March 2013

The publication last week by the CSO of performance data for 2012 is welcomed. The availability of this information within three months of the year end is a marked improvement on last year. The analysis of visitor traffic and expenditure by source market and purpose of visit is essential information for decision making and for measurement of effectiveness of destination marketing spend.

The more comprehensive data on the year’s performance, including some new analysis, demonstrates how top line monthly or rolling 3 monthly arrival figures are only of limited value and, at times, can be misleading as to how traffic in any full 12 month period is performing. The intention of the CSO to produce later this year a more in-depth analysis on a quarterly basis, including origin and purpose of visit, is eagerly awaited. However, to optimise the value of such information and to facilitate marketing decisions a 12 month rolling summary is also required in a timely manner, ideally within one month of the period under review. This would considerably improve the quality of decision making and allocation of resources. Such information is readily available in many of our competitor destinations in a timely manner.

Unfortunately the latest CSO release provides little by way of comparison with previous years as all of the data presented is last year’s performance compared to 2011. In order to identify demand trends a longer time series is required, acknowledging that due to changes in methodology comparisons with years prior to 2009 is not possible.

While the results for 2012 are an improvement on the previous year, and the growth in holiday or promotable visitors is particularly welcome, the outcome merely suggests that a modest recovery is underway. Demand from a selected number of markets has been responsible for this recovery, despite continued contraction of demand from Britain. Mainland Europe continues to grow in relative importance, being the No.1 source of holiday visitors and bednights as well as the top source of tourism expenditure. North America is close to being back to its peak performance levels of 2007, and looks set to surpass that this year.

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

VISITOR ARRIVALS
CURRENT MARKET CONDITIONS & OUTLOOK
CURRENCY WATCH
TRANSPORT UPDATES
TRAVEL INDUSTRY NEWS
ECONOMIC UPDATES

 

 

Overseas visitors spent €2.9 billion on the ground last year, only fractionally up in current terms, so a marginal decline in real terms, on the previous year. The estimate for fares paid to Irish carriers by visitors shows a very healthy 22% increase to €767m, reflecting for the carriers a welcome improvement in fare yields.

The good news from the latest CSO Tourism and Travel release for 2012 is that holiday demand showed some modest recovery with an overall 4% increase to 2.775m visitors. The net increase of about 100,000 more visitors who came on holiday is a return to the level last seen in 2009. Demand from all markets, with the exception of Britain, was up. Germany and France each produced double digit growth, while holiday demand from North America grew by a robust 7% with a commensurate 9.3% overall revenue growth to €742 million. Britain the largest source market continued to contract with a further 5% decline last year.

The trend towards shorter stays continues, resulting in a drop of almost 400,000 holiday bednights in paid accommodations.

Business travel, which includes meetings and conferences, was more buoyant with a 10% increase to just over 1m visitors, generating about 150,000 extra bednights in paid accommodations. The uplift in demand appears to have been driven by markets outside of Britain.

The number of visitors visiting friends and relatives (VFR) or for other reasons was down 7% to 2.25m, perhaps reflecting the decline in the immigrant population. However, due to the Gathering and recent emigration trends this sector can be reasonably expected to return to growth.

The aggregate number of bednights spent in the country, in paid for and unpaid accommodations, was down 5% to close to 48m, of which 24m were in paid accommodation. Hotels continued to gain share of the market, across all visitor segments, topping over 14million bednights sold to overseas visitors, an estimated 13% increase on the previous year – about 1m extra holiday bednights plus 0.5m from business visitors. The Guesthouses/B&B sector experienced a marginal drop in overall demand to just over 4m bednights, with a fall in demand from holiday visitors partly compensated for by an increase from business visitors. The rented sector suffered a significant almost 30% downturn in demand selling an estimated 6m bednights.

While the latest data from the CSO is most welcome, and timely, the report does not provide any insights into the distribution of demand within the country. Hence the national data is unlikely to reflect the experiences of businesses in several parts of the country, as all other indicators point to a continuing concentration of demand in Dublin and some key tourism honey spots.

 

Back to top

 

Back to top

 

Back to top

With the start of the summer schedules at end March long haul services are showing the highest rate of increase, with capacity on US routes up 26% in the peak and seats on offer on Middle East routes up 18% from July. Aggregate capacity on mainland European routes is up 5% while capacity on cross channel routes is down 3%.

Aer Lingus boosts frequency on routes from Manchester and Birmingham to Dublin to 5 and 6 departures per day respectively, adding Aer Lingus Regional flights.


Ryanair adds extra London to Knock flights on Fridays & Sundays.

Aer Lingus drops Dublin-Bucharest service, increases departures to Verona and trims frequency to Milan Malpensa and Warsaw. The airline is adding frequency on a number of sun routes.

Aer Lingus Regional will operate Shannon to Manchester and Birmingham for the summer.

Aer Lingus/United code share expands to United’s Dulles-Dublin and Chicago-Shannon services.

Wizz Air withdraws from Cork, closing its services from Gdansk, Katowice and Poznan.

Flybe will restore service between Manchester and Waterford, formerly operated by Aer Arann/Aer Lingus Regional, with 4 departures per week from May 22.


Ryanair will start 3 times a week service from Dublin to Bologna from June 11.

CityJet will operate a weekly Dublin to Brest service from June 29.


Ryanair adds departures on sun routes from Shannon to Palma, Malaga and Alicante.

Donegal to London via Dublin is now easier thanks to a codeshare between BA and Loganair

 

Ryanair to resume Dublin – Bremen route, with 3 services per week, from September 18.
Back to top

 

THE CONNEMARA GREEN WAY GETS THE GREEN LIGHT

The transformation of the old Galway to Clifden railway line into a tourist-friendly walking and cycling path has received the green light from An Bord Pleanála. The approval, subject to a number of environmental and heritage focused conditions, clears the way for what is expected to be a significant boost to tourism in Connemara.


GOOD NEWS FROM WORLD ECONOMIC FORUM’S ANNUAL
“TRAVEL AND TOURISM COMPETITIVENESS REPORT”
Ireland was ranked 9th in a survey to assess countries’ marketing and branding campaigns in attracting tourists. Travel and tourism executives around the world voted on the perceived effectiveness of destination campaigns. The results from the ‘Executive Opinion Survey’ are a weighted average of the same question asked in early 2011 and again in early 2012.

 


WORLD’S FRIENDLIEST DESTINATIONS

The World Economic Forum has named the world’s most and least friendly destinations. You’d expect to find Ireland in there with the friendly bunch – and right near the top too. Well you do , but just a squeak inside the top 10 at number 9, which may surprise some but give all a little food for thought. Here are the top 10 in reverse order: Burkina Faso, Ireland, Bosnia and Herzegovina, Portugal, Senegal, Austria, Macedonia, Morocco, New Zealand, and the friendliest place in the world, Iceland. We can think of at least 4 countries that won’t be wild about these rankings not having made the top 10, Vietnam, Canada, Australia and the United States’. And we guess it goes to show, we don’t have an exclusive on the Cead Mile Failte.

Now at the other end of the scale and also in reverse order, the 10 unfriendliest countries: Bulgaria, Slovak Republic, Pakistan, Iran, Latvia, Kuwait, Russian Federation, Venezuela, and with the unwanted title of unfriendliest of all, Bolivia.


AER LINGUS LOOKS SET TO EXPAND TRANSATLANTIC SERVICES

The airline is reported to be close to a deal for the wet lease of three B757 aircraft to provide more lift on transatlantic services. If concluded the aircraft would be used primarily to provide more frequent services, possibly year round, to Shannon from New York and Boston, while also providing the opportunity to boost services to/from Dublin including new route(s) for 2014, with San Francisco and Toronto in the frame.


RYANAIR PLACES RECORD ORDER FOR NEW AIRCRAFT

Ryanair is to buy 175 Boeing 737-800 aircraft, the largest European order ever received by Boeing, with a list price of close to $16 billion. The airline said that the order will increase its fleet from 300 to 400 aircraft by 2018 with a target to grow the number of passengers carried by 25% over the next 5 years to about 120 million per annum..

It appears at the same time that Ryanair is abandoning any plans for cheap transatlantic flights. The Independent reports that, “Air passengers hoping for cheaper fares to the US have been dealt a blow after Ryanair signaled it will not be entering the transatlantic market. Less than a week after signing a €11.7bn deal with Boeing to deliver 175 new aircraft to its fleet, Ryanair has ruled out flights to North America. The company’s deputy chief executive, Michael Cawley, said Ryanair’s business model was not suited to the long-haul market.”


EXTRA BAGGAGE

Nobody really believes that airlines need any assistance in dreaming up new ideas for adding extra charges, but then along comes Norwegian Professor Bharat P Bhatta in this month’s Journal and Pricing Management publication.

Charging according to weight and space, he says, is a universally accepted principle, not only in transportation , but also in other services. For airlines, every kilogram means more expensive jet fuel must be burned, which leads to CO2 emissions and financial cost. As the airline industry is fraught with financial difficulties, marginally profitable and has seen exponential growth in the last decade, maybe they should be looking to introduce scales at the check-in.

Really !!!


 

PERFORMANCE OF GLOBAL AIRLINE INDUSTRY IMPROVING

Passenger markets around the globe continue the stronger trend seen at the end of 2012, supported by a further increase in business confidence, according to the latest report from IATA. Capacity growth has been slow, helped by slower growth in delivery of new aircraft, resulting in load factors improving and yields inching upwards.

Back to top

 

EURO AREA RECESSION DEEPENS

The proposed bailout of Cyprus and the inconclusive election results in Italy have added to the clouds over the Eurozone as recession deepens and unemployment increases. In the face of the growing negative impacts of austerity strategies, EU leaders agreed to a ‘structural’ adjustment to allow countries such as France, Spain and Portugal to push out the time scales on deficit reduction. The move signals at least a partial admission that a pro-growth strategy is needed to stimulate the economy. A political priority is now the rising unemployment across Europe, particularly amongst the younger cohort, now estimated at 50% in Greece and Spain. The result is a continuing crisis of confidence and volatility in consumer spending, and euro exchange rate.


UK ECONOMY REMAINS FRAGILE
UK GDP growth of around 1% in 2013 rising to around 2% in 2014 would appear to be the consensus forecast, assuming a gradual revival in the global economy and no major upheaval in the Eurozone. Projections for real consumer spending growth this year are around 1% based on an expected slow improvement in unemployment and some downward movement in the rate of inflation. The loss of AAA status by Moody’s caused a softening in the value of sterling.

U.S. ECONOMIC OUTLOOK POSITIVE

The American economy added 236,000 jobs in February as the unemployment rate fell to 7.7%, the lowest level in more than four years. The Dow Jones industrial average, which measures the performance of 30 blue-chip companies, rose more than 60 points at the start of trading on March 5th, to 14,188.11, surpassing its record close of nearly five and a half years ago. Indicators point to rebound growth in the January-March quarter to an annual rate around 2% or more. Americans spent more at retailers in February, despite higher social security taxes, and manufacturing output grew. The Fed is standing by its plan to keep short-term rates at record lows at least until unemployment falls to 6.5%.


IRELAND – LOW CONSUMER CONFIDENCE

Despite the good marks Ireland is receiving from external monitors, a welcome deal on the promissory notes, buoyant demand for Ireland’s 10-year bonds and overall economic forecasts suggesting modest improvement, the consumer remains very cautious. The stubborn unemployment figures and fears of further job losses, together with the burden of property taxes, levies and declining real incomes makes for depressed consumer demand. The KBC Bank Ireland/ESRI Consumer Sentiment Index fell to 59.4 in February from the four-month high of 64.2 in January. The short term outlook suggests that household spending will be under severe pressure and is unlikely to turnaround during 2013.

 

Back to top
Share this:Share on FacebookTweet about this on TwitterShare on Google+Share on TumblrPin on PinterestShare on LinkedIn

We would very much welcome any feedback or suggestions you may have regarding the Industry Postcard. Help us to make it more relevant to your needs by simply dropping a note to info@itic.ie or by finding us on our social media channels.

To unsubscribe from the ITIC newsletter, please email info@itic.ie with "Unsubscribe From Ezine List" as the subject.