Tourism Industry Upbeat on 2012 Prospects But No Room For Complacency

Pictured at today's annual Review and Outlook briefing are (l. to r.) Redmond O'Donoghue, Chairman and Shaun Quinn, CEO, Fáilte Ireland

Tourism Industry Upbeat on 2012 Prospects But No Room For Complacency

Confidence Boosted by Rise in Visitor Numbers in 2011
 

For the first time in three years, the Irish tourism industry is optimistic about its prospects for the year ahead. However, despite an increase in overseas visitors in 2011, Fáilte Ireland today cautioned against any complacency at its annual End of Year Review and stressed that consumer confidence remains fragile and improving value for money will continue to be central to regaining our share of key markets. 

Fáilte Ireland Chairman, Redmond O’Donoghue said -

“Although 2011 was an encouraging year in some respects, there is no room for complacency. Tourism has worked hard to regain its competitiveness. This is always a difficult and painful task and it will be necessary to continue this process in 2012 and beyond. We in Fáilte Ireland will be doing all we can to support tourism businesses to regain market share and sustain employment.

“Furthermore, we will continue to identify opportunities to get the most out of this country’s inherent appeal to provide compelling reasons for more and more overseas visitors to come here. This is critical in the context of increasing the amount of badly needed foreign revenues and increasing employment levels”.

PROSPECTS FOR 2012

The expectation within the tourism industry for 2012 is for increased business from all of our major markets. There are strong indications that Irish people will holiday at home in greater than ever numbers this year. With regard to our overseas markets, there are expectations of further recovery from the United States market in 2012 and optimism regarding the likely business from continental Europe, particularly Germany. The recovery of our market share within the critically important British market remains a key priority for everyone in tourism.

Many tourism enterprises are optimistic regarding their own prospects for 2012. Almost half (46%) of accommodation providers expect the volume of their overnight business to be up and a further two in five expect at least the same level of business. The hotel sector in particular is confident of increased volumes from both the overseas and domestic markets. Other types of accommodation expect their level of business to be on a par with 2011.

Fáilte Ireland’s CEO, Shaun Quinn, pointed out that the tourism industry was now in good shape to fight for business in the year ahead. Fáilte Ireland’s own research illustrates just how flexible tourism businesses have been in order to win back business.

Over the last year:

• eight in ten businesses have increased their sales and marketing efforts;
• seven out of ten reduced their operating costs;
• 71% of businesses offered more competitive prices;
• approximately half of them targeted new markets, introduced new products or changed business processes.

Mr Quinn also pointed to continuing improvement in value for money as a key factor in the drive to improve market share in the year ahead. Overseas visitors’ perception of the value for money that is available in Ireland continued to improve throughout 2011 and, while the perception of value has been an issue for British visitors in recent years, better offers from the trade and a weakening of the Euro have helped. The perceived value of eating out, drink and the cost of living also improved significantly in 2011.

For example, in research conducted among overseas holidaymakers during the summer months of 2011, one in four stated that the overall value that they experienced in the area in which they were staying was very good, while a further two thirds said that it was good. Only a small minority of holiday visitors felt that the overall value in the area where they stayed was poor.

Furthermore, preliminary indications from Fáilte Ireland’s Survey of Overseas Travellers are that satisfaction with value for money is at its best among French and German visitors since the introduction of the Euro ten years ago. Research also indicates that satisfaction with the cost of eating out, drink and the cost of living in Ireland in general has risen considerably compared to 2010.
Other positive factors which will underpin tourism in the year ahead include:

• more effective marketing by tourism businesses themselves which will complement strong marketing campaigns by the tourism agencies;
• improved international access to Ireland;
• a strong programme of national events;
• further new investment in tourism attractions;
• the maintenance of the 9% VAT rate recently introduced by the government.

Mr Quinn emphasised -

“The sluggishness which crept in during the boom is now gone and the tourism industry has proven to be innovative, flexible and hungry to win new business while maintaining its high level of quality and standards. This bodes well for revenue and jobs down the line.”

“However, while the industry has performed exceptionally well around those factors within its control, the greatest threat to a recovery comes from factors beyond our influence. There was some softening in our overseas numbers in the last quarter of 2011 and I don’t think it was a coincidence that this dovetailed with tremors in the global markets. Tourism is an export business and one whose fortunes are heavily influenced by consumer confidence. Any downturn in the global economy – or even significant fears about a downturn - has the potential to undermine the fragile recovery made so far in Irish tourism”.

Mr Quinn also noted some home-made factors which continued to be of concern to tourism businesses - particularly fuel and energy costs which were cited by almost eight out of ten tourism businesses as an issue in 2011.

PRIORITIES FOR 2012

To bolster the current momentum in tourism growth, some of Fáilte Ireland’s key projects in 2012 will include:

• Working with Tourism Ireland and tourism industry leaders on Project Britain which aims to comprehensively review, revamp and reinvigorate our sales pitch to the UK market.

• Working with tourism businesses to help them ‘close the deal’ with their overseas markets. Fáilte Ireland will continue to provide tourism businesses with advice and insights into how to target and convert overseas business opportunities through its Sales Connect programme. In 2011, 640 businesses availed of the new programme during the year. 

• Given the indications that greater numbers of Irish families will not be holidaying overseas this year, Fáilte Ireland will be embarking on an aggressive home holiday marketing campaign to convert this potential into holidays at home. As well as a mixture of innovative marketing, exploitation of social media and an exciting mix of festivals, events and offers, Fáilte Ireland will be working with the industry to provide attractive value for money offers to Irish families.

• Supporting key tourism businesses to provide greater value for money. In 2011, Fáilte Ireland’s direct business supports helped almost 6000 businesses - with our internet marketing initiative helping almost 2000 small and medium enterprises to improve their online skills while our business and mentoring service worked with almost 500 clients in 2011.

• Building on the Governments ongoing commitment to significant investment in tourism infrastructure through the Fáilte Ireland capital programme to improve and broaden the appeal of Ireland’s portfolio of tourist attractions, activities and tourism related infrastructure. Last year, a further 21 projects were approved for almost €22m worth of funding, resulting in a current investment pipeline of some 44 projects with a cumulative value of €62m.

Additionally, a number of specific projects will kick start in 2012, including -

 - The work of the dedicated Project Board and Implementation Group to ensure all the necessary preparations are in place for The Gathering in 2013;

-  The introduction of a The development of a new major tourism initiative for the western seaboard – “The Wild Atlantic Drive”. Comprising of a themed and packaged driving trail from Donegal down to West Cork, this will be the first in a series of new major initiatives to completely redraw how we package and present ourselves as a destination;

o A new national Tourism Town Award to motivate Irish communities to get behind their local industry and do their part to lure visitors.

In particular, Fáilte Ireland will be devoting considerable resources and energy throughout this year towards the preparation for The Gathering in 2013. Designed as a year-long “festival of festivals to give Irish tourism and Ireland’s economy a major shot in the arm, it is estimated that the event will attract up to an additional 325,000 visitors to Ireland during the course of the year and generate an additional €223 million in tourism-related revenue for the island.

Previewing all the work to be carried out on the initiative in the year ahead, Mr Quinn explained -

“Due to be officially launched on St Patrick’s Day 2012, The Gathering will be the greatest undertaking ever in Irish tourism. There is now a Project Board and Implementation Group in place and work has now begun to harness the energy of communities at home and abroad to bring this initiative to life.

“As they set out to develop the details for Irelands biggest tourism event in 2013, time will be of the essence. Crucially, it is imperative that we get as many people and groups as possible on board, whether at local level or amongst Ireland’s diaspora. Fáilte Ireland will be doing everything we can to ensure this happens.”

TOURISM PERFORMANCE IN 2011

At today’s briefing, Fáilte Ireland welcomed the fact that total overseas visitors to Ireland increased by almost 6% in 2011 to 6.2 million and, with the inclusion of the home holiday market, total tourism revenue in 2011 is likely to reach €4.7 billion.

All of the main source markets for Ireland experienced growth in 2011. Visitors from Britain increased by almost 4% to 2.8 million, representing an improved share for Ireland as UK residents’ trips to Europe only increased by 1% when compared to 2010. British visitors accounted for 45% of all overseas visitors to Ireland in 2011.

Arrivals from Mainland Europe increased by 8% to 2.2 million and currently account for 35% of all international visitors.

Long haul visitors to Ireland also increased in 2011. North American arrivals grew by more than 5% to 900,000 and with United States citizen traffic to Europe estimated to be down in 2011, this represents a significant performance for Ireland compared to our competitors in Europe. Visitors from the other long haul markets also increased, by 9% in 2011, to more than 350,000 arrivals.

The increases in visitor numbers were reflected in the performance of the accommodation sector in 2011. Hotels were the strongest performers last year with room occupancy up overall, driven primarily by strong performance in urban areas such as Dublin, Galway, Cork, Killarney and Waterford. This increase in room occupancy was purely a result of increased sales as capacity remained on a par with 2010. The improved performance was most evident in higher grade, large hotels in major metropolitan areas.

Hotels enjoyed increased sales from both the overseas and Ireland markets with the overseas increase in line with the growth in international arrivals. The increase in domestic business indicates that the domestic short break market performed well in 2011, boosted by unparalleled value for money in room rates and Fáilte Ireland’s largest home holiday marketing campaign to date.

Trading conditions continue to be challenging for other accommodation sectors. Any modest increases in occupancy in the B&B, Guesthouse and Self Catering sectors are offset by the fact that these types of accommodation, being more flexible to demand, have cut back on capacity available in recent years. Another bright spot, apart from hotels, is the hostel sector which enjoyed increases in demand and occupancy in 2011.

Commenting on the performance of tourism in 2011, Chairman Redmond O’Donoghue, emphasised –

“This time last year, we asked – tentatively I might say – if 2011 would be the year that tourism’s fortunes finally turned and, today, I think we can answer that in the affirmative. However, this has been no lucky accident. Tourism businesses have had to break with the habits of the Tiger and embrace a different business model. Rates have been cut, sacrifices made and shoe leather has been worn out as the industry has pulled out all the stops to get visitors in the door.

“All that effort has brought us modest growth but no respite. Looking at the dark period that tourism has passed through, I am tempted to paraphrase Churchill in another context by saying that this is not the end, nor the beginning of the end, but merely the end of the beginning. There is a long road ahead and we will need to maintain value for money, market every opportunity and keep our eyes on the prize if we are to maintain last year’s momentum.”

The Chairman also referred to the visits of Queen Elizabeth and President Obama. Fáilte Ireland’s own research indicates that these events generated almost €300 million worth of publicity through some 37,795 separate print and broadcast pieces.

Mr O’Donoghue stressed -

“These visits were tremendous rays of good news for tourism after a period of gloom. We couldn’t have asked for a better platform on which to rebuild our industry. The visits by Queen Elizabeth II and President Obama were events of truly global significance. The trick now is to take advantage of this tremendous global coverage and ensure that we can continue to capitalise on the afterglow of these resoundingly successful visits.

“We know when people come here they like what they experience and, indeed, I hope that all those across the Irish Sea who were listening to the Queen’s speech after their Christmas dinner may just have become a little more curious about making their own visit here in 2012.”

ENDS

For further information please contact:

Alex Connolly
Head of Communications – 086 7966320/01 8847884

Louise Tolerton
Press Officer - 086 6086578/01 8847135

 
NOTE FOR EDITORS

Fáilte Ireland – How We Supported Tourism in 2011

Our direct business supports in 2011 helped almost 6000 businesses - with our e-business initiative targeting almost 2000 small and medium enterprises to improve their online skills while our business and mentoring service worked with almost 500 clients in 2011.  Our new initiative for 2011, Sales Connect, worked with 640 businesses during the year. 

In 2011, €3.62 million was allocated in direct financial support to festivals and events.  210 festivals and events were awarded through the national and regional grant programmes combined.

Continued progress was made throughout 2011 in supporting capital investment in the tourism industry with 22 projects approved for approximately €22.2m of grant assistance under the Tourism Capital Investment Programme.

2011 saw the continuation of Fáilte Ireland’s home holiday campaign. The €4m 40-week intensive marketing campaign used a mixture of innovative marketing and an exciting mix of festivals, events and offers to further position Ireland as a fun, exciting, enriching holiday destination and reinforce the existing perceptions of a destination that is both convenient and good value for money.

In 2011, Fáilte Ireland hosted over 40 group trade familiarisation visits to Ireland from 16 markets, offering over 550 key travel agents and tour operators the opportunity to experience first-hand our world class tourism product. Dedicated group trade trips for outdoor activities were particularly successful.  In addition, almost 1400 overseas media representatives from 18 countries were hosted in Ireland generating EAV of €270 million to date.    

Through our business tourism supports, 207 conferences were supported in 2011 bringing in an estimated 96,000 delegates and generating economic impact of €135m.
A hugely successful Solheim Cup was hosted in County Meath in September 2011. Over 90,000 spectators attended over the 5 days. The event, along with the opening and closing ceremonies, was watched worldwide by an estimated audience of over 400 million homes and 700 million viewers.

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