October 2011

As Germany and France’s put their collective minds behind a “comprehensive package” for recapitalising the eurozone’s banks, and BlackBerry users cursed their devices, consumer confidence across Ireland’s main source markets dipped further. Airline traffic in August and September showed a deceleration of demand for international travel with little or no growth in recent weeks. Despite this the longer term outlook for tourism is for continued growth but at a more moderate pace than over the past decades, according to the newly-released UNWTO long-term forecast, “Tourism Towards 2030”.

Closer to home, the recent Global Economic Forum in Dublin put tourism centre stage as part of Ireland’s route to recovery. ‘The Gathering’ – a year-long programme of events, festivals and fun designed to bring over 300,000 additional visitors to Ireland in 2013 – was unveiled.

Speaking at the launch of the Fáilte Ireland initiative, billed as the biggest tourism event ever staged in Ireland, Minister Varadkar said “It’s an opportunity for people at home and abroad to play a part in Ireland’s renewal, and help to rebrand Ireland on the world stage”.

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

> Current Market Conditions & Outlook
> Currency Watch
> Transport Updates
> Travel Industry News
> Economic Updates

 

CURRENT MARKET CONDITIONS & OUTLOOK

 

 

2011 visitor numbers in perspective
Visitor arrivals to Ireland were up 11.8% for the first 7 months, compared to same period in 2010, according to the latest CSO data. All source markets show an increase on last year with numbers from mainland Europe up 13.7%, from North America up 13% and from Britain up 9.3%. The Irish outbound market remains soft with a 3% drop on last year. Total passenger movements in August would suggest a slowing down of growth – a trend that is reflected in international passenger traffic by airlines and other industry sources. Aer Lingus reported at the end of September that passenger volumes “have now stabilised” compared to 2010.Despite the welcome return to growth in visitor arrivals, inbound tourism is still almost 20% below three years ago.

% Change in number of visitors to Ireland January – July

2011 v 2010
2011 v 2009
2011 v 2008
Britain
+9.2%
-14%
-27%
Mainland Europe
+13.7%
-10%
-16%
North America
+13.0%
+3%
-2%
Other Areas
+18.0%
+17%
n/c
TOTAL
+11.8%
-9%
-19%

Source: CSO

 

Dublin hotels continue to bounce back
Room occupancy in August at 89.5% was 8 percentage points up on last year, with the average room rate (ARR) up 8.6% to just under €124. Revenue per available room (revPAR) was €110.87, according to the latest HotStats survey by TRI Hospitality Consulting. Year to date Dublin hotels have achieved room occupancy of 77.2% and RevPAR of €98.16.

 

Outbound travel from Britain shows only marginal growth
The first 7 months of 2011 have seen a 1.8% increase in trips compared to the same period a year ago. VFR demand has been more buoyant than holiday trips which are up 1.5%. The growth this year has been to Europe or North America with rest of world down 3% – perhaps impacted by the higher APD.

 

Outlook more positive in France & Germany than in UK
While demand for leisure travel from UK, Germany & France this year has been on the increase, not all of these markets are feeling positive about the next twelve months.According to PhoCusWright’s European Consumer Travel Report Second Edition consumers in the UK are showing distinct signs of uncertainty which points to, at best, a stagnant level of demand going into 2012. The mood amongst German and French consumers is more positive with well over twice as many travellers planning to spend more on trips as against less over the next twelve months.

 

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CURRENCY WATCH

Source: Central Bank – monthly average
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TRANSPORT UPDATES

 

Update on Air Services
Aer Arann suspends Galway services for
winter season
The airline is to suspend its services at Galway Airport for the winter season with effect from October 31st. The suspended Galway routes will be between the airport and London Southend, London Luton, Manchester, Edinburgh and Waterford.
Passengers with confirmed booking for flights after these dates will be contacted directly by Aer Arann about their travel options.

Cut in Northern Ireland APD secures future of Continental serviceAir passenger duty (APD) for direct long-haul routes from Northern Ireland airports has been reduced from £60 to £12 per passenger in economy and from £120 to £24 for business and first class passengers. The recently increased UK tax had been threatening the survival of Continental’s Belfast- Newark service.

Lufthansa increases capacity on
Frankfurt service
Lufthansa will add capacity on its Frankfurt-Dublin service this winter operating all three daily flights with larger A321 aircraft, providing 17% more capacity compared to last winter.

Ryanair cancels Aberdeen routeRyanair is cancelling its Dublin-Aberdeen route from 29th October, blaming airport operator BAA.
Update on Sea Services
Fastnet Line cuts scheduleThe Cork-Swansea service, operated by Fastnet Line, has been cut from 3 to 2 round trips per week from mid-September. The new schedule, according to the company, will operate until June 2012.

New ship for Celtic Link’s France routeCeltic Link Ferries is replacing its ship on the Rosslare-Cherbourg route in October, offering a marginal increase in accommodation for tourist cars and passengers, while the schedule remains unchanged.

 

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TRAVEL INDUSTRY NEWS

 

aerlingus.com
83% of bookings for the first half of the year were through the airline’s website, with 88% on short- haul routers and 68% on long-haul routes.
The airline is seeking to expand its product offering through the website, such as pre-ordering meals, as a key part of its strategy to deliver discretionary, value adding products.

 

Red card for unfair practices of Expedia, TripAdvisor and Hotels.com
French websites of Expedia, TripAdvisor and Hotels.com are obliged to change their unfair practices with regard to provision of information on hotel availability and prices, according to a Paris Commercial Court ruling. “No rooms are available at the selected dates” on the websites was found to be only true for bookings via those particular sites, because rooms were still available via direct booking or other channels. This practice was found to be unfair and the websites were ordered to pay compensation to the French hotels.

 

Tourism chiefs sign new EU ‘Destination Europe’ agreement
A new agreement with the EU sets out the basis for strengthening the image and promotion of ‘Destination Europe’ in long-haul markets, using the slogan ‘Europe – the never ending journey’ and developing themed tourism products.The agreement between the ETC – European Travel Commission, the umbrella body representing National Tourism Organisations, and the European Commission commits to greater collaboration in promotion and research.

 

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ECONOMIC UPDATES

 

Europe
The outlook for consumer spending has worsened in recent weeks, particularly in the eurozone where consumer confidence declined further in September.As Europe struggles with the sovereign and bank debt crises, credit rating agencies downgraded Italian and Spanish government debt. However, while revising downwards economic forecasts for next year, analysts are still hopeful for positive growth.
UK
Britain’s economy risks slipping back into recession after barely growing in the third quarter.Consumer confidence remained firmly negative during September as they face the worst squeeze in living standards in over three decades. Soaring prices, higher taxes and low wage increases are eating into their budget. In an attempt to bolster the UK economy the Bank of England engaged in a new round of Quantitative Easing.
US
Consumer confidence failed to rebound during September.US Federal Reserve warns that the US economy faces ‘significant downside risks’. Unemployment remained at 9.1% in September, but the number of jobs created was above expectation at 103,000. Even as the US economy continues to grow, but at a slow pace, it is vulnerable to a new downturn. Moody’s Analytics’ chief economist notes that the macroeconomic outlook remains tenuous, with the probability that the US will see a recession over the next 6 to 12 months at 40%, due to the European debt crisis, the US foreclosure crisis and Washington’s rift over fiscal policy as the principal threats to economic recovery.
Ireland
Irish GDP looks set to grow by around 1.5% in the current year, driven mainly by exports, although growth in this sector is decelerating. However, consumer confidence and spending remains weak, with the latter expected to fall by up to 3% in 2011, due to a significant squeeze on real incomes.Inflation has accelerated while earnings are still falling, and higher mortgage rates dent confidence. Continuing uncertainty and concern about the upcoming Budget is likely to continue to depress consumer spending.
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