The most obvious economic impact of the war in Ukraine is playing out in Ireland and across the continent on garage forecourts, as fuel prices surge to almost unbearable levels.
But another looming economic effect has the potential to compound the damage from the fuel crisis, and cause significant additional difficulty for the Irish economy: the war’s impact on the travel sector.
The Government should remain alive to the risk that the war will cause significant numbers of US tourists in particular to rethink their European travel plans for 2022.
This is prime vacation-booking season for many Americans, who are renowned for caution about international travel in times of strife. Irish tourism industry veterans still shudder as they recall the impact of the Gulf War in 1990.
A fifth of the inbound US travel market to Ireland disappeared overnight after the September 11th attacks of 2001.
It would be a cruel blow to the tourism industry here if the post-pandemic recovery that it so desperately needs this year is set back by Russia’s invasion of its neighbour, 3,000km to Ireland’s east.
Visitors
Almost 1.7 million North American visitors, chiefly tourists from the US, brought €1.8 billon to the Irish economy in 2019. They spend more and they stay longer than tourists from any other nation, and represent a quarter of the entire market in value terms.
The tourism and hospitality industry has been propped up for the past two years by taxpayers via hundreds of millions of euros worth of pandemic subsidies. This was supposed to be the year that the financial support bore fruit as the industry reflowered.
State tourism officials remain outwardly confident that the damage from the war may be modest. Yet the most up-to-date industry research from the US suggests the issue is beginning to play on tourists’ minds there.
Travel site, the Vacationer, this week published a survey suggesting that close to 40 per cent of Americans say the war in Ukraine has led them to reconsider their 2022 travel plans.
That doesn’t mean that 40 per cent of expected tourists won’t come. But if a meaningful portion stays away, it will still cause significant damage. We will know the full extent of the impact soon enough.
But few will know it sooner than businesses in the jewel of Ireland’s tourism industry: Killarney in Co Kerry, which is finely geared towards US visitors. As the revelry of the St Patrick’s Day festival fades, Killarney’s fortunes over coming months may be a bellwether for the industry right across Europe.
Attraction
Killarney is a huge attraction for all tourists in Ireland, foreign and domestic. But it is not difficult to see why this part of Ireland, with its majestic scenery and the glint in the eye of many of its hospitable locals, is such a massive tourism draw for Americans in particular. It epitomises so much of the stereotypical image of Ireland in the US.
Killarney isn’t perfect – domestic tourists always cite its high prices. But it is still a top class tourism product.
US visitors have been largely absent for two years from the Kerry town, which recast itself during times of low virus restrictions as a prime destination for the staycationing Irish. This week, however, US accents were widely heard around Killarney for perhaps the first time since the end of the 2019 season.
Earlier in the week, I sat at the bar in Jack C’s pub on Killarney’s High Street and kept an eye out for Americans.
This atmospheric little place is one of the town’s gems. It is, for example, among the favoured watering holes of Sham Courtney, a Kerry character who is famous on the internet for having the strongest accent in Ireland.
Locals grin as they tell you stories about the other farmers who descend from the Kerry hills every summer to Jack C’s in search of conversation with visiting American women.
Conversation
A young couple from Anaheim in California walked into the bar on Monday night. Five minutes later they were engaged in a pub-wide conversation with the locals covering everything from the best hiking routes in the Macgillycuddy Reeks to the merits of Ireland’s de facto national food, the Tayto crisp.
Even the bar proprietor’s mother came out to give her view. The US couple seemed simultaneously bewildered and beguiled by it all. They will probably tell their friends and family about their experience in Jack C’s during St Patrick’s week when they return to the US.
It rarely profits anyone to engage in stereotypes, but this is the type of interaction that most American tourists in Killarney seem to crave.
John C O’Shea, the pub’s proprietor, says you can always tell the health of the market for US visitors to Ireland by the number of coaches parked on Railway Road in Killarney.
How many were there this week, in the run-up to St Patrick’s Day? “Not as many as usual,” he conceded. But he is hopeful the year ahead may yet turn out okay.
In the US this week, the formidable publicity machinery of the State agency, Tourism Ireland, was in top gear as it sought to capitalise on its recent €8.5 million Push the Green Button marketing campaign to convince US tourists to come to the island.
The agency's chief executive, Niall Gibbons, acknowledges the Ukraine war has put some potential US visitors "back on the fence".
But he still expects up to 90 per cent of pre-pandemic US aviation connectivity to Ireland to be restored by summer, as airports deploy a €90 million Government fund to incentivise airlines to relaunch routes.
Capacity will begin to ramp up from April, with fresh connections to Dallas, Seattle, Los Angeles, San Francisco and Charlotte on the way.
Obstacles
There are other obstacles apart from the war to the swift return of US tourists to Ireland and farther afield in Europe, such as the ongoing requirement for all air passengers returning to the US to present certified negative antigen tests from the previous 24 hours. Fuel prices, and their impact on the travel sector, are another potential limiting factor.
But overall, Gibbons argues that a number equivalent to two-thirds of the pre-pandemic cohort of US visitors to Ireland is achievable in 2022. That would be about 1.1 million – the industry and the Government would take that result right now.
But as uncertainty lingers over Russia’s intentions for its other European neighbours after it is done with Ukraine, any escalation of the conflict over nearby borders would be an economic as well as a humanitarian disaster. The US-focused Irish tourism industry, epitomised by towns such as Killarney, will see its consequences if the situations deteriorates.