Industry Postcard – July 2015

2015 the start of sustainable tourism growth?

2015 looks set to be a record year for foreign tourist arrivals, based on the 12% growth over the first half of the year and indications from the trade of buoyant demand over the summer period into the autumn. Expectations are that the domestic demand for travel within Ireland will also show an upswing reflecting improving consumer confidence. While all indicators point to a good year for global travel, the record growth in arrivals into the country over the past 6 months suggests that Ireland is winning market share over its competitors in its principal source markets. The spectacular growth so far this year is attributed to a combination of better economic conditions in source markets, improved competitiveness of the Ireland visitor offerings, further boosted by the currency advantage of sterling and the US dollar, more seats available on flights and ferries into the country together with more focused marketing by the industry and state agencies.

The timing of the announcement of the Tourism Leadership Group could not have come at a better time, as the industry faces the challenge of how to ensure sustainable growth in demand over the coming years. The sector urgently needs a comprehensive and inclusive road map as to how best to develop tourism which has a proven record of delivering jobs and economic benefits across the country. Targets alone are hollow aspirations without a strategic plan in place to insure investment by businesses to support future growth.

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

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RECORD 1st HALF YEAR VISITOR ARRIVALS

407,000 additional visitors arrived in the first 6 months compared to a year ago. The unprecedented 12% increase in arrivals to 3,876,000 sets a new volume record. Visits from mainland Europe, North America and Rest of the World mark a new high, while arrivals from Britain are the best since 2009. The first 6 months of the year typically accounts for 45% of annual visits to Ireland.

 

Almost 160,000 additional mainland Europeans visited over the past 6 months, with just under 140,000 more British visitors, 84,000 more North Americans and 25,000 more arrivals from the Rest of the World.

The strongest rate of growth was from North America with a 15% increase over the period, followed by mainland Europe at 13%, Rest of the World at 12% and Britain at 9%.

 

On a rolling 12 month basis the performance shows a growth rate of 10% overall, with the North American market showing the strongest rate of increase at +17%, followed by mainland Europe at +10%, Rest of the World at +8% and Britain at +6%.

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Details on visitor expenditure, their purpose of visit, length of stay and other characteristics of the demand will not be available for a few months.

 

How do the numbers stack up compared to 2008?

A comparison of the current first half year with the same period in 2008 for inbound tourism throws up some interesting data:

  • Visitor volumes from North America and Rest of the World for the first half year are +40% and +50% higher respectively than 7 years ago
  • Visitor volumes from mainland Europe are 14% higher than in 2008, while visits from Britain are 14% below the 2008 level.

Tourism Leadership Group to produce Action Plan

The Tourism Leadership Group, to be chaired by The Minister for Transport, Tourism and Sport, Paschal Donohoe TD, will implement the objectives set out in the tourism policy document ‘People, Place & Policy; Growing Tourism to 2025’. The recently announced Group includes representatives from the tourism industry, the Local Authority sector, and others with particular expertise in areas, such as community tourism development, travel technology, and tourism retailing, as well as the tourism agencies and the Minister’s Department. The job of the Tourism Leadership Group is to agree specific actions that link directly to each policy objective to enable Ireland to achieve the target set for the sector and to monitor its implementation. It is expected that the Tourism Action Plan will be published within six months.

The members of the Tourism Leadership Group are:

  • Shaun Quinn, CEO of Fáilte Ireland
  • Niall Gibbons, CEO of Tourism Ireland
  • Peter Hynes, CEO Mayo County Council (representing the Local Authority sector)
  • Ruth Andrews, Chief Executive of the Incoming Tour Operators Association – Ireland (ITOA)
  • James McGinley, Director, McGinley Coaches, Co. Donegal
  • Stephen McNally, President of the Irish Hotels Federation (IHF)
  • John McQuillan, Co-founder of OpenJaw Technologies
  • Cormac Ó Donnchú, Founder of Experience Gaelic Games
  • Emma O’Brien, Solicitor, Director of Clonakilty Chamber of Commerce, Member of the Cork Airport Development Council
  • Deirdre McGlone, Proprietor, Harvey’s Point Hotel, Lough Eske, Donegal
  • Ray Hernan, CEO of Arnotts
  • Ray O’Leary, Assistant Secretary General, Department of Transport, Tourism and Sport

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A visit to a Eurozone country, including Ireland, continues to be attractive to British and American visitors given the strength of their respective currencies. The purchasing power of the pound sterling has increased by 13% compared to a year ago, while the US dollar has appreciated by 25% over the same period.Back to top

 

New Cork-London City service

CityJet will launch a new service between Cork and London City Airport with 18 departures per week from October 1st.

 

More seats available into Ireland for Winter ‘15

Looking ahead to Winter ’15 a number of new scheduled services and additional frequencies will operate.

Competition looks set to increase on short haul routes to/from Dublin as Ryanair plans to base additional aircraft at Dublin thus increasing capacity and competition with Aer Lingus on a number of short haul routes.

 

The principal changes compared to last winter include:

From mainland Europe

Aer Lingus is adding capacity on services between Dublin and Amsterdam, Paris, Brussels, Zurich, and Geneva.

Ryanair will extend service from Dublin to Copenhagen, Lublin and Venice Treviso, as well as adding frequencies on routes from Dublin to Alicante, Barcelona, Berlin, Budapest, Faro, Madrid, Tenerife, and Warsaw.

Lufthansa is increasing frequency from Munich to Dublin.

From Britain

Ryanair and Aer Lingus are each providing more services from Manchester and Birmingham to Dublin.

Aer Lingus will launch a mainline service from Liverpool to Dublin from October 23rd, with 16 departures per week.

From the US

Aer Lingus adds more flights from Chicago to Dublin; the new Washington-Dublin service is extended to January 4th; capacity from JFK and Boston to Dublin is increased over the period January to March 2016.

Delta plans to operate a larger aircraft on its service from JFK to Dublin.

New Dusseldorf-Cork service S16

Aer Lingus’ new route will operate twice-weekly (Weds & Sun) from May 1st, 2016.

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Pickup in Irish travelling abroad

Outbound travel grew by 10% to 3.23m trips in the first half of the year, the best performance since 2009. While still 15% below the 2008 peak, the pickup reflects an upturn in consumer confidence and suggests that demand for ‘additional trips’ outside of the summer holidays is recovering – a segment of demand hardest hit by the economic downturn with a 25% drop since 2008.

 

Dublin Airport traffic up 15%

1.5 million extra passengers passed through Dublin Airport in the first 6 months of the year, up 15% on last year to 11.5 million. The year looks set to be the airport’s busiest year ever as it celebrates its 75th birthday.

 

UK airport passenger numbers hit new record

UK airports have seen the strongest start to a year since 2008 which has helped UK airports record the best rolling 12 month passenger number total since records began, according to the CAA.

 

May was a record breaker for visits to the UK

The UK welcomed 3.56 million visits in the month, 9% more than in May 2014, providing a 4% increase in visits over the first 5 months of the year and are on a par with the same period in 2008. Despite the strength of the £ sterling arrivals from mainland Europe continued strong in May for the second consecutive month.

 

Britain announces new plan to grow tourism

A new 5 point plan to boost tourism across the UK, overseen by a new inter-ministerial group, will focus on a better co-ordinated sector; skills and jobs; common sense regulation; transport; and an improved welcome.

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Global growth accelerates despite challenges

Despite its downward revision for the year, the IMF expects global growth to accelerate to 3.8% in 2016 due to factors like easier credit, low gas prices, reformed eurozone policies, improving confidence and a better job market. The report presents a tempered view of many international economic setbacks. While markets have been volatile in reaction to negotiations in Greece and a recent stock sell-off in China, the IMF does not expect either to alter the broad outlook for the global economy. Still, long-term economic challenges persist worldwide.

The imminent prospect of a ‘Grexit’ averted, yet again, as Greece negotiates a further bailout from the European Stability Mechanism. While the prospects for economic growth across the eurozone look shaky the expectation is that the leading economies of Germany, France, Italy and Spain will continue on an upward path.

Domestic reports show the U.S. economy is poised for a comeback. The job market continues to grow, while home sales and construction are both rising. Consumer sentiment is also improving, despite disappointing retail sales in June. The Federal Reserve looks for indicators of a strong economy with the likelihood that it could raise interest rates before the end of the year – thus further strengthening the US dollar. In short, the US economy looks well placed to grow more rapidly than most other major advanced economies over the coming years.

The UK’s economic recovery appears to be established, with GDP rising for nine consecutive quarters now to above its pre-crisis peak – the UK is one of the top performers in the G7 group of industrialised countries. Wages are now rising again in real terms after falling for years, set to be further boosted by the Government decision to raise the minimum wage. However, the economic divide between north and south continues, although the recent budget set out measures of investing in transport and other infrastructure projects to break down the divide. The poor June retail figures hit sterling last week, while the euro benefited from the Greek bailout, however longer term outlook is harder to predict as the euro musters support from the Greek bailout and the Bank of England contemplates an interest rate rise.

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