May 2013

Visitor arrivals for the first four months of year are encouraging, up 4% on the same period last year. The buoyancy to-date of the US and mainland European markets, continuing the growth trends of 2013, augur well for the main tourist season. Significant growth from these two source markets will be necessary to compensate for sluggish demand from the larger British market.

The results for the first four months from CSO provide us with the first opportunity to compare performance with previous years as month on month comparisons tend to be more volatile.

While the results are most welcome they should be treated with some caution, representing as they do only one quarter of annual traffic. Indeed, at this point last year the first four months of the year were even more positive compared to the previous year, yet 2012 finished as a year of no growth in overall visits. Hopefully increasing numbers of visitors, boosted by The Gathering, will continue to arrive throughout the main tourist season.

The initial results are more than welcome and hopefully the positive trend and other anecdotal reports from the markets will continue to produce growth over the important coming months to deliver more visitors to Ireland in 2013 than in recent years.

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

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CURRENT MARKET CONDITIONS & OUTLOOK
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2013 YEAR TO DATE TOURISM ARRIVALS

1.8 million arrivals over the first 4 months of the year are up 4% on the same period last year, based on the latest CSO release. However, the performance is far from even across the source markets.

North America is in pole growth position with strong increases in demand showing arrivals over the past four months up 17% to just over a quarter of a million visits. Mainland Europe continues to produce growth, up 7% with an estimated 663,000 arrivals over the first four months. Regrettably the results from Britain, where trading conditions remain difficult, continue to be negative with arrivals down a further 2% to just under an estimated 810,000 visits. Visits from long-haul markets, including Australia, New Zealand and Asia, which had been growing in the recent past dropped 8% compared to a year ago to an estimated 86,000 visits.

The growth in demand during the first third of the year, about 65,000 net additional visits, has benefited from the marketing push behind The Gathering – appealing primarily to the diaspora and undoubtedly showing a positive impact in North America – together with Ireland’s EU Presidency, St. Patrick’s Festival falling over a weekend this year and a number of sporting fixtures. The Gathering, however, would as yet appear not to have developed any significant traction in the British market.

Traffic in the first four months of the year historically has accounted for just over a quarter of the annual total. The data available is aggregate arrivals and does not disaggregate by purpose of visit, so at this point we have no way of knowing to what extent the changes in volume are being driven by business, leisure or VFR traffic.

On a month by month basis it would appear that Britain has been down for each month compared to a year ago, except for the Easter impact on March. Mainland Europe showed growth in the first quarter but had a weaker April, while North America showed strong double digit growth in each of the four months. Arrivals from other areas were down in each month except February.

Within mainland Europe, most countries showed growth over the period, with the exception of Italy, with arrivals from France (incl. rugby international) and the Nordics showing the higher rates of growth compared to a year ago.

 

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Air Canada has announced year round service from Toronto to Dublin from May 01, 2014. Up to now Air Canada and Air Transat have each operated a summer seasonal service on the route.

Aer Lingus is adding service from Boston to Dublin for the winter with 11 departures per week. The airline is also assessing the level of interest and commitment from US tech companies on the re-introduction of a San Francisco-Dublin service.

Aer Lingus Regional flights are now being processed through T2 at Dublin.


Delta Airline’s Atlanta-Dublin service will reduce from daily to 5 departures per week from September 6th – the usual winter schedule. The airline is scheduled to operate a larger aircraft on its JFK-Dublin service this winter.

US Airways has extended by one month its summer services from Charlotte to Dublin and from Philadelphia to Shannon to early October. The airline’s Philadelphia-Dublin service will reduce from daily to 6 per week from October 16th


Turkish Airlines is increasing frequency on its Istanbul-Dublin service for the coming winter.

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TOURISM EARNINGS BOOSTED BY EVENTS, CONFERENCES AND GOLF

St. Patrick’s Festival is estimated to have generated €121 million for the economy this year, attracting 140,000 overseas visitors – up by over 30% on 2010, according to a Fáilte Ireland survey. The average spend per visitor, drawn from over 30 source markets, is estimated at €696. A survey found that 18% of those who attended this year’s St Patrick’s Festival were influenced to do so by ‘The Gathering’.


Conferences
– 114 international business events are expected to bring a total of approximately 31,000 delegates with an overall estimated economic impact of €37 million, during the first half of 2013.

Golf – earned €202m for the Irish economy, with 163,000 overseas tourists playing golf while in Ireland in 2012, each of which was worth €1,200 to the economy (two and a half times that of the average tourist).


The above findings are from recent Fáilte Ireland research.
More information can be found at http://www.failteireland.ie/News-Features.aspx#searchtext


INBOUND TOURISM TO BRITAIN

The number of visits by overseas residents fell by 3% in March while visitor spending rose by 14%. For the rolling twelve months to March 2013 Britain saw 31.2 million visits, with spending at £19.0bn. The number of visits remains 2 million down on the record twelve months of April 2007 to March 2008. 11.9 million Holiday visits to Britain over the 12 months to March is close to an all-time high, while visits for other reasons still have some way to go to recover from the decreases seen during 2009 and 2010.


RYANAIR PROFIT UP 13% TO €569 MILLION

Ryanair announced full year results delivering a net profit of €569 million on revenues of €4,884 billion up 13%. They carried 79.3 million passengers, up 5% with a load factor of 82%. Ancillary revenue grew 20% faster than the 5% increase in passenger numbers to over €1 billion, and average fare per passenger increased by 3%. The airline’s fuel bill rose by 18% to €1.9B due to higher prices and increased flying and now accounts for 45% of total costs. The airline is reported to be in talks with Dublin and Stansted airports with a view to increasing services, while it is launching flights between mainland Europe and Israel for the first time, as well as eyeing the market in Russia.


CRUISE SHIPS GET CLOSER TO THE CITY AT DUBLIN PORT

French flagged cruise ship Le Boreal berthed near the East-Link toll-lift bridge earlier this month, the site of the proposed new dedicated cruise terminal being developed by Dublin Port. The River Liffey is to be dredged to create a 12m deep channel for some of the world’s biggest liners, up to 340m long, to dock beside the East Link toll bridge. The development will be promoted with at least a quarter of the 100 cruise ships coming into Dublin this year. The world cruise industry continues to experience above-average growth. Thus, it is assumed that the industry will, in 2013, earn about 36.2 billion U.S. dollars, an increase of 4.5% on the previous year.

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NO LET-UP IN EURO AREA RECESSION

Euro-zone GDP is forecast to decline by 0.4% in 2013, following a contraction of 0.6% in 2012, according to the latest projections from the European Commission. Despite greatly improved financial conditions over the past nine months, economic output shrank by 0.2% in the first three months of 2013 from its level late last year, the sixth consecutive quarter of a recession that started in late 2011. Germany, the biggest economy, reported meager growth of only 0.1% for the quarter while France slipped into recession. GDP fell by 0.5% in Italy and Spain, with Cyprus and Greece reporting steep declines. European Central Bank cut Eurozone base rates from 0.75% to 0.50% in response to the continued fragility of the economy.

The disparity between core and periphery is particularly evident in the labour markets. Unemployment in Germany was just 5.4% in March 2013, whereas in Greece and Spain it was around 27%. The gap in unemployment levels is even more stark amongst young people.


UK ECONOMY – SIGNS OF RECOVERY?

The UK’s economy grew by 0.3% in the first quarter, buoyed by a strong performance in the services sector. North Sea oil and gas production coupled with growth in hotels and restaurants, helped to offset further contraction in the building sector and a weak manufacturing output. Household spending continued to edge up for the sixth successive quarter, although weaker than expected at 0.1% growth. Household spending is now 1.3% higher than a year earlier, reflecting slowly improving consumer confidence. Economists believe the UK’s slow recovery will prompt the Bank of England to pump more money into the economy. However, as employment and average earnings are falling the foundations for a recovery are far from secure.


U.S. ECONOMY ON UPSWING
Recent positive economic data – fewer Americans applying for unemployment, rising house values and sales, plus record stock prices – are indicative of an economy on an upswing. Consumer confidence is approaching a five year high, despite federal budget cuts projected to curb the expansion. Federal Reserve Chairman, Ben S. Bernanke, recently signalled that policy makers will not reduce record stimulus, and hold interest rates low, until gains in employment are sustained. Current indicators bode well for the economic outlook in the second half of the year.

IRELAND – CONSUMER CONFIDENCE SOFTENS

Consumer sentiment declined marginally in April as more downbeat projections for the economy coalesced with concern over household finances in the months ahead. The KBC Bank Ireland/ESRI Consumer Sentiment Index edged down with the three-month moving average signalling a slight weakening of sentiment since the start of the year. The report said while there had been a gradual improvement in sentiment in the past two years the most recent data shows a “somewhat poorer trajectory”.


IRELAND OFFERING OVERSEAS VISITORS SIGNIFICANTLY BETTER VALUE FOR MONEY

According to Fáilte Ireland’s annual Visitor Attitudes Survey, Ireland is providing value for money to overseas visitors at rates not seen for over a decade.

The survey, which was conducted with 1,578 overseas visitors to Ireland throughout 2012, shows that Ireland’s value for money has improved significantly and is now receiving net positive ratings across all key markets – even in the challenging British market.

Ireland’s overall net rating (when negative responses are subtracted from positives) as a value for money destination has improved at a significant rate from -11% in 2009 to +24% in 2012.

Other indications from the top-line results of the survey include the great majority of overseas holidaymakers would definitely recommend Ireland for a holiday to friends and family. Our people and scenery remain our main competitive advantages for attracting overseas visitors compared to other destinations, and almost all holidaymakers said that their holiday either matched or exceeded their expectations. North Americans were the most enthusiastic about their trips, with more than half (53%) saying that their Irish holiday exceeded their expectations.

When it comes to considering Ireland as a destination most overseas holidaymakers say that the opportunity to engage with friendly hospitable people and enjoy beautiful scenery remain important factors and interestingly, the internet and word of mouth are the most frequently used sources of information which influence overseas holidaymakers’ choice to visit Ireland.

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