With the holiday season now at its peak, increasing numbers of Irish people are leaving the country to holiday abroad. While the flight to the sun no doubt has been accentuated by the wet and windy summer at home, it is, at heart, an economic phenomenon. Irish people are now holidaying abroad because they can afford to. The growth in foreign travel has been one of the principal barometers of the Irish economic boom.
Irish residents took almost seven million trips abroad during 2006 according to figures recently released by the Central Statistics Office. Of these, two out of every three were foreign holidays. The number of foreign holidays taken by Irish residents has risen from 2.8 million in 2002 to 4.6 million in 2006, an increase of more than three-fifths in the space of just four years.
Spending on holidays abroad is also rising rapidly. The recently published Household Budget Survey shows that, in 2004-2005, the average Irish household spent €1,574 annually on vacations abroad, a rise of more than 50 per cent on foreign holiday spending five years earlier. Moreover the attractions of trips abroad remained undimmed in the early months of 2007. Even before the wet summer set in, Irish residents took more than one million holidays abroad in the first three months of 2007.
The strengthening pull of foreign holiday destinations is largely explained by four economic factors. First, Ireland is now a much richer country than it was even 10 years ago. The numbers at work have increased by 700,000 over the last decade and real incomes have risen appreciably. As a result, far more people can afford to holiday abroad and what was once seen as a luxury for the few has now become a necessity for the many.
Second, the advent of budget airlines has reduced substantially the cost of foreign travel, making holidays abroad affordable for a much wider slice of Irish society.
Third, Ireland is now an expensive country and wages are relatively high. A study published by the Central Statistics Office earlier this year showed that, in 2005, the general level of consumer prices in Ireland was 20 per cent higher than the average for the euro zone. Average price levels in Spain and Portugal were respectively one-quarter and one-third lower than in Ireland. Irish holidaymakers have drawn sensible conclusions from these trends: earn in Ireland and spend in Spain.
Fourth, using their new-found wealth, many Irish residents have purchased holiday homes abroad, principally in Spain, France and Portugal.
There is, however, a sombre side to this sunny story. While Ireland has performed particularly well in attracting foreign visitors in recent years, the cost and price factors that are tempting Irish holidaymakers abroad in ever increasing numbers need to be addressed if the tourism industry in Ireland is to secure its long-term future. Ominously, Irish residents making trips abroad outnumbered foreign residents visiting Ireland in the first five months of 2007.