No time for hubris in tourism sec­tor as num­ber of UK vis­i­tors falls ‘like a stone’

Irish Independent - Business Week - - BUSINESSWEEK -

WE shouldn’t be sur­prised to hear that the num­ber of Bri­tish vis­i­tors to Ire­land is fall­ing. Yet, when DAA chief ex­ec­u­tive Kevin Toland, told the Euro­pean Par­lia­ment this week that num­bers were “fall­ing like a stone”, it should make every­one sit up and take no­tice.

What­ever hap­pens with Brexit in the years ahead, it is rea­son­able to think that ster­ling is not go­ing to rise sig­nif­i­cantly in value any time soon. So this prob­lem isn’t go­ing to go away.

Real in­comes in the UK are fall­ing as inf la­tion has be­gun to out­strip wage in­creases. That sit­u­a­tion is likely to get worse as the econ­omy moves to­ward re­ces­sion. Busi­ness in­vest­ment is slow­ing down, as is job cre­ation while the cost of liv­ing is ris­ing.

So there isn’t any good news on the hori­zon that would make us think more Bri­tish tourists are go­ing to ar­rive rather than less.

The 4.45m vis­its last year dwarfed North Amer­ica with 1.4m and main­land Europe with 3.1m. Col­lec­tively Bri­tish vis­i­tors last year spent around €1.1bn in Ire­land.

They tend to ar­rive in the off-sea­son with 22pc of them land­ing be­tween Jan­uary and March and a fur­ther 23pc be­tween Oc­to­ber and De­cem­ber. Com­pare this with just 13pc of North Amer­i­cans ar­riv­ing be­tween Jan­uary and March.

Bri­tish vis­i­tors spent €112m in the South East last year and a fur­ther €120m in the bor­der coun­ties.

They spent €200m in the South West and €128m in the Mid­lands.

The Bri­tish spent just one third of all of their tourist money in Dublin com­pared to North Amer­i­cans, where one half of their to­tal spend went to the cap­i­tal.

So they are a vi­tally im­por­tant mar­ket for tourism jobs right around the coun­try.

Ire­land has sev­eral re­sponses it can make to this is­sue. One is do noth­ing and as­sume with a kind of Celtic Tiger hubris, that be­cause over­all vis­i­tor num­bers are grow­ing, every­thing is go­ing great.

An­other op­tion is to specif­i­cally tar­get the Bri­tish mar­ket to re­tain as many of these vis­i­tors as pos­si­ble. We can see they are price sen­si­tive be­cause hun­dreds of thou­sands of them will not be com­ing this year be­cause it sim­ply got too ex­pen­sive.

The tourism agen­cies ap­pear to be on top of this. Failte Ire­land knows the value of the Bri­tish mar­ket and in its tourism barom­e­ter in April, some 25pc of firms said they had seen an im­pact from Brexit/ster­ling.

But it re­mains a chal­lenge for busi­nesses in the sec­tor. It is the same prob­lem across other sec­tors and prac­ti­cally ev­ery Ir­ish ex­port­ing com­pany. In­ward tourism has the same im­pact on the econ­omy as ex­ports.

In the face of Brexit should they ag­gres­sively go af­ter new mar­kets in con­ti­nen­tal Europe or fur­ther afield as they re­alise they have been too de­pen­dent on the Bri­tish mar­ket? Or do they dou­ble their ef­forts to im­prove what they have with the UK? It isn’t so much about aban­don­ing the Bri­tish mar­ket as fac­ing the re­al­ity that the mar­ket is chang­ing. Just as ex­porters would be fool­ish to turn their backs on the Bri­tish mar­ket, tourism in­dus­try op­er­a­tors should think in a sim­i­lar way.

Dou­ble your ef­forts or look else­where? Take Ryanair for ex­am­ple. Ex­perts in un­der­stand­ing their cus­tomers’ be­hav­iour, the low cost air­line wasted no time in “piv­ot­ing” growth away from the UK af­ter the Brexit vote.

It has not ex­panded its UK ca­pac­ity but fo­cused more at­ten­tion on other mar­kets. In the case of Dublin, it said it would cut ca­pac­ity by around 1,900 f lights in the sum­mer of 2017, some of which would of course be to the UK.

Ryanair has around 40 mil­lion pas­sen­gers go­ing in and out of the UK and it could see from very early on that things were go­ing to get tougher there. And this is just the be­gin­ning.

Tourists in Clon­mac­noise, Co Of­faly: Bri­tish vis­i­tors col­lec­tively spent €1.1bn in Ire­land last year, two-thirds of it out­side Dublin

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