November 2010

Latest News: 16% fewer visits to Ireland in January to September.
The peak summer months saw 8% fewer visits to Ireland from abroad than the same period in 2009, according to the latest CSO data for the quarter July to September released today. While the results show a welcome slowing of the rate of decline in visits compared to earlier in the year, it is apparent that demand for Ireland continues to fall while global tourism is recovering with estimated arrivals in Europe up 3% year to date. Year to date arrivals in Ireland are down 16%. Tourist arrivals to the UK, a competitor in many of Ireland’s source markets, for the first nine months are down 2%.

The number of visitors to Ireland has fallen by a quarter in the past two years, with almost one-third fewer visitors from Britain, our largest market. The downturn from Europe over the two years is of the order of 24%, with a drop of 11% from North America.

The extent of the challenge facing the industry to recover from this downturn cannot be underestimated. A more detailed analysis of the 2010 performance by market is included in this edition of the ITIC/TTC Industry Postcard.

As always your views are most welcome.

> Tourism Arrivals January-September 2010
> Current Market Conditions & Outlook
> Economic Snapshots
> Access News
> Tourism News




8% drop in peak season visits to Ireland
Almost 2 million overseas visitors came to Ireland between July and September this year – 8% fewer than in the same period last year. Visits from Britain at 852,600 were down 10.8% on a year earlier, while 700,900 visits from mainland Europe were off 7.5%. North American visitors were 6.6% fewer at 332,800 and visits from other areas at 110,200 were marginally up on the previous year.Within Europe the performance has been negative mostly in single digit declines compared to a year ago other than the Nordics which showed a 7% increase. Germany was down 3% and France down 5%.
Overall there has been a clear trend of a lessening of the rate of decline over the peak period, resulting in a better year to date performance than was the case at the half year mark.Trips to Ireland July-September

Trips to Ireland Q3 2010
% change vs. Q3 2009
Other Europe
North America
Other Areas

Source: CSO Overseas Travel Quarter 3, 2010 (11 November 2010)


Year to date visitor arrivals down 16%
Arrivals for the first nine months of the year are 16% below the same period a year ago and 25% below the same months two years ago.The sharpest decline has been form the British market with 18% fewer visitors year to date and 31% fewer than two years ago. Since the decline in 2007, the fall-off has been of the order of one third fewer visitors.The European market is also down 18% year to date compared to last year or 24% below the 2008 level. Within the European market the top source country of Germany is down 13% year to date, with France down 19%. Italy and Spain have dropped by 23% and 14% respectively. Benelux is down 23% while visits from the Nordic countries are down 11%. ‘Other Europe’, mainly accession states, have shown a fall off of 19%.

North America has been the best performing source market with only 9% fewer visitors than a year ago.

Note: The quarterly data for overseas visits from the CSO includes day visits to the country and does not distinguish by purpose of visit. Therefore at this time it is not possible to comment on the performance of the ‘promotable’ segment of the market as opposed to the overall market or those visiting for business or VFR. Based on earlier trends and anecdotal reports it is unlikely that the holiday segment has performed better than the total visitor demand from most markets.


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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.


Passenger traffic at Dublin Airport creeps into the black
Passengers using Dublin Airport in October 2010 were 1% ahead of the same month last year, the first positive result in two years. During October traffic on European and transatlantic routes each showed a year on year increase of 4%, while UK traffic was down 1.4%.Passenger throughput for the first 10 months of 2010 is running at 10% below last year, or 1.8m fewer passenger movements. Apart from domestic routes, the downturn continues to be deepest on UK routes, running at 11% down on last year, while both European and transatlantic routes are down 8% year to date.


Global travel and tourism industry growth stronger than expected in 2010
Early indicators suggest that the global travel and tourism industry has grown at a stronger than expected rate this year, but the rate of recovery may not be sustained into 2011.People are rediscovering travel following the recession. Figures from the United Nations World Tourism Organization (UNWTO) for the first nine months of this year confirm the progressive recovery of the industry with a 7% increase in international arrivals compared with the same period in 2009. Arrivals to Europe are up by 3%.Latest data from the World Travel & Tourism Council (WTTC) show that travel and tourism’s gross domestic product is expected to rise by 2% this year, compared with a forecast in January of only 0.5%. The spurt has led the WTTC to downgrade its 2011 growth forecast from 3.2% to 2.7%. Europe, however, continues to lag other regions of the world, predicted to grow by 1.4% next year.


May take up to 5 years for travel to recover from global recession
The travel and tourism industry fears it will take at least a further five years to recover from the global financial downturn, reveals exclusive research from leading travel exhibition World Travel Market (WTM).The impact of the global financial downturn on demand, price and profitability in the industry over the next five years is the industry’s biggest fear. A poll of 1,200 senior industry executives, undertaken in conjunction with WTM, found more than half (56.6%) highlighting it as the industry’s biggest issue. According to the poll, demand factors are the primary concern for almost one third (31.3%), with a quarter (25.3%) of those surveyed specifying the downturn’s negative influence on price, profits and margins. Other concerns included exchange rate shifts and a possible increase in oil prices.


2% YTD fewer visitors to UK
The number of overseas residents visiting the UK was 3% lower compared with September 2009, with year-to-date, 2% fewer visitors. Spending in the year-to-date is estimated at 1% lower in nominal terms compared to the corresponding period a year earlier.The number of holiday visits is unchanged from the first 9 months of 2009, but data for the three months to September shows an increase of 4%. Business visits have increased 3% so far this year, but remain at significantly lower levels than before the economic downturn hit, while visits to friends and relatives (VFR) continue to be depressed, down 6% in the year-to-date.1% fewer visitors to the UK from EU15 countries in the 9 months of 2010, compares to a 4% decline in visitors from Accession countries. Visits from North America have declined 8% in the year-to-date, with visits from remaining parts of the world down 1%.


UK residents travel down 7%
Figures for the year-to-date show that outbound visits by UK residents were down by 7% compared to the corresponding period a year earlier, with visits to North America down by 10%, visits to Europe down 8%, and visits to remaining parts of the world down by 2%. Outbound holiday visits were down 7%, business visits down 5%, VFR down 10%, and other visits down 2% in the year-to-date. UK residents spent 3% less on outbound travel in the year-to-date than a year before.


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Economic Outlook
UK: Consumer spending is likely to lag behind GDP as taxes increase, credit remains tight, with little increase in earnings and the impact of the VAT rise to 20% from January 2011 depressing discretionary spending.Eurozone: Consumer confidence improved slightly over the past two months. Overall the economic outlook remains positive for the next six months despite indications growth figures are set to slow down. However, when the region is looked at from a country specific viewpoint appraisals are very different.USA: The core rate of inflation in the USA fell to 0.8% in the year to September, causing the Federal Reserve further concerns about the prospect of sluggish economic growth beset with high unemployment and the risk of deflation.

US unemployment remained at 9.6% of the labour force in September with 95,000 jobs being lost, whilst consumer confidence deteriorated in September and is now at its most gloomy since February.


Domestic Economy Outlook
Consumer confidence sunk further in October mainly due to a more negative perception by consumers of the outlook for their household finances over the next 12 months. Nearly two thirds of consumers expect their household finances to worsen over the next year.
The KBC Ireland/ESRI Consumer Sentiment Index declined in October to 48.1. This compares to a figure of 52.4 in September, and a value of 54.2 in September 2009. The October reading remains above the all time low in July 2008 of 39.6.
It isn’t surprising that Irish consumer sentiment weakened in the light of a range of bad news on the economic outlook, on banking costs and on budget prospects, prompting a heightened ‘fear factor’ among consumers who realise these developments will seriously damage their spending power in 2011.While the general tone of the October sentiment survey was negative, there were a couple of surprising positive aspects. Consumers were marginally less negative about the outlook for jobs, and even more surprising was an improvement in the buying climate, possibly due to aggressive price discounting or ‘last hurrah’ spending before facing up the looming pain of a very tough budget?
The volume of retail sales (i.e. excluding price effects) decreased by 0.3% in September 2010 when compared with September 2009 and there was a monthly decrease of 0.9%. If Motor Trades are excluded, the volume of retail sales decreased by 2.5% in September 2010 when compared with September 2009.


Currency Watch
The Euro was 6% weaker against Pound Sterling in September 2010 (compared to September 2009) but remained strong compared to the previous three or four years. On average, £1 cost €1.45 in September 2007, but in September 2010 £1 cost just €1.19.The US Dollar was weaker by 8% against the Euro in October compared to October last year.The US Dollar was 5% stronger against the Pound Sterling in September 2010 compared to September 2009. £1 cost $1.80 in September 2008 but cost just $1.56 in September 2010.


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Aer Arann exits Examinership and moves to London Southend Airport

Aer Arann exited examinership on November 10th after the High Court approved the proposed Scheme of Arrangement, following the withdrawal of objections by Revenue, securing all 320 jobs in the company.

A total of €5.7m new investment has been secured including new capital from the UK transport group Stobart and Tim Kilroe Jnr, the son of former Aer Arann owner, who join former majority shareholder, Padraig O Ceidigh, in the restructured company. Aer Arann had entered examinership after racking up substantial losses over the past couple of years. Its creditors were owed almost €30m, with Allied Irish Banks being the largest creditor, owed €5.2m.Aer Arann’s franchise agreement with Aer Lingus, a key element of the business plan, is secured and may deepen in the future. Aer Arann’s London services from Galway and Waterford to Luton will move to London Southend Airport, owned by the Stobart Group, from end March 2011.
OOPS – Correction to Winter Cross Channel Air Services
Preliminary data on winter capacity on cross-channel routes was incorrectly reported in the last Postcard. Available capacity on air services between Britain and the Republic this winter is 6% below last winter, approx. 8,000 fewer seats per week in each direction. Capacity on London routes is down 9%, with 2% fewer seats on routes from British provincial airports. Ryanair and bmi have reduced service, while Aer Lingus, including Aer Lingus Regional, is offering more routes and capacity.Capacity on mainland European services is down 16% compared to last winter, while capacity on long-haul routes is about the same as a year ago.


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Ireland tops Frommer’s top destinations for 2011

Ireland was voted best destination by readers beating Paris into second place, in Frommer’s annual “Top Destinations List for 2011”. Ireland received 29% of the overall vote from the 10 destinations up for nomination. The other destinations up for nomination were Alaska, Hawaii, Australia, Egypt, Italy, Germany, New Zealand, Greece and Paris. More than 7,300 ballots were cast for the awards. Reader’s comments praised Ireland’s lush countryside, history and opportunities to ramble and explore.

In contrast, Blarney Castle was included in a new book “101 Places Not to See Before You Die.”!

The future shape of coach tour travel?

Brendan Vacation’s “Small Group Discoveries” in Ireland is being launched for 2011 – no more than 24 passengers (half the normal tour size) using more upscale five-star lodging, allowing visitors to spend more time seeing more “intimate” and local-resident-connecting sites. Schedules are more leisurely with fewer “early wake up” calls, staying in more intimate properties.

Brendan’s new offering, described as more ‘experiential’ is being pioneered in Ireland in response to changing customer demand. The three new Brendan tours are “Castles and Manors”; “Taste and Tales of Ireland”; and “Castles, Lighthouses & Pots of Gold”. Prices range from $1,799 for a 9-day air and land trip to $2,899 for an 11-day version.

Increased UK Air Passenger Duty (APD) rates
Higher APD rates came into effect on 1st November, 2010 for passengers departing UK airports. While the increase for those travelling on short-haul (Band A) flights is relatively small, from £11 to £12 in economy, medium and long-haul passengers will be harder hit by the new rates. Those travelling to Egypt, for example, face paying an extra £15 in APD, while those heading to the long-haul destinations of Australia and Singapore will be charged an additional £30 on top of previous APD rates. New APD rates 1st November 2010

Economy 2010-11
Premium 2010-11
Band A
Up to 2,000 miles
Band B
2-4,000 miles
Band C
4-6,000 miles
Band D
Over 6,000 miles


Greece struggles to hold UK market by slashing hotel rates

Greece’s tourism chief has promised that hoteliers will hold their prices next year as the country bids to recover its British holidaymakers. Hoteliers in Greece slashed their rates by up to 40% this summer to halt a slump in tourism in the wake of the recession.Greece is aiming to attract 2.1 million people from the UK next year, slightly more than in 2010, and has a target of reaching 2005 levels of 2.5 million visitors within the next few years.


Austria introduces ‘green’ air tax

Austria has become the latest country to introduce an environmental tax aimed at the airline industry. Passengers boarding flights in Austria after January 1st 2011 will be charged €8 for European flights and €40 for long haul flights. The ‘ecological air travel levy’ is similar to Air Passenger Duty in the UK and Germany’s new tax scheme.

Airlines and industry representatives have already objected to the new tax on air travel.

easyJet enters package holiday business

easyJet has signed a three-year deal with Lowcost travel group to launch dynamically packaged holidays to the Mediterranean and beyond. The deal will combine easyJet’s fares with Lowcost’s accommodation and transfers to offer dynamic packages to European cities and beaches sold through a single website, Launched early next year, the holidays will be marketed to easyJet’s 50m customers through a range of on and off-line marketing channels.

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