Back to top |
THE NATIONAL RECOVERY PLAN 2011- 2014 |
The Government’s National Recovery Plan, published on November 24th, sets out the broad framework for the management of the economy for the next four years. The fiscal adjustment of €15 billion involves significant cutbacks in capital (-€3b) and current expenditure (-€7b) as well as a broadening of the tax base to raise €5b. The plan is based on economic growth primarily driven by exports, with modest growth forecast over the period of the plan which has been endorsed by the EU Commission and the IMF.The economy is forecast to grow by 1.75% in 2011 and growth will average 3% p.a. over the period 2012-2014.
The principal adjustments include:
The Plan includes a number of elements aimed at further restoring Ireland’s cost competitiveness, which will assist tourism to better compete, these include:
Tourism, Culture & Sport: a target of €76 million savings, across the three divisions of the Department, by 2014. Specific measures for implementation in 2011 include:
The Government is to target savings amounting to €50 million post 2011 which will involve ‘better focusing and prioritisation of tourism spending’. Transport: savings of up to €139 million will be implemented by 2014. Specific measures for 2011 include:
Between 2012 and 2014 additional savings of €100 million are targeted.
|
Back to top |
CURRENT MARKET CONDITIONS & OUTLOOK |
The short-term outlook for travel from each market is based on the best current information available, including economic and other factors influencing demand for travel. The summary presentation, depicted in weather symbols, is intended as a guide to marketers. The monthly series is also intended to highlight any change in market outlook from month to month. |
Overseas visitors to Ireland likely to be down this year |
Overseas visitors to Ireland are likely to be down by at least 13% this year, based on latest estimates from Fáilte Ireland which shows total visitor numbers down by 16.6% for the first 9 months of the year. The bad weather in recent days will further depress demand for the final months of the year, so the year end total could be in the region of 15% below last year. This would mean that the level of visitors would be more than 25% below the peak in 2007, while the number of holiday visitors would have fallen by at least one third over the past three years.ITIC’s End of Year Report and Outlook for 2011 will be published in late December with more details on the outcome for the year and prospects for the year ahead. |
Dublin Airport Passenger Traffic fell 4% in November |
1.3m passengers passed through Dublin Airport last month, 3.9% below the same month last year, with weather disruptions impacting traffic in the final days of November. Passenger traffic on European routes was down 3.6%, with cross-channel routes down 1.7% and trans-Atlantic down 2.4%. This follows a positive 1% growth in October, the first increase for almost two years, the decline in November is modest compared to the fall-off in traffic during the earlier months of 2010, suggesting the bottom of the downturn may be close.For the 11 months of 2010 Dublin Airport has handled 17.3m passengers a 9.6% drop on the same period in 2009, with cross-channel routes down 10% while European and trans-Atlantic routes were each down 8%. |
Back to top |
ECONOMIC SNAPSHOTS |
Economic Outlook |
UK: Latest forecasts suggest that growth in the UK economy may be lower than previously forecast, with GDP growth in 2011 at a modest rate of less than 2%. The increase in VAT in January 2011, together with other austerity measures, will depress consumer confidence and discretionary spending while inflation remains above target.Eurozone: Despite the Irish bail-out, the danger of ‘contagion’ to other ‘weak’ eurozone economies has not gone away and the future exchange value of the euro is still uncertain. Despite this uncertainly Germany and neighbouring nations enjoy a healthy rate of economic growth with falling unemployment and improving consumer confidence. In contrast the outlook is far from positive in Portugal, Spain, Italy and Greece. Talk of a two tier eurozone increases the uncertainty.
USA: America’s economy grew faster in the third quarter than previously thought, with signs of improvement in travel demand, particularly from the corporate sector, on the rise. Americans spent more on shopping over the four-day Thanksgiving period with retail sales in stores and online up by 8.7% on last year. But the good news is overshadowed by the Federal Reserve’s glum assessment that the unemployment rate would remain high for longer than it had predicted. After three years of retrenching airlines are beefing up capacity on profitable routes, with seats on international routes being added more quickly than on domestic routes. However capacity is being added slowly so as not to depress fares which have been rising. |
Currency Watch |
On the currency markets sterling has been fairly stable in recent weeks, trading at just over €1.15, while the US dollar bought €0.75. The value of the Euro against the US dollar was more volatile in recent days reaching a low not hit for several months.Compared to 12 months ago, sterling now purchases approximately 5% more, while the US dollar buys just over 10% more euros. |
Back to top |
ACCESS NEWS |
New services for Summer 2011 | |
Recently announced new services for summer 2011 include:
|
![]() |
Double digit drop in demand on cross-channel air routes Jan-Sept 2010 |
The number of passengers flying between London and Ireland fell by 11.4% for the first 9 months of 2010, compared to an overall drop of 1.8% on international air services to/from London. London-Dublin, the top scheduled service route to/from London ahead of Amsterdam and New York, carried 350,682 fewer passengers, a drop of 11.7%, while traffic on London-Cork route was down 11.5%.International traffic from UK regional airports was down by 3.8%, while demand on Irish routes fell by 15.4% compared to the same period in 2009. (Source: UK CAA). |