November 2011

It’s that time of year again to look back over the 12 months and plan for the year ahead. Happily, for the first time in 4 years, the news on visitor arrivals is positive. However, the outlook across the markets is for another very challenging year ahead. In early 2011 when ITIC launched the industry-led action plan, ‘Tourism Opportunity – Driving economic renewal’, many were sceptical of the target to deliver at least high single digit year on year growth from the top 4 source markets in 2011. The goals set out by the industry were significantly ambitious, but thanks to the anticipated ‘bounce back’ from volcanic ash and concerted marketing efforts the outcome for the year looks like being high single digit volume growth of around 8%.

This welcome start on the road to recovery must not lead to complacency. The economic conditions across source markets have deteriorated while challenges of convincing the market that Ireland offers a fulfilling holiday experience and good value for money are still very real. The need for a concerted marketing effort in 2012 is even greater now as trading conditions worsen and the number of overseas visitors, despite this year’s upturn, is still up to 20% less than 3 years ago. The year ahead calls for even smarter marketing and the maintenance of destination marketing budgets. Given the tools, the industry together with the agencies can deliver more growth in 2012. A platform for continued recovery in 2012 is outlined below.

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

> Current Market Conditions & Outlook
> New Directions for Tourism in the West
> Transport Updates
> Travel Industry News
> Economic Updates
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CURRENT MARKET CONDITIONS & OUTLOOK

 

 

2011 the start of the recovery
Total visitor arrivals up to end September were 10% ahead of the same period last year. As month on month growth declines, and as Q4 2010 was reasonably strong, the outcome for the year should be in the region of high single digit growth compared to last year. While the recovery is very welcome – the first annual growth in overseas visitors in four years – the outcome will still be up to 20% behind 2008. Economic uncertainty, particularly in Europe, points to another very challenging year ahead.

% Change in number of visitors to Ireland January – September

2011 v 2010
2011 v 2009
2011 v 2008
Britain
+7.4%
-11.9%
-26.0%
Mainland Europe
+12.3%
-7.5%
-14.0%
North America
+10.6%
+1.1%
-1.6%
Other Areas
+15.0%
+16.3%
-0.9%
TOTAL
+10.0%
-7.2%
-17.6%

Source: CSO

A strategy to ‘beat the market’ – A platform for continued recovery in 2012

While the economic news continues to be dismal, the empirical evidence is that holiday travel is deeply embedded in lifestyles in the developed world. The overall market outlook for travel from each of Ireland’s top source markets may be flat, but Ireland as a niche player in global tourism can, as in the past, outperform the overall market. Being a small player in a large market offers unique opportunities. As businesses struggle to survive Ireland must go for growth despite the macroeconomic uncertainty. The downturn has demonstrated that even in the most severe downturns, significant opportunities emerge within markets.

The growth scenarios as set out in Tourism Opportunity – Driving economic renewal, call for growth in 2012 of between 5% and 10% across the main source markets. Ireland needs to do better than the average 3% forecast growth for travel in 2012, by adopting a strategic focus which includes:

  • A sharper definition of ‘where’ and ‘how’ to compete, with greater emphasis on identifying
    and understanding where the best prospects are and setting goals for identified target
    segments in each source market; and
  • An emphasis on the differences which convey competitive advantage, including value for
    money.

Continuing recovery and winning market share will depend on smarter and more intensive use of
business analytics to focus on the best customer prospects. The industry is committed to building
on new partnership models with the state agencies, as the business imperative is to aim for growth
above the average in selected source markets and allocate resources accordingly. The industry is
more than willing to play its part in going for growth under pressure.

 

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NEW DIRECTIONS FOR TOURISM IN THE WEST

 

Greater innovation is urgently needed to reverse the trend of fewer holidaymakers going west. From Donegal to Cork, the hospitality industry needs to create more distinctive reasons to visit – this is a key finding of ITIC’s latest report. The estimated 9.8 million bednights spent on the west coast by overseas holidaymakers in 2010 was 37% fewer than in 1999. The report, amongst a series of recommendations, highlights the need for greater promotion of the range of adventure and activity holidays on offer, together with ‘dialling up’ the distinctive appeals of the western seaboard.

The report also calls for a national aviation policy and the rationalisation of the multiplicity of organisations involved in tourism in the west. ITIC will be working over the coming months with stakeholders to implement the report’s recommendations.

For copy of report and new promotional video for the western seaboard Go to www.itic.ie

 

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TRANSPORT UPDATES

 

Update on Air Services

New Manchester service with Flybe takes off in style as Manchester United’s
Sir Alex Ferguson joins in the celebrations

Ireland West Airport Knock were delighted to welcome Sir Alex Ferguson as they officially launched their new service to Manchester recently (Monday 31st October) with Europe’s largest regional Flybe.

The new service will operate year round with flights on Mondays, Wednesdays, Fridays and Sundays for the winter season and additional frequencies planned for the summer season.

From left to right: Joe Gilmore, Managing Director, Ireland West Airport Knock, Sir Alex Ferguson, Manchester United Manager, Andrea Hayes, Flybe, Marketing Manager and
Vanessa Markey, Tourism Ireland

Still more good news for the west as Ryanair is to launch new routes from Knock to Barcelona (Girona), Frankfurt (Hahn), Milan (Bergamo) and Paris (Beauvais) from end March 2012, all of which have considerable possibilities for developing inbound visitors to the West. These new services will provide a welcome boost for tourism from Germany, France, Italy and Spain.

Ryanair is to increase Cork to Stansted flights, with up to 3 services on some days, for summer 2012.

United Continental is to operate a new daily Washington Dulles-Dublin service from June 8th 2012 replacing its 2nd daily Newark-Dublin flight

SAS is adding capacity for next summer with daily service from Stockholm to Dublin and larger aircraft on Copenhagen and Oslo routes.

Aer Arann has pulled out from Galway with no service yet planned for summer 2012.

 

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TRAVEL INDUSTRY NEWS

 

New Board for Tourism Ireland
A new board has just been appointed to Tourism Ireland and it includes ITIC Chairman, John Healy, Aer Lingus Chief Executive, Christoph Mueller, and Failte Ireland Chief Executive, Shaun Quinn. The full Board is: Chairman Brian Ambrose, Vice Chair Jimmy Flannery, Ciara Boyle, Denis Cregan, Shaun Quinn, Howard Hastings, John Healy, David Lyle, Christoph Mueller, Elaine Murphy, Derek Rainey, David Rodway.

 

Growth in demand for Europe from the USA
Despite the downward spiral of the US economy, tour operators predict travellers will return to Europe in growing numbers, says a new World Tourism Organization (UNWTO) European Travel Commission report. However, airlines are considering cuts to seating capacity on flights to Europe next year, with Delta already dropping routes and capacity. On the other hand the American Automobile Association (AAA) is reporting a 15% increase in Europe travel bookings in the first quarter of 2012 compared with that of the same period this year. The good news is that Dublin is one of AAA’s 6 top destinations for 2012.

 

You’re Invited to Britain
The 60 second commercial that’s the cornerstone of Visit Britain’s 2011 advertising campaign continues to run around the world with the benefit of a further £27 million of Government funding. The investment is part of the £40 million ‘GREAT’ campaign promoting Britain overseas for business, study and tourism. This is in addition to the existing four-year, £100 million match-funded, tourism marketing campaign aimed at capitalising on the international attention Britain will receive during 2012.

 

Brand USA
The United States has launched its first-ever nationally co-ordinated tourism marketing programme to attract more visitors to its shores. The private industry led campaign, with oversight from the Department of Commerce and U.S. Congress, is funded not by US taxpayers but by private sector investment and funds collected by the Department of Homeland Security from international visitors.

 

Thomas Cook’s troubles
Speculation continues to surround Europe’s second largest tour operator, which carries 22m passengers a year and supposedly is “too big to fail”. Shares in the company collapsed although recovered somewhat as talks take place with lenders for £100m in loans to carry it through the winter.

 

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ECONOMIC UPDATES Overview: The outlook for growth in the world economy has worsened within the past month.

 

Europe
The European Commission in its autumn forecast projected near-stagnation for the European economy, with GDP in the 27-country economic bloc seen rising by a mere 0.5% in 2012.The eurozone’s worsening sovereign-debt crisis and the failure to find a lasting solution is causing a massive deterioration of confidence in the economy. Germany, the powerhouse of Europe, is forecast to see GDP growth slow to about 1% next year from an expected 2.9% this year. The result of the current autumn surveys of business indicates that the momentum in economies across Europe will slow next year and that there is a growing danger of recession. Concerns also surround the future of the euro, and this is negatively impacting consumer confidence.
UK
The outlook has disimproved and the economy could stagnate until the middle of next year. The Bank of England has cut its 2011 and 2012 growth predictions to about 1%. The unemployment total (2.62m) is the highest since 1994, and the unemployment rate has risen to 8.3%, the highest since 1996. A recent CBI survey shows that business confidence has been hit by the eurozone issue and fears of a second banking crisis in 2012.
US
The economy grew at a slightly slower rate than previously estimated in the 3rd Quarter, with GDP growing at a 2% annual rate. This despite data showing consumer spending still firm and inventories dropping, both of which set the stage for stronger economic growth in the 4th quarter.However, weak income growth and stubborn unemployment levels could curtail consumer spending. Forecasts for economic growth in 2012 are in the range of +2% to +2.5% of GDP.
Ireland
The Government’s GDP growth forecast for 2012, already slashed from 2.5% to 1.6% due to a threat to growth in exports as well as depressed domestic demand, is viewed as optimist by some commentators. Irish householders, already suffering vicious belt-tightening, are now facing more austerity measures in the upcoming Budget. Real personal consumption is forecast to fall by 2.6% this year and a further 0.8% in 2012, according to the Central Bank. No dent in the 14% level of unemployment is expected before 2013.
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