This article appears in the current issue of 'Hotel and Restaurant Times'

There are two reasons for two cheers for tourism in this final month of 2011 . The number of  overseas visitors to Ireland has increased steadily over the first  ten months of the year and the Central Statistics Ofice, prompted by Minister Leo Varadkar, has restored its monthly statistical service in relation to trips into and out of  Ireland.

Some 3,696,000 overseas visitors came to Ireland in the first seven months of this year, an increase of 11.8% on the same period of last year. Visitors from mainland Europe were up by almost 14% over the period while the American market showed a strong 13% growth. The biggest, and most pleasant surprise however was that visitors from Great Britain grew by 9% for the period, a recovery which had not been predicted in earlier returns, nor indeed from anecdotal reports in the marketplace.

While not actually taking these statistics with the proverbial ‘dose of salt’, it is important to put them into two contexts. The first is the dreadful experience of the early Summer of 2010 when the infamous Icelandic ash cloud severely disrupted travel not only into to this country but throughout much of Europe. The disruption sent arrivals in May and June into freefall and therefore it was only to be expected that a recovery would take place this year. The second context is the pattern of Irish tourism since 2007 when incoming visitor numbers reached their peak. Since then the industry has been on a downward spiral and therefore growth figures for this year are on a base which is around a third lower than it was five years ago. Overseas visitor numbers for all of 2007 totalled 7.7million compared to 5.8million for last year and the first half figures show a similar pattern. During the first six months of 2008, for instance, we welcomed 4.53m overseas tourists. In 2009 the number had fallen to 4.06m and to a low of 3.3m. last year. This year’s total of 3.69m. therefore should be seen in this context.

The Great Britain market is also making a belated recovery but has some way to go before we get back to the heady days of ‘New Horizons.’  In the first half of 2008,  a record 4.537m. Britons arrived here, but a year later (and without the ash cloud being  a factor) the number had dropped to 4m. The first half of last year was disastrous with GB numbers in the first half falling to 3.35m, so this year’s 3.69m, while welcome, still leaves us down by more than 840,000 on the numbers who came in the first half of 2008. And that amounts to a lot of bednights, meals and pints.

The question raised by these figures therefore is whether Irish tourism has bottomed out and can return to a pattern of sustained growth, or if this is a ‘flash in the pan’ stimulated by a series of fortunate events such as the visits of Queen Elizabeth and President Obama.

There are two answers to this question relating to short term and long term growth. In the short term the omens seem to be good. Optimism in the industry, among hoteliers, restaurant owners and service operators has been building and is reflected in the Failte Ireland ‘Barometers’ and Tourism Ireland’s comprehensive ‘SOAR’ reports.  ‘Industry sentiment is positive n the Republic of Ireland on the back of a good performance in July and August’, says the latest report, adding however a note of caution. ‘The very uncertain economic outlook for the second half of the year is casting a shadow on industry expectations for the latter part of 2011 and combined with the late booking trend is resulting in price discounting by both accommodation and transport providers.’

This ‘health warning’ underlines the vulnerability of the Irish tourism industry (and virtually all destinations) to outside influences which are beyond our control. As I write, Europe is looking down the barrel of a likely default by Greece on its loans, world stock prices are falling and President Obama is struggling to revive a sluggish US economy. Such factors create uncertainty and fear among those planning a holiday and can dramatically influence the cost of that holiday or business trip through fluctuating currency values. Despite all of this however,  world travel has remained remarkably resilient and the World Travel and Tourism Council has been able to report continued recovery in international travel over the first half of 2011, despite the economic turmoil which prevailed in many countries over that period. There can be no doubt therefore that virtually unlimited opportunities remain out there to grow tourism into Ireland and the challenge is to avail of those opportunities.

The core attractions of Ireland as a tourism destination have not changed very much since the industry peaked in 2007. Our people are still warm and friendly and welcoming to visitors. Indeed the downturn in the economy may serve to reinforce these traditional values. Our heritage and landscape remain inviolable  and the presentation to visitors has been significantly enhanced by astute investment. Infrastructure investment has made access to all parts of the country a lot easier and our accommodation is among the most modern in Europe. Front line tourism staff are more professional and better trained than ever before and great strides have been made in developing a distinctive Irish cuisine based on our superb food products. This is not to say that we can relax in terms of product development, but that we have made a lot of progress since the days when our tourism product was rightly described as ‘jaded.’

With a high quality product to offer therefore the task for the industry is to attract visitors to avail of it, and as we have seen in recent years, this is easier said than done. The obvious initial course has been to concentrate on Great Britain and significant investment has been made over the past three years in an attempt to recover this market. Apart from the unexpected spike in July of this year, so far the results have been disappointing. A major factor has been the British economy itself in which GDP growth forecast for this year is a meagre 1.1% (down from an earlier forecast of 1.4%). Inflation is running at just over 4%, unemployment has risen to 7.9% and while sterling has been strengthening against the euro (to around 88p), this has not been enough to compensate for higher domestic prices. Even so, Great Britain remains one of the most important  travel markets in Europe and next-door Ireland offers familiarity, value and ease of access. Failure to gain significant market share over three years therefore must reflect to some extent on the marketing strategies which are being employed.

Ireland has also performed reasonably well in the North America market during the recession, perhaps because we control such a tiny market share. After the heady days of  2006 and 2007 when we broke the one million visitor barrier, US numbers  fell to 953,000 in 2008, 892,000 in 2009 and 853,000 last year. In the first half of this year North America arrivals were 368,000 compared to 336,000 in the first half of 2010. According to Tourism Ireland however the immediate future in the US is not very bright. ‘Near term forecasting has been significantly downgraded and consumer spending came to a virtual standstill in Q2. ...The chance of a renewed recession is rising.’

Mainland Europe has been our rock in recent years, holding reasonably steady with countries like Spain actually producing growth (although numbers are small). The most significant trend has been within countries bundled as ‘Other Europe’ (ie- not GB, Germany, France, Italy or Spain). Visitors from these reached 1.2m in 2007 and remained a sizeable 856,000 last year. While it is a mixed bag, it is surely a group of markets worthy of close attention.

In the longer term therefore, exciting opportunities exist for Ireland in an enormous world travel market that just keeps on growing. We do not need an enormous increase in market share to transform the industry, but we do need to know with great precision those market segments which can produce numbers and revenue and target them accordingly.

ends