We are in a period of mixed fortunes for the Irish tourism industry, and the next few years will prove challenging, writes Paul O'Toole
The number of overseas visitors to the Republic increased by 5 per cent in the first half of this year, according to the latest estimates from the CSO, and a similar increase is expected in Northern Ireland.
At the same time, many tourism enterprises, particularly on the western seaboard and in the northwest, are experiencing a poor year to date, with visitor numbers down and profitability under pressure. How can this be? Can we really be attracting more overseas visitors who are spending more money than ever before and at the same time have significant parts of an industry finding it difficult to remain profitable or stay in business?
Yes - and for several reasons. The behaviour of our primary targets - holidaymakers, business tourists, and other discretionary visitors - has changed. And our tourism enterprises face greater competitive pressures than ever before. The massive growth in the short-break market has clearly benefited Ireland. Dublin has become one of the leading short break destinations in Europe, with only Paris more popular among the British. Belfast is growing in popularity all the time.
However, short-break visitors are not here long enough to get out and about and experience the towns and cities in the regions that are any more than an easy day trip away from where they are staying. Our success in attracting short-break visitors, therefore, does not automatically benefit places that are not close to ports or airports, in particular rural destinations.
The significant growth in low fare air access into Ireland has coincided with fewer people travelling by ferry with cars. Visitors are also changing where they choose to stay. The price differential between mid-range/budget hotels and bed and breakfasts has narrowed significantly in recent years and more and more visitors are opting for hotels - particularly in urban areas - over B&Bs. The result is a continuing reduction in the number of B&Bs able to remain open for business.
And our tourism enterprises face increasing competition internally and externally. Hotel capacity has increased sharply - between 1996 and 2002 tourist numbers increased by more than a quarter while the number of hotel rooms here grew by more than 50 per cent. Such an increase in supply inevitably puts pressure on the revenues that businesses can earn.
Overseas tourists love Ireland but are increasingly saying that prices are higher than they expected, particularly of everyday items such as food and drink. We know that the cost base of most tourism companies has increased sharply and many believe they have no choice in the prices they must charge to stay in business. But our potential visitors are only interested in the prices they have to pay and the value they receive. They have a world of choice in terms of the destinations available - in many cases at a lower cost than Ireland and with products that compete with ours in terms of quality and attractiveness.
These factors pose significant challenges to the promotion of the tourism industry overseas. The reality is that travellers are continually changing their preferences, how they make their choices, where they go, for how long and what they are willing to spend.
It sounds like it's all doom and gloom, but that is not so.
Every long-term prediction for global tourism indicates that international travel will increase substantially over the medium to long term. Europe will continue to have a major part of the business but will lose some share to other parts of the world. The challenge for the Republic is to anticipate consumers' needs and visitor trends, adapt to these and ensure that we grow our tourism business at the same pace as or ahead of our competitors. This will be difficult, but our industry has always demonstrated a capacity to adapt and maximise opportunities in the past.
The governments of the Republic and Northern Ireland have both sought in the past year to address the strategic challenges that face tourism. Policy reviews have been completed in both jurisdictions and action plans put in place to ensure that our tourism offering remains competitive.
It is Tourism Ireland's role to ensure that what we promote of the island is attractive and compelling to overseas visitors, and we must and will adapt our strategy and campaigns to deal with new realities. It is the role of the tourism industry here to ensure that it delivers on the promise when the visitor gets here.
That will mean offering increased value for money - price is important but as important is the quality of the overall experience. While we may have limitations in drastically reducing prices, when our visitors are here they must be offered a wonderful time. To do other than this is unforgivable, nothing will more quickly erode our tourism industry.
The responsibility for ensuring the success of our tourism industry is not limited to the industry, the governments and their agencies. The public, which benefits so much from a vibrant tourism economy, must also play a major part. The warmth of the welcome we offer must be enhanced. Departing visitors continually say that our scenery and our people are our two strongest assets, but the number saying the latter has slipped in recent years. As we become wealthier are we forgetting our tradition of welcome?
Over the coming years the big challenges facing tourism must be faced up to. The progress necessary to ensure that the island of Ireland benefits from direct, competitive and convenient access by air and sea from our source markets must be allowed to develop. Product development and innovation, service quality, internal access and infrastructure are all vital for future success. The challenge of spreading the benefits of tourism throughout the island must be addressed but will not prove easy.
Future success is not guaranteed but is attainable. The energy and shared commitment of governments and industry which have brought success in the past must be harnessed to an even greater extent to give us the best chance for a viable and sustainable tourism economy in the future.
Paul O'Toole is chief executive of Tourism Ireland, the body responsible for marketing the island of Ireland to overseas tourists