October 2013

The past two weeks have delivered much good news for Irish tourism. The Government’s 2014 Budget boosted the industry’s competitiveness by retaining the lower 9% VAT rate, removing the €3 Travel Tax and providing €8 million for the new Wild Atlantic Way.

Latest results from the CSO show that overseas tourism is having one of its best years since 2007, with arrivals for the first 9 months up 6.4 % Visits from North America are at an all-time high, while arrivals from mainland Europe continue to grow, although more modestly, and visitors from Britain appear to be on the turn after many years of dismal performances. Perhaps more importantly the data on the first half of the year show that earnings from tourism were up 8% in nominal terms,and there is an 8% increase in the number of visitors coming here for holiday/leisure. The welcome upturn is, however, still some way off a full recovery from the deep downturn of the past 5 years, but the direction is promising.

Fáilte Ireland’s latest tourism barometer, taken before the Budget announcements, shows business sentiment within the sector has increased significantly to a high not seen since the boom years.

Is the upturn, due as many would claim, to The Gathering, which undoubtedly stimulated increased visitor numbers, or is it due to improved competitiveness, more effective marketing, and/or more access? No doubt surveys will show substantial numbers arriving for The Gathering and suggest that the turn around this year, particularly from the diaspora markets, is the direct result of the initiative. Others will argue that Ireland is getting back on track with a more competitive offering and that the investment in destination marketing is beginning to pay off. The debate continues. A precise and conclusive answer is probably elusive. However, the policy review currently underway needs to address the issues surrounding the level and use of funds invested each year in marketing Ireland. On the face of it, the incremental return on the investment from The Gathering is far in excess of the average return on the approximate €40 million annually invested in destination marketing. But of course the issue of determining how to maximise the return on marketing investment for the destination is far more complex.

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





There was widespread welcome for the decision by Finance Minister Michael Noonan to retain the lower 9% VAT rate for the hospitality sector in Budget 2014. An extensive lobbying campaign had been spearheaded by ITIC, with strong support from Fáilte Ireland, the Restaurants Association of Ireland, the Irish Hotels Federation, IBEC, Chambers Ireland, and others. Our campaign was based on facts and logic.

Brendan Howlin TD – Minister for Public Expenditure & Reform and Michael Noonan TD – Minister for Finance


The original initiative came from Minister Noonan in the Government’s Jobs Initiative of May 2011, when he reduced the prevailing rate of 13.5% to 9% as a stimulus to kick-start growth in tourism. It worked. The industry passed on the reduced rates, significantly improving competitiveness in the process. Demand started to recover and most important of all from the Government’s perspective, 15,000 new jobs were created over the following year and a half. Lower taxes drive growth, a long established economic fact, so everyone can now reasonably look forward to continued growth and further job creation.

But while the case for continuing the lower rate was incontestable, the Industry recognises the courage and vision of Minister Noonan in so doing. He had seriously difficult choices to make in Budget 2014, and in this case he chose wisely and well to continue the stimulus for tourism.

Additionally he announced plans to zero rate from April 2014 the current €3 airport departure tax. This is a very significant stimulus, long sought by the airlines as a precursor to adding new routes, with Ryanair responding by launching 8 new routes from Shannon, several of which are significant potential to bring more tourists to the west, particularly Munich, Paris, Nice and Berlin



Just over 5.4 million visitors from overseas arrived in Ireland over the first 9 months, a 6.4% increase on the same period last year or 327,000 additional visitors. The long haul markets proved to be the more buoyant, with a 14.6% increase in visits to 935,000 or an additional 119,000 visits from North America, and a 13.7% increase or an additional 40,000 visits in arrivals from the rest of the world to 334,000. The rate of increase from the closer-in markets was more modest but equally welcome in volume terms, with 2.2m arrivals from Britain representing a 3.5% increase or 74,000 more visits. Visitors from mainland Europe reached just over 1.9m, a 5% increase on the previous year or an additional 93,000 visits. The level of growth has varied across Europe, with only Italy showing a downturn.

Demand over the peak July to September period was particularly brisk, reversing a disappointing performance over the same period in 2012. Total arrivals were up 7.8%, with a very heartening 9% increase in arrivals from Britain, continuing the upturn in demand seen in more recent months. Demand from mainland European source markets was mixed, with an overall sluggish growth of 1.2%. North American arrivals continued to be strong with a year on year increase of 13.6%. Arrivals from the emerging or developing markets from around the world were up a whopping 24.5% over the period.



The latest release from CSO providing more data on Q2 2013, published in mid-October, provides some further analysis of the performance of inbound tourism over the first half of the year. The principle findings include:

  • Of the 3,145,000 overseas visits, 1,328,000 were for holiday, an increase of 7.6% on the same period a year earlier. Business visits amounted to 619,000, up 4%, while VFR visits at 881,000 were up 3%. Interestingly, holidays as a share of arrivals increased from North America, but remained unchanged from Britain, Germany and other area, while declining from France, Italy and other Europe.
  • Total revenue from overseas tourism was €1,311 million plus €380m in fares paid to Irish carriers, giving a total of €1,791m, a 7% increase in nominal terms on the same period a year earlier. The main source markets, with the exception of Britain produced double digit growth in receipts – North America + 11%; Europe + 16% and Other Areas +13%, with Britain down 4%.
  • Q2 data shows that the average length of stay was largely unchanged at 7 nights, with a marginal decrease in stay by British visitors to 4.3 nights but marginally up for holiday visits from Britain to 4.9 nights. The average length of stay from mainland Europe also increased marginally to close to 9 nights. Average stay by North Americans appears to have slipped to 7.9 nights from 8.6 nights, with visitors from further afield staying on average between 11 and 12 nights.
  • Q2 bednights by overseas visitors amounted to 13.3m. compared to 12.7m a year earlier, up 7%. Hotel bednights increased by 7.5% to just under 4.5m, of which 3.2m were from holiday visits, and 740,000 from business trips. The number of bednights spent in Guesthouse/B&B was largely unchanged while demand for rented and other accommodation increased. There was a 5% drop in the volume of nights spent with friends and relatives.


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Ryanair 8 new routes from Shannon to Berlin, Faro, Fuerteventura, Krakow, Munich, Nice, Paris and Warsaw effective April 2014. Frequency between Shannon and Stansted is also being increased.

United adds more flights Chicago-Shannon with a longer summer season next year from May 22nd to September 14th and increasing from 5 departures per week to daily from June 16th to August 16th.


Germanwings Düsseldorf to Dublin will operate 4 departures per week next summer, replacing Eurowings on the route and doubling frequency.

Ryanair goes more customer friendly rolling out reduced baggage and boarding card fees; allowing a 2nd carry-on item and operating ‘quiet flights’ from 9pm to 8am. The airline will also introduce a 24 hour grace period to correct any ‘minor errors’ to booking on Ryanair.


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Tourism Ireland’s use of social media scores top ranking amongst European National Tourism Organisations (NTOs), according to a new report from Digital Tourism Think Tank. Tourism Ireland also ranked 3rd for its use of Twitter. The report did not rank the effectiveness of NTO web sites or online promotional campaigns but does include some best practice examples from other tourist boards and non-tourism companies. www.thinkdigital.travel


16.5m passengers have passed through Dublin Airport from January to September. Traffic was up 4% in September to almost 1.9 million passengers. European routes were the busiest with just over 1m passengers, a 2% increase on the same month last year. Traffic on cross-channel services increased by 5% to 612,000, and in transatlantic passengers increased by 10% to 197,000. Middle East routes carried 45,000 passengers, up 2%, while domestic traffic grew by 2% to 7,000.


The number of US Homeland Security officers is being increased and more space is being provided by the DAA, to cope with additional flights. All US flights this winter will pre-clear at Dublin and the expanded facility will help boost Aer Lingus’ drive to attract more connecting traffic to its transatlantic services. During the recent summer season it was not possible for all US flights to pre-clear at Dublin due to the level of staffing at the US Customs and Border Protection (CBP) facility, which is unique outside of the Caribbean and Canada.


The recently announced plans by the British Government to make visits to the UK more accessible to tourists from China, should have a knock-on benefit for Ireland. Under the Irish Visa Waiver Programme, which began in 2011, tourists of 17 countries, including China, can freely travel to Ireland on an entry visa to the UK.

The changes which will make the process of acquiring an entry visa to the UK less cumbersome aimed at facilitating more Chinese to visit Britain will broaden the pool of potential Chinese visitors who can avail of the Common Travel Area between the UK & Ireland.


An estimated 5 million trips by Irish residents over the first 9 months of the year, was only marginally ahead of the same period last year, an increase of 0.6% or 28,000 more trips. Outbound travel over the July-September quarter measured 2m trips, up 1.5% on the same period in 2012, according to the latest CSO release. Travel by Irish abroad is still 20% down on the peak year in 2008.

Holiday visits broke monthly records for the fourth consecutive month in August, with the UK welcoming the most inbound holiday visits ever in a single month. Over the last 12 months spend by overseas visitors has reached a new milestone of £20 billion. August visitors spent only 1% less than the record seen in August 2012 which is impressive given the average spend of Olympic Games-time visitors was particularly high.


Clothes and sporting goods followed by travel & holiday accommodation are the most common online purchases, with nearly 60% of internet users reporting that they had shopped online. The latest data from Eurostat for 2012 shows that 75% of individuals aged 16 to 74 in the EU had used the internet in the previous 12 months. The highest user shares of online shoppers were in the U.K (82% of internet users), Denmark and Sweden (both 79%), Germany (77%), Luxembourg (73%) and Finland (72%), and the lowest in Romania (11%), Bulgaria (17%), Estonia and Italy (both 29%).

One third of internet users purchased clothes & sports goods and booking travel & holiday accommodation in 2012, up from 21% in 2008. Sweden (60%) had the highest proportion reporting that they booked travel & holiday accommodation online, followed by Denmark (56%).


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The eurozone has been stuck in the red this year waiting for its austerity-first policies to pay off debt, but next year a return to growth is expected. Challenges remain however, public debt, and in some countries private debt, remain very high, as does unemployment.

Germany’s private sector grew at the slowest pace in three months in October, signaling that Europe’s largest economy is expanding, but only moderately. Purchasing Managers’ Index (PMI), which tracks growth in both the manufacturing and services sector and covers more than two-thirds of the economy, while showing growth for the sixth consecutive month slipped in October, as the services sector performed less well than expected. Europe’s lead economy, which expanded 0.7% in the second quarter, after a subdued start to the year, is expected to slow in the third and fourth quarters, due largely to poor performance of the domestic economy, based on cautiousness amongst consumers, and revised downwards export growth expectations.


Britain’s economy is growing at its fastest rate in more than three years after a 0.8% increase in national output in the quarter to September. The latest preliminary figures from the Office for National Statistics show that economic activity increased across the board with production, construction, services and agriculture all registering growth. Despite the expansion – the second strong quarterly performance in a row – the level of gross domestic product remains 2.5% lower than it was when Britain’s deepest recession since the late 1940s began at the start of 2008. Activity in the service sector, which makes up more than 75% of the economy, is now above its pre-recession peak, but output in construction and production remain more than 12% lower. While the continuing growth in output and falling unemployment dispel fears of a triple dip recession, a disappointing drop in exports, particularly to Europe, coupled with a drag on consumer spending suggest a long path of modest recovery over time.


The September jobs report was disappointing adding 148,000 new jobs instead of the expected 185,000, but stocks rose on the anticipation that the Fed would maintain its stimulus efforts well into 2014.

Retail sales are reported to have stalled in September, as car sales slumped, suggesting a cooling of the economy even ahead of the Government shutdown which undoubtedly hit consumer confidence and spending. Retailers from Macy’s and Nordstrom to Wal-Mart missed second-quarter sales estimates and have cut their forecasts.

The 16 day shutdown of the Federal Government has dented the economic recovery and damaged consumer confidence as they spend at a slow pace. At the same time, rising home values and stock-market gains are helping repair household finances. The level of holiday spending over Thanksgiving and Christmas periods will be closely watched to gauge consumer spending behaviour.


Consumer confidence reached a six-year high in September, the fifth consecutive month of increase, according to the ESRI/KBC monthly survey. The results suggest that consumers anticipate some improvement in the domestic economy over the coming year. The sentiment index was compiled before the recent budget and despite the improvement in consumer confidence indicates that the consumer is still cautious and cash constrained. The upswing in confidence is attributed to more positive news on the economy, although recovery is still tentative, together with improvement on the jobs front and more buoyant property sales.

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