CHOPPY WA­TERS FOR IR­ISH TOURISM

2018 was a record year for Ir­ish tourism, but loom­ing on the hori­zon are ris­ing costs, Brexit un­cer­tain­ties and Airbnb re­stric­tions

The Irish Times - Weekend Review - - FRONT PAGE - Conor Pope Con­sumer Af­fairs Cor­re­spon­dent

As the cur­tain fell on a record year for Ir­ish tourism, the storm clouds were gath­er­ing like never be­fore. While those charged with bring­ing vis­i­tors to this is­land would have been en­ti­tled to raise a glass to toast a job well done, as the new year dawned they would also have been for­given for look­ing fear­fully at the year ahead.

Tourism is among the most im­por­tant el­e­ments of the Ir­ish econ­omy, em­ploy­ing more than 300,000 peo­ple and gen­er­at­ing bil­lions of euro in rev­enue – swelling the tax cof­fers by al­most ¤ 2 bil­lion each year. Last year tourism was worth more than ¤ 6 bil­lion, a 10 per cent in­crease on the pre­vi­ous year, while the num­ber of vis­i­tors climbed above 11 mil­lion, a 6 per cent jump on 2017, with growth recorded from all mar­kets.

“2018 is set to be an­other record year for Ir­ish tourism, sur­pass­ing all pre­vi­ous records and com­ing on the back of a num­ber of years of strong growth,” said Niall Gib­bons, Tourism Ire­land chief ex­ec­u­tive, as the good news was an­nounced in the run-up to Christ­mas.

While those work­ing in the sec­tor are up­beat, they are fear­ful too. The 4.5 per cent VAT in­crease for the hospi­tal­ity sec­tor came into ef­fect this week and will put pres­sure on all op­er­a­tors’ mar­gins and drive prices higher for con­sumers. Leg­isla­tive changes aimed at tem­per­ing the level of ac­com­mo­da­tion avail­able via the shar­ing econ­omy is com­ing down the tracks and could hit avail­abil­ity, caus­ing prices to climb and mak­ing the is­land less at­trac­tive for vis­i­tors.

Wage costs are climb­ing, and rents are soar­ing.

Brexit

But the most thun­der­ous black cloud is Brexit. Al­most as soon as the elec­torate in the UK voted to leave the EU, the dif­fi­cul­ties such a move would pose for the Ir­ish tourism sec­tor were iden­ti­fied. In terms of rev­enue, the largest mar­ket for Ire­land is North Amer­ica – the US and Canada – which gen­er­ates al­most ¤ 1.8 bil­lion each year. Bri­tain is big­ger in vol­ume terms and re­spon­si­ble for ¤ 1.45 bil­lion in rev­enue com­pared with about ¤ 1.2 bil­lion from main­land Eu­rope.

The over-reliance on vis­i­tors from Bri­tain, to­gether with the in­evitable de­cline in the value of ster­ling, is a real and present dan­ger.

Fig­ures pub­lished in the mid­dle of De­cem­ber con­tained both good and bad news on the Brexit front. The num­ber of vis­i­tors from the UK dur­ing the first nine months of the year ac­tu­ally climbed – al­beit by a mod­est 1 per cent – com­pared with the same pe­riod in 2017. But their spend­ing de­clined by 1 per cent.

The chief ex­ec­u­tive of Fáilte Ire­land, Paul Kelly, is all smiles when talk­ing about the year that’s been, as he sits in his bright and airy of­fice over­look­ing a some­what di­shev­elled Amiens Street in Dublin’s north in­ner city.

“It is bet­ter than it has ever been,” he says sim­ply. “When you look at all sta­tis­tics – the num­bers, the em­ploy­ment, the rev­enue – it is cer­tainly hav­ing its best ever time.” Tourism is, he says, “the largest em­ploy­ment sec­tor in the coun­try and re­gard­less of whether some­one is in­volved in tourism or not, the taxes tourists are pay­ing re­duce ev­ery­one’s tax bill by over ¤1,000”.

More ex­pen­sive

It is not long be­fore talk turns to Brexit. “We still don’t yet know the shape it’s go­ing to take,” he ad­mits. “It will pose an ex­tra chal­lenge be­cause the like­li­hood is there will be a fur­ther de­val­u­a­tion of ster­ling, which will make us more ex­pen­sive for our big­gest mar­ket, the UK. But it will also make our big­gest and clos­est com­peti­tor – the UK – cheaper for in­ter­na­tional com­pe­ti­tion from North Amer­ica, from main­land Eu­rope and from long-haul des­ti­na­tions. So that will cer­tainly be a chal­lenge.”

What trou­bles him most is the pos­si­bil­ity – which once seemed re­mote but now looks in­creas­ingly likely – of a hard Brexit. That is, he says, a “re­ally sig­nif­i­cant risk to the in­dus­try be­cause our re­la­tion­ship with the UK is in­cred­i­bly com­plex”.

“From a tourism point of view, as well as be­ing one of our big­gest cus­tomers and one of our tough­est com­peti­tors, it is also part of our prod­uct of­fer­ing be­cause of North­ern Ire­land. It is a re­ally com­plex re­la­tion­ship, and if there is a hard Brexit, it gets re­ally chal­leng­ing. That is the big cloud hanging over the in­dus­try, and it will cost us hun­dreds of mil­lions in eco­nomic rev­enue. It will cost us tens of thou­sands of jobs.”

There is no trace of alarm in his voice as he says this. Kelly is merely stat­ing facts.

There is con­sid­er­ably more alarm in the voice of the chief ex­ec­u­tive of the Restau­rant As­so­ci­a­tion of Ire­land, Adrian Cum­mins. “Ev­ery­one I speak to is ter­ri­fied that this year is go­ing to be very dif­fi­cult,” he says. He fears Brexit will be “a night­mare” par­tic­u­larly for the north­ern half of the coun­try, which is more re­liant than the south on vis­i­tors from the UK.

“The Govern­ment seems to have for­got­ten about tourism when plan­ning for Brexit, and all the fo­cus is on food pro­duc­tion and other ar­eas of the econ­omy,” Cum­mins says. “It is as if the Depart­ment of Fi­nance sees record num­bers com­ing into the coun­try and think ‘ ev­ery­thing will be grand’. But we are sleep­walk­ing into a dis­as­ter, and come the be­gin­ning of April when the tourism sea­son starts, things might turn des­per­ate very quickly.”

Tourism Ire­land is work­ing to en­sure things “don’t get des­per­ate”, and it plans to in­crease its mar­ket­ing spend by ¤10 mil­lion to ¤45 mil­lion this year as it launches its first new global ad­ver­tis­ing cam­paign in seven years.

The cam­paign – “Fill your Heart with Ire­land” – starts in earnest this month in more than 20 mar­kets around the globe as it seeks to grow tourism rev­enue by 6 per cent, to ¤ 6.5 bil­lion, and vis­i­tor num­bers by 4 per cent, to 11.67 mil­lion. Some peo­ple are al­ready sold on the idea of Ire­land as a desti­na­tion.

‘Nice weather’

“Great value”, “nice weather” and “lovely food” are not phrases peo­ple here typ­i­cally as­cribe to life on this is­land. But on a dark and wet win­ter morn­ing at the Jame­son dis­tillery in Dublin’s Smith­field, these are the words tourists ( who may have had a sup of whiskey) use to de­scribe Ire­land.

Rashi and Tej Malhi from Birm­ing­ham have just fin­ished a tour of the dis­tillery when they speak to The Ir­ish Times about their ex­pe­ri­ence here. They are buzzing af­ter a long week­end in Dublin “It has been amaz­ing,” Rashi says. “The peo­ple have just been so friendly, and there is so much to see and to do. We have been go­ing non-stop. We stayed at the Marker Ho­tel, and that was just bril­liant and we have seen all the sites. I’ve loved it. And the food has been great all week­end and great value too.”

Craig Mc­Carthy and his part­ner, Laura Mor­shel, from New Jer­sey are in Ire­land with their re­spec­tive mothers, Joanne Mc­Carthy and Mau­reen Mor­shel. They are on their way into the dis­tillery af­ter drop­ping their lug­gage at an Airbnb in Dublin’s Lib­er­ties.

“One of our first trips away as a cou­ple was to Ire­land and that was seven years ago,” Laura says. “So this is a kind of a nos­tal­gia trip for us. What I love about Ire­land is the cul­ture but also how re­laxed peo­ple are. And the last time we were here we were just so blown away by the food, we hadn’t re­ally ex­pected it to be so good.”

Still cheaper

Craig says he has been de­lighted by the Airbnb of­fer­ing. “It has worked out re­ally well and is giv­ing us a much bet­ter in­sight into how reg­u­lar peo­ple live.” He says Ire­land is “ex­cel­lent value for money. It cer­tainly is com­pared to where we’re from. We live just out­side New York City so prices are very high. I know that Ire­land is not as cheap as Berlin maybe but still cheaper for a lot of things than home.”

And as for the cli­mate, Laura Mor­shel de­scribes the weather as “nice” adding that while it is “kind of cold and grey, it is not too much so. It is the type of weather that makes you want to go to a cosy pub and stay warm.”

Fionn Daven­port is a travel writer and au­thor of mul­ti­ple edi­tions of the Lonely Planet’s Ir­ish guide book. He says that in spite of Ire­land’s “ac­cel­er­ated race into moder­nity”, its “more tra­di­tional qual­i­ties are still seen as its main tourist strengths. Land­scapes, scenery, the im­me­di­acy of the Ir­ish wel­come.”

His view chimes with re­search com­mis­sioned by Fáilte Ire­land that sug­gests the land­scape, scenery and nat­u­ral en­vi­ron­ment are the most fre­quently cited draws for vis­i­tors to Ire­land.

And then, of course there is our famed friend­li­ness. Daven­port says Ir­ish peo­ple have “a big mis­un­der­stand­ing” of what that means. “We some­times scoff at the no-

tion of Ir­ish friend­li­ness as be­ing ex­ag­ger­ated, but what out­siders per­ceive as friend­li­ness is ap­proach­a­bil­ity, a will­ing­ness to en­gage in con­ver­sa­tion, a gen­eral dis­re­gard for stuffy con­ven­tions and that ease that we take for granted but isn’t al­ways ev­i­dent in other coun­tries.”

He ex­presses the view that Ire­land still does in­for­mal­ity bet­ter than any other coun­try on Earth. “In­for­mal­ity puts peo­ple at their ease; it al­lows them to re­lax and not worry about up­set­ting some so­cial rule they may not be aware of. That in­for­mal­ity ex­tends to high- end ex­pe­ri­ences too. I stayed in Ash­ford Cas­tle re­cently and was struck by the ho­tel’s re­mark­able abil­ity to com­bine ex­cel­lent five-star ser­vice with a friendly, re­laxed in­for­mal­ity that was, to my mind, unique to Ire­land.”

For all the talk of Brexit and VAT and ris­ing ho­tel prices, Paul Kelly knows Ire­land needs to look be­yond the neg­a­tives and be­yond the UK, and he high­lights a big push to broaden the ap­peal of Ire­land in emerg­ing mar­kets in­clud­ing In­dia and, most no­tably, China, a mar­ket which has grown from vir­tu­ally noth­ing a decade ago to close to 100,000 to­day.

He says tourists come here look­ing for “more cul­tur­ally rich ex­pe­ri­ences”. “They’re look­ing for more au­then­tic­ity. Au­then­tic­ity seems to be the word that comes up again and again when you’re talk­ing to peo­ple about what they’re look­ing for, and we’re re­ally well placed to of­fer that.”

But what does au­then­tic­ity re­ally mean? “It means in­ter­act­ing with lo­cals, hav­ing real, nat­u­ral ex­pe­ri­ences that are based on real sto­ries of his­tory or real nat­u­ral land­scapes as op­posed to the man­u­fac­tured. Get­ting to feel like you are liv­ing like a lo­cal and get­ting to know the lo­cal, is cer­tainly a grow­ing zeit­geist in tourism.”

Ac­com­mo­da­tion

The sup­ply of ho­tel rooms is an­other cloud on the hori­zon. “It was only a cou­ple of years ago that it be­came prof­itable to start build­ing ho­tel bed­rooms again,” Kelly says. “And once that be­came prof­itable, devel­op­ment started, but it ob­vi­ously takes about five years from when some­body says ‘I think I want to build a ho­tel’ to when they can open the door.”

One al­ter­na­tive to ho­tels has been Airbnb. But that is un­der threat af­ter Min­is­ter for Hous­ing Eoghan Mur­phy moved to tighten the rules and force those with buy- to- let prop­er­ties to get plan­ning per­mis­sion from lo­cal councils to cover short- term rentals for more than three months a year.

The Min­is­ter made the move amid grow- ing con­cerns that land­lords who used to of­fer long- term leases were choos­ing to let houses and apart­ments to tourists to max­imise their re­turns. One aim of the pro­pos­als is to “bring homes, once avail­able on the tra­di­tional rental mar­ket, back into typ- ical long-term rent­ing”.

There are 1,000- 3,000 homes in the greater Dublin area that could come back into the long- term rental mar­ket as a re­sult of the mea­sure.

Airbnb de­scribed the mea­sures as “a cut and paste job” from reg­u­la­tions in other cities” and said there was “no clear ra­tio­nale for the rules be­ing pro­posed”.

Rea­son to be con­cerned

It has ev­ery rea­son to be con­cerned. Last year, busi­ness was boom­ing here, with Ire­land record­ing its busiest sum­mer yet for Airbnb rentals. There were about 640,000 guest stays recorded over the sea­son. The book­ings brought i n about ¤ 57 mil­lion to the Ir­ish econ­omy, with those rent­ing out rooms and prop­er­ties reap­ing ¤ 2,000 on aver­age for the sum­mer pe­riod.

Kelly says it is too early to say what the changes to the rules gov­ern­ing ac­com­mo­da­tion de­liv­ered via the shar­ing econ­omy will have, al­though he stresses that it “has been a very wel­come ad­di­tion to the tourism of­fer­ing”. In ad­di­tion to ad­dress­ing a short­fall in ac­com­mo­da­tion, it has met con­sumer de­mand and “spread the eco­nomic ben­e­fit of tourism through a wider range of peo­ple”.

He also says it has tem­pered price in­fla­tion. “In Dublin it would’ve been an aw­ful lot worse I’m sure without Airbnb. So it’s been very wel­come. We need to re­view what the rule changes to see what kind of im­pact it will have, but it would be im­por­tant that we can con­tinue to of­fer that type of so­lu­tion so we can com­pete in­ter­na­tion­ally.”

Com­pet­ing in­ter­na­tion­ally is what it is all about. While Kelly is up­beat, the Restau­rant As­so­ci­a­tion’s Cum­mins is con­sid­er­ably less so. He ad­mits to be­ing fear­ful that spi­ralling costs through­out the sec­tor – no­tably in­surance, lo­cal author­ity charges, wage costs and VAT – could quickly “kill the golden goose”. And if that goose dies, the whole is­land will pay the price.

‘‘ Au­then­tic­ity means in­ter­act­ing with lo­cals, hav­ing real, nat­u­ral ex­pe­ri­ences that are based on real sto­ries of his­tory

Ire­land’s tra­di­tional qual­i­ties are still seen as its main strengths, in­clud­ing the scenery in places such as the Gap of Dun­loe in Kerry (above); left: tourists en­joy a tour of Dublin with Viking Splash Tours. PHO­TO­GRAPHS: GETTY IM­AGES

Vis­i­tors to Ire­land say the weather makes you want to go to a cosy pub and stay warm

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