Tuesday 21 January 2020

Centralised structure stops tourists from coming back

Local organisations are more effective at delivering quality and attracting repeat visitors, writes Felim O'Rourke

Felim O'Rourke

THE tourism industry in Ireland is in crisis. The total number of overseas holiday visitors has fallen rapidly in the past few years after a period of stagnation. Very little attention has been given to the role that customer retention has played in the failure of Irish tourism.

In 2010 total overseas visitors to Ireland came to 5,865,000. Only 41 per cent of these, or 2,422,000, were holiday visitors. The other 59 per cent were emigrants visiting their families, business visitors or visitors for 'other reasons'.

Between 2007 and 2010 the number of overseas holiday visitors to Ireland fell from 3,993,000 to 2,442,000 -- a fall of 40 per cent. The fall in the number of holiday visitors is being disguised by the growth in emigrants coming home to visit their families.

The level of customer retention by Irish tourism is surprisingly low. Eighty three per cent of the holiday visitors to Spain in 2010 were repeat visitors. The level of repeat visitors to Cumbria was 82 per cent and to Scotland was 68 per cent. Only 35 per cent of overseas holiday visitors to Ireland in 2010 were repeat visitors. This means that most overseas holiday visitors to Ireland do not come back.

Customer retention is central to the success of every business. It is also a proxy measure for product quality. The low figure for repeat holiday visitors to Ireland is a clear indication of the failure of our tourism industry to deliver the product quality necessary for customer retention.

Each year Ireland attracts almost two million first-time holiday visitors compared with less than eight million for Spain. Ireland, however, attracts less than one million repeat holiday visitors compared with 36 million for Spain. If we had the same level of customer retention as Spain (or Cumbria) then we would be attracting eight million repeat holiday visitors annually and total holiday visitors of 10 million. Even if we only were as successful as Scotland at attracting repeat holiday visitors, then our total holiday visitor figure would be about six million. Achieving the Scottish rate of customer retention would double our overseas holiday visitor numbers, and achieving the Spanish or Cumbrian customer retention rate would more than treble those numbers.

Irish tourism is dominated by two State organisations, Tourism Ireland and Failte Ireland. This is illustrated by us, uniquely, having two organisations represented on the European Travel Commission. Tourism businesses are usually small scale and need support in international marketing. Most countries have a State organisation carrying out international marketing, and Tourism Ireland fills this role for Ireland.

Ireland gives responsibility for the development and domestic promotion of local tourism to a State company, Failte Ireland. This centralised structure however is inflexible and is not effective at ensuring that the local tourism industry is aware of customer needs or can co-ordinate its resources to meet these needs.

This centralised structure evolved because of the dominance of Bord Failte/Failte Ireland in policy formulation. In 1964 the government's stated objective when it set up the Regional Tourism Organisations (RTOs) was that they would be independent locally controlled companies. However, Bord Failte was given the job of setting up the RTOs and it subverted government policy by turning them into effective Bord Failte subsidiaries. The setting up of Tourism Ireland deprived Bord Failte of the normal role of a national tourism organisation, but the financial difficulties being experienced by the RTOs allowed Bord Failte/Failte Ireland to take on their role in tourism development and domestic marketing. This new role protected the future of Failte Ireland.

All other countries have established structures at a local level to enable destinations to co-ordinate their activities and resources to meet tourist needs. The tourist's experience of a destination is based on all aspects -- environment, accommodation, activities etc. All other countries have found that the best structure for delivering product quality in all aspects of the destination and attracting repeat visitors is an Independent Local Tourism organisation (LTO).

LTOs can be highly effective at harnessing the goodwill of the community and co-ordinating agencies and tourism business to deliver a quality experience for tourists.

An example of the ability of LTOs to harness community goodwill is in tourism volunteering. In Scotland over 5,000 volunteers work in local tourism attractions each year. In Cumbria, which attracts over five million overnight visitors, there are tourist offices entirely staffed by volunteers.

LTOs can also be highly efficient in their use of public funds. Cumbria attracts five million overnight holiday visitors with a tourism budget of €4.5m, or about 3 per cent of what we spend on our two NTOs. Cumbria attracts four million repeat holiday visitors compared to our one million. The local structure enables Cumbria to run 32 tourism information offices in an area the size of Co Cork. The local structure has also helped them to organise a level of access to the countryside that has made Cumbria a hikers' paradise.

The failure of our existing structure to deliver a quality experience for tourists can be illustrated by examples from every destination in Ireland. We cannot even provide visitors with access to public toilets in most destinations.

Dublin Castle could easily rival Edinburgh Castle as a visitor attraction, but most of the public space is taken up with parking for public servants. The Record Tower, built by the Normans in 1226, houses the Garda Museum. This is essentially a private museum as it can only be accessed by ringing a bell. The Record Tower could instead be used to interpret the history of the castle.

LTOs are owned and controlled by the members in co-operation with the local authorities. These members work with tourists on a daily basis and the survival of their businesses is dependent on the success of tourism in their area. So the needs of tourists are a priority and cost-effective means of meeting these needs are adopted. The local authorities are directly linked into local tourism by the LTO structure and they also give priority to tourist needs.

The LTO model has proved effective at customer retention everywhere else in Europe, and we should adopt this approach.

Felim O'Rourke is an economist and has written extensively on Irish tourism. He was joint author, with Jerome Casey, of the recent Dublin City Business Association's report on Tourism in Dublin

Sunday Independent

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