Tourism sector sentiment, on the rise for the last few years, may now be plateauing as concerns about Brexit take hold. According to Fáilte Ireland’s latest Tourism Barometer Survey, published today, business sentiment across the tourism sector remains buoyant but there is evidence of optimism tempered by caution within the industry as 2016 ended and attention turned to 2017 - fuelled mainly by the uncertainties around Brexit.
Tourism Business Sentiment 2007-2016
% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Up 45 14 15 28 39 48 68 75 80 76
Same 24 18 11 25 31 26 21 17 18 19
Down 31 68 74 47 30 26 11 8 4 5
Fáilte Ireland’s ‘Tourism Business Sentiment Index’ (reflecting 2016 performance and 2017 expectations) shows that, for the first time in years, there has been a slight drop in positive sentiment. While three quarters (76%) remain confident about their business, the upward trend seen since 2010 has not continued.
With respect to 2017 and the year ahead, today’s Barometer Survey indicates that two thirds (64%) of paid serviced accommodation providers (PSA) expect their business to further increase next year. Hotels and visitor attractions are the most optimistic sectors with 67% expecting to build on growth in 2017.
Fáilte Ireland Brands Playing their Part
Interestingly, the various Fáilte Ireland destination brands appear to be contributing to much of the confidence in the sector regarding next year’s activity. Four in five (80%) accommodation providers along the Wild Atlantic Way say that the brand will be positive for them next year. The newer Ireland’s Ancient East brand is also expected to have a positive impact for 57% of operators within the region it covers. In Dublin, half (50%) of responding operators in the capital say that Dublin: A Breath of Fresh Air will benefit their business in 2017.
Revenue and employment Rose in 2016
Almost 80% of accommodation providers reported increased profitability in 2016, rising to 82% among hoteliers. As visitor numbers increased across the industry, so too did employment levels. Encouragingly, a quarter (24%) of respondents took on more full time staff this year, including 39% of hotels. Additionally, a third (32%) of respondents employed more part time and seasonal staff in 2016 compared to last year. Again, the sector taking on more part time and seasonal staff was the hotel industry, with nearly half (47%) reporting increases in both and reflecting record activity during summer 2016.
Speaking today, Fáilte Ireland Chairman Michael Cawley said:
“While 2016 delivered an impressive performance, we need to remember that much of this growth has been fuelled largely by factors external to the tourism industry, not least increased air access into the island. As a small open tourism economy, we are at the mercy of external events and the unexpected Brexit and US presidential results – with their potential for volatility – have certainly softened the cough of anyone tempted to be complacent.
“We need to stay awake at the wheel and get a grip on those factors we can control. We need to keep our competitiveness, develop further our current stable of branded visitor experiences and ensure that we target those overseas markets which offer the most reliable returns in the near future.”
External Shocks
Brexit dominates as a concern for tourism businesses going into 2017, mentioned as an issue for 64% of respondents to the Tourism Barometer. Many businesses feel that British and Northern Ireland tourism demand will be dampened by the impact of the Brexit process on exchange rates in the short to medium term.
Commenting on the challenges of Brexit for the coming season, Mr Cawley said:
“The British market is set to be challenging in the near future, particularly given the weakening of Sterling. Indeed, in Q3 2016, our own Fáilte Ireland research indicated that value for ratings amongst British visitors dipped from 58% to 50%. We will still target the British visitor but tourism businesses overly reliant on that market should seek to diversify their trade.
“There is further growth in access capacity anticipated from Europe and North America this season and there is great potential to grow further in those markets. It makes business sense, American and Europeans stay longer and spend more per capita. Europeans, particularly those in the Eurozone, are not subject to the vagaries of currency fluctuations and, thankfully, seem to really like what we have to offer in terms of visitor experiences.”
To read the full version of the latest Fáilte Ireland’s Tourism Barometer click [HERE]
ENDS
For further information please contact:
Alex Connolly
Head of Communications
086 7966320/01 8847884
EDITOR’S NOTE
Fáilte Ireland
Fáilte Ireland, the national tourism development authority, was established in 2003 to guide and promote tourism as a leading indigenous component of the Irish economy.
The tourism and hospitality industry employs an estimated 220,000 people and generates an estimated €5.7 billion in revenue a year.
TOURISM BAROMETER – KEY POINTS
While overall, tourism businesses have enjoyed another year of significant growth, tourism businesses approach 2017 with more restrained optimism – based on uncertainty surrounding significant global events such as Brexit and the impending change of administration in the White House. That said, the industry is still upbeat on balance looking to the year ahead.
Many sectors expect to see an increased number of visitors, compared to this year. Good proportions also expect to welcome similar numbers as in this strong year.
Repeat visitors (68% cite this as a positive for 2017), Irish people holidaying in Ireland (50%) and The Wild Atlantic Way (49%) are expected to positively affect businesses in the coming year.
The coming 12 months look bright for hotels, with two thirds (67%) expecting an overall increase in visitors. Repeat visitors are expected to have a positive impact on 71% of businesses. Business from North America is expected to pick up for 63% of hotels. Many operators say that the exchange rate and perceived safety of Ireland as a holiday destination will have a positive impact on the number of Americans heading to the country.
While a third (33%) of B&B operators expect to receive more visitors next year, more than half (57%) predict similar numbers. And the majority of operators look to the Island of Ireland with caution, with 74% expecting the same level of business from ROI and 60% expecting a similar level of visitors from Northern Ireland.
As visitor numbers increase across the industry, so too do employment levels. Encouragingly, a quarter (24%) of respondents have taken on more full time staff in 2016, including 39% of hotels.
And a third (32%) of respondents employed more part time and seasonal staff in 2016 compared to last year. Again, the sector taking on more part time and seasonal staff is the hotel industry, with nearly half (47%) reporting increases in both.
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