Sunday 20 October 2019

Boom for hotels is over tourist chief warns

Meeting revenue growth targets predicted to be 'very tough' this year as Brexit bites and competition rises

Niall Gibbons, CEO of Tourism Ireland
Niall Gibbons, CEO of Tourism Ireland
Gavin McLoughlin

Gavin McLoughlin

The boom period of Irish tourism looks to be over, with revenue growth set to slow substantially this year.

Tourism Ireland boss Niall Gibbons said hoteliers will find it hard to pass on the Vat hike brought in in January in full because of weaker demand growth.

"Demand won't be increasing at the same rates as previous years - double digits, those days are gone," Mr Gibbons said.

In recent times the industry has been posting record year after record year. After bouncing back from the post-crash 'zombie hotel' industry. In 2018, revenue from visitors grew 10pc, with 11.2 million people.

Mr Gibbons said his target for this year is to grow revenue by 6pc, but that achieving this would be "very tough".

He said Brexit's downward pressure on sterling, and a boost in air capacity giving European travellers more access to sunny destinations, will crimp visitor numbers here. "We will see growth alright, but it's going to be a much more mixed batch of growth, we'll struggle to grow all our markets - that's the early indications that we have," Mr Gibbons said.

"The target is to grow revenue by 6pc. That's going to be very tough now, there's no question about that. We just have to be really competitive."

Mr Gibbons said the industry needs to be conscious of the need to provide value for money, saying that this was an area where Ireland underperforms tourists' expectations. His organisation's role is to market the island of Ireland as a destination for tourists. It's a cross-Border body with representatives from Northern Ireland and the Republic on its board.

"A lot of our strategy this year is about sustainability. It's about actually trying to grow the business in quarter one and quarter four when you've got good value around, you've got good air access, and you've still got capacity around at very good value," Mr Gibbons said.

He said there was a "sense of hurt" and surprise within the industry after Minister for Finance Paschal Donohoe restored the Vat rate on the sector back to 13.5pc, from 9pc. "There are people who are more worried than others. The people who are most worried are those who are in rural areas, people who are in the food sector particularly who would have extremely tight margins. There's a sense, I suppose, of hurt within the industry. That's the feedback that we're getting.

"And what's going to happen now that we're into March is the Vat really takes hold, because now they're actually paying the Vat over."

The body has been successful in recent years in forging good relationships with TV and film producers who have been shooting productions here.

Northern Ireland is a key filming destination for the HBO series 'Game of Thrones', and HBO has in the past provided advance plot lines to Tourism Ireland to help it capitalise as soon as episodes air.

The series will finish this year but plans are afoot for a permanent Harry Potter World-type attraction which aims to capitalise on the series for years to come.

Mr Gibbons said there is potential to increase the number of Chinese tourists coming here but said operators have to research customer preferences, for example in areas like payments.

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