Ireland’s tourism industry is currently a €10 billion indigenous industry composed predominantly of regionally dispersed SMEs and employed almost 300,000 pre-pandemic according to the CSO. Up to 2020 tourism had been one of country’s best performing sectors, returning eight consecutive years of rapid growth. The Covid crisis hit the industry particularly hard but, with generous Government support, the sector managed its survival and has bounced back from the economic ravages of the pandemic. Demand from overseas and domestic markets is reported as making a resilient recovery in 2023. Tourism has long been one of Ireland’s success stories with an established worldwide reputation for hospitality. Forecasts for renewed growth in international travel are positive despite the current geopolitical situation, including the war in Ukraine, and economic headwinds.
Vision 2030: An Industry Strategy for Tourism Growth, prepared by the Irish Tourism Confederation (ITIC) following extensive consultation across the business community, presents a pathway to an exciting and ambitious future for the sector. The industry is confidently positive about the future, as witnessed by the scale on ongoing capital investment commitments by the private sector. This is despite current cost and staffing pressures and significant supply bottlenecks facing businesses. Tourism can positively contribute to meeting Ireland’s commitments on climate change and delivering on the UN Sustainable Development Goals.
2030 will see Ireland as a leader in sustainable tourism growth, delivering a unique visitor experience which delivers regional economic growth based on value over volume, while respecting environmental, social and community values.
An Ambitious Growth Trajectory
Tourism earnings in 2030 could rise to €15 billion, employing up to 350,000 people, and yielding up to €3.5 billion annually to the Exchequer.
The projection of a 50% increase in the value of the sector with the volume of domestic and international visitors growing by circa 24% with a significant growth in the share of holiday visitors, including new value-added segments to boost revenue, together with an improved spread of demand throughout the year.
It is estimated that increased capacity to cater for the growth in demand would require 14,000 additional tourist accommodation rooms and up 7 million additional seats on air and sea transport. Initiatives by industry, combined with State support in terms of resources and enabling policies, can see tourism’s carbon emissions reduce significantly.
Growth in global international travel is forecast to reach 2 billion trips by 2030, compared to 1.4 billion in 2018, according to the UN World Tourism Organisation (UNWTO), representing over 11% of the global economy. The pandemic has reinforced an enduring desire to travel, with some emerging trends in people’s travel motivations and behaviour, despite current cost of living pressures. Greater emphasis on personalised travel experiences is amongst the discernible trends, together with a greater emphasis on value rather than price, in keeping with a growing respect for actions to address environmental issues.
Tech-enabled travel is empowering the consumer, with adaptation levels accelerated by the pandemic. Customisation of the travel experience is being driven by the tech giants delivering more products for frictionless access to personalised options. The evolution of augmented and virtual reality technologies is fast changing the way consumer plan and experience travel.
Ireland is well positioned to successfully exploit the changing market opportunities:
- the appeals and attractions of Ireland are well aligned with the increasing focus on unique immersive experiences based on nature, culture, heritage, and people;
- a highly competitive network of access routes by airlines and ferry companies, led by major Irish carriers;
- a proven broad source market portfolio, together with emerging added value prospects.
Realisation of the tourism opportunities is not without its challenges. The top challenges facing the industry, include:
A threat to competitiveness: Ireland as high cost economy competes on value rather than price in the international marketplace. However, the recent rate of inflation in business input costs, coupled with the high VAT, excise and other tax rates, seriously threatens the competitiveness of the Ireland tourism product and the ability of business to deliver what the overseas visitor rates as good value for money.
A staffing crunch: Tourism and hospitality is a labour intensive business with the quality of personal service a key determinant of value. Ireland’s tight labour market has accentuated the recruitment, retention, and skill development of personnel. The result for many businesses has been an enforced limit on trading. The industry is crucially aware of its responsibility to improve the attractiveness and career opportunities on offer.
Supply side constraints: The primary constraint is on guest accommodation supply. Latest estimates indicate that at least 20% of the country’s tourist accommodation stock is currently under Government contract to provide housing for those seeking refugee from the conflict in Ukraine and arrivals from other troubled areas seeking International Protection. As tourist accommodation is designed or suitable for long stay living, the Governments over reliance on tourist accommodation to meet its humanitarian obligations is not sustainable.
The Sustainability Imperative
The pandemic and global warming are reshaping consumer values with an increasing focus on ensuring the sustainability of the planet. Improving societal and environmental conditions while delivering economic benefits are central to sustainability. Sustainability is forecast to be a big segmentation factor for winner and losers in tourism.
Sustainability is expected to at the core of the Government’s new national tourism policy is due by year end. Sustainable tourism, as defined by the UNWTO includes economic, social and environmental sustainability and co-existence of all three pillars can be difficult. The industry is very conscious of its responsibilities in delivering on environmental objectives, with a number of innovations already underway. The challenge is real with many tourism and hospitality enterprises falling under the commercial buildings and built environment sectors which has a 40%-45% target of reduced emissions by 2030.
An analysis of the challenges leads to a number of conclusions and recommended actions to enable the industry to capitalise on the opportunities to achieve sustainable growth, and to deliver the ambitious economic projections by 2030. The key actions centre around 7 pillars namely: Sustainability, Competitiveness, Connectivity, Skills & Careers, Supply Constraints, Investment, and Policy & Support Framework. The 38 actions within these pillars can be seen here and collaboration across Industry, Government and State Agencies will be key to success.