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