Tuesday 27 September 2016

Game of tourists: Ireland's holiday boom and the reasons behind it

Niall Gibbons is in charge of persuading foreigners to come to Ireland and give money to our businesses.

Published 01/05/2016 | 02:30

Niall Gibbons by Jon Berkeley
Niall Gibbons by Jon Berkeley

Niall Gibbons is a cheerful fellow. And he has good reason to be. Business is booming, with figures for the early part of the year up about 20pc.

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Gibbons is in charge of Tourism Ireland, which markets the island of Ireland abroad as a tourism destination. And 2015 was a record year for tourism, with around eight million of them coming to Ireland.

Not only did more people come, but they also spent more - the volume figure rose 14pc, but the revenue figure rose 20pc. If you take out the people who came to visit friends and relatives, revenue rose 28pc, Gibbons says. He's a handy man for stats.

So why do people want to come here, and what's behind the boom?

"The research points to a number of key things. What people find best about Ireland is the friendliness and warmth of the people, that stands head and shoulders above everything else. The scenery, where the Wild Atlantic Way ticks a box particularly, and Irish culture expressed in various forms between music, dance, [or] it could be the love of WB Yeats. They're all major things that play to our advantage.

"The satisfaction rate is very high. Exit surveys are done when [people] come here - in excess of 90pc of people are satisfied with their trip when they come here.

"There's been a changing shift in the profile of the visitor that's been coming over the last number of years. Three years ago we put together a strategy that focused on a number of things.

"First of all was that we'd invest our money where we would get the biggest revenue return, not just volume, so to speak. That meant us putting a bigger effort into the United States and mainland Europe, from where people tend to stay longer and spend more than people from perhaps the UK," Gibbons says.

"The UK is very important in terms of volume of visitors, 4.4 million people came from Britain to the island of Ireland last year. A huge number - but revenue would be about 28pc of the total spend.

"Whereas visitors from the likes of Germany would stay for over seven days, the United States you're looking at nine, and from Australia and developing markets you're looking at 14. So you've a longer-staying, higher-spending visitor.

"With the abolition of the air travel tax, we're seeing a large increase in the number of air routes into Ireland as well. If you take the United States for example, we're now seeing that of all US outbound travel into Europe, 10pc is stopping in Ireland.

"It's been really good on the currency side as well, we've got a great advantage, but I always say on the other side as well that those currency advantages apply to all members of the Eurozone. We're actually winning market share, we're growing at twice the rate of our competitors, which is really good."

So-called 'screen tourism' is helping too, with sci-fi fans flocking to these shores on the back of Star Wars and Game of Thrones. What helps drive those fans here is digital and social media channels, which Tourism Ireland has been investing heavily in for the last number of years. The digital era doesn't necessarily make things easier, as lots of countries are competing for 'likes' and retweets, but having Lucasfilm and HBO as partners helps.

The 51-year-old Gibbons is a chartered accountant by background. From Rathmines in Dublin, he did business studies in Trinity College before joining Coopers & Lybrand, which eventually became part of PwC. Later, he moved into marine research and development in the public service, where he worked for seven years.

Then an opportunity arose to join Tourism Ireland as head of corporate services. He's now been CEO for seven years.

"One of the most interesting and intriguing parts of this job at that time I joined - 14 years ago - was that it was just after 9/11. You also had the integration of, after the peace process, the Bord Failte and Northern Ireland staff into Tourism Ireland, so it was a fascinating cultural project.

"If you go back to where tourism was on this island 20 years ago, it was in a much different space than it is now. If you fast forward to today, we have to do a business plan every year, I've got a DUP minister in Northern Ireland and a Fine Gael one down here, and they have to sit across a table from each other and sign off on a business plan. It's just been an amazing experience to see the whole thing evolve, I think it's a great success story of the whole peace process."

It's not all sweetness and light, however, and there are plenty of challenges ahead. A potential Brexit for instance.

"We're keeping an eye on it, I suppose it raises more questions than it answers at the moment," Gibbons says. "I suppose the questions you would ask arising from Brexit would be: what would the future of the common travel area be? It's of big benefit to the UK and Ireland.

"And what about the future of the UK and Ireland visa, which is available now in China and India? For British people coming to Ireland who use the E111 medical card, will that get honoured? I can't answer those questions at the moment.

"I think from a global tourism perspective in general, we like to have reasonably liberal borders - you obviously have to have security arrangements in place, etc - but the more open the borders are, the better for tourism.

"We're currently in preparation for planning for 2017 to 2019, that'll be finished after the Brexit vote takes place so we'll see what happens."

He says keeping Ireland financially competitive is "absolutely vital".

"It's been great to have the dollar and sterling go the way they have, but these are factors beyond our control. If they go back to where they were five years ago, we'd need to ensure that what we're offering is value for money all round - and that's not just the price of the hotel. Room availability in Dublin is a big issue.

"I think the other risk factor that's out there at the moment, and it's not just an Irish one, it's international, is the whole safety and security issue. You've seen what's happened in the likes of Istanbul and in Paris and Brussels, and all those things impact on consumer confidence.

"What happens is that intra-European travel certainly gets impacted by that, but certainly all the operators that we're talking to would appear to indicate that additional business is now being driven into Spain, Portugal and Ireland, which would be seen as safer haven destinations. It's not the basis on which you want to build your brand, but is it an interesting observation?

"The other thing that's interesting to observe is what's happening to visa regimes around the world. We've seen a number of countries suspend Schengen arrangements while the current migration crisis is going on. We've seen the US restrict its visa waiver scheme as well. And the European Commission is talking about suspending Schengen visa waivers too. All that talk isn't good for our business. Tourism thrives on open borders, it thrives on consumer confidence.

"Demand has risen very strongly over the last number of years to the point that this year on the island of Ireland, we'll welcome probably 9.6 million people or even more. It's meant that in key hotspots, not just in Dublin but in places like Cork or Killarney or Belfast, there are issues with hotel accommodation capacity.

"So for us it's about trying to focus on regions and seasons, it's looking at markets that offer better prospects in terms of seasonality. It's working with our partners in Failte Ireland, to see what festivals and events are in the programme. It's great to have things like a New Year's Eve festival - which we didn't have a few years ago - because there's a lot of accommodation capacity around at that time at a really good price.

"It's also about using products like the Wild Atlantic Way and Ireland's Ancient East as well, to really push those a bit stronger as well. It's about pushing a strong rural message.

"We have to acknowledge, though, that the vast majority of people coming to Ireland (between 80pc and 90pc depending on time of the year) are coming though Dublin - and people want to have Dublin as some component of their trip. But [it's about] trying to see will people extend their trip, or will they start it somewhere else and finish in Dublin, so it really is trying to get more variety."

The coming years will see the agency try to tap into new markets where cultural links with Ireland haven't traditionally been strong. The UK, the US, France and Germany have traditionally been Ireland's 'big four' - but now the push is on to get a bigger share of the lucrative Chinese and Middle Eastern markets.

"We've taken a decision to expand our operations in China. We've got our first director on the ground now, just appointed last month, and we have a company that represents us in four cities," says Gibbons.

"We see good prospects coming from China, we're likely to have over 50,000 visitors in 2016. The key components in relation to developing the Chinese market are really fourfold: working very closely with the airports and airlines to see can if we get a direct route in, which I would hope would be sooner rather than later.

"Secondly on the visa regime, it's been great to see the new UK-Ireland visa scheme rolled out for tourists, which means that for anybody coming from China to the UK or Ireland, you can enter either country at any time of your choosing and travel around both. For the island of Ireland that's significant, because to go to Northern Ireland you would have needed a UK visa.

"We've seen an increase in excess of 40pc in visa applications from the Chinese market, which is a very encouraging pipeline for what may come down the track.

"On the marketing front, we've got a website over in China in Chinese, and there's a fair number of visitors to that. And we're very active in the social media space on Tencent, Weibo and WeChat.

"The other thing is that we've got a sales mission as well, we're leading out 17 companies in May, which will include the likes of the Guinness Storehouse, Titanic, the Merrion Hotel and others. We'll take in five cities in five days.

"On the Middle Eastern side, I'm just back from a visit to the UAE and India, we're going on a sales mission later in the year, we're seeing amazing connectivity. The likes of Emirates and Etihad have put in double daily flights. That connectivity opens up 10 gateways in India, it opens up five in China, Dubai will open up a new route from Emirates into Auckland this year - so even from New Zealand now you'll be able to go one stop to Dublin, which is significant for us.

"We'd like to see a greater share of the Emirati market coming to Ireland, and in that context there's a bit of work to be done with providers here on the ground.

"There are a number of simple steps you can take that don't require a lot of money - like a copy of the Koran in the room, a prayer mat, the direction to Mecca. That's important to these visitors. The food as well, halal food. So I think that's something that's improving here. There are some hotels that cater really well and you'd like to see it broaden out a little bit as time goes on."

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