The launch by the Taoiseach of Ireland’s new national tourism strategy “People, Place and Policy-Growing Tourism to 2025” in Kilkenny Castle is both timely and welcome.
The recovery of our tourism sector since the global economic crisis of 2008 has been impressive. The new 9pc VAT rate, the abolition of the Travel Tax, Failte Ireland’s Gathering initiative, the Visa Waiver scheme and Tourism Ireland’s marketing activities have all been hugely helpful in supporting the sector’s recovery.
Overall, in 2014, tourism is supporting 200,000 jobs and, even despite the ravages of the recession, 20,000 jobs have been created in the sector since 2010. These jobs are located right throughout the country. In many parts of Ireland where there are few alternative sources of employment, tourism provides opportunity for people of all ages, skills levels and background. Thus, tourism is a key indigenous sector for job creation
Thanks to a combination of internal and external circumstances, the outlook for the Irish tourism industry is extremely positive.
Significant growth is returning to both the US and UK economies. Oil prices have halved over the past year. The euro has weakened against both the US dollar and the pound sterling by almost 25%. The unprecedented quantitative easing programme, which is being undertaken by the ECB, will ensure a weak euro in the medium terms. Meanwhile, the global growth in visitor arrivals is forecast to be approximately 3.5pc per annum to 2020. The convergence of all these favourable factors will help to underpin real opportunity for the Irish tourism industry.
It is undoubtedly very timely that the Government has published a 10-year strategy to maximise the potential that now exists in this sector.
The strategy rightly focuses on a number of key areas.
• marketing Ireland as a destination;
• investment support for development of the tourism product;
• protection of our heritage assets;
• a new emphasis on the events sector;
• development of the human resource in the tourism sector;
• empowering local communities to maximise their tourism potential with increased responsibilities for local authorities; and,
• promoting peace and political co-operation on the island of Ireland through the medium of tourism.
In the past, Ireland has focused its marketing efforts on a number of key markets based primarily on geographical proximity and historic links. However, this new strategy ensures that Tourism Ireland’s marketing efforts will be targeted at a broader range of geographical markets with the highest revenue growth potential. This is most welcome and reflects the changing trends in global travel.
For example, China is the fastest growing and largest source market in the world with Chinese tourists also being the highest spending tourists. While Chinese visitor satisfaction with Ireland is very high, awareness of Ireland in China is still low. It is therefore important that, in addition to Tourism Ireland’s efforts, a broader based approach is pursued, involving the development of political, cultural, business and educational links, to raise awareness of Ireland as a destination in this hugely important market.
The new strategy has a strong focus on developing a high quality workforce. This is critical as there have been skills shortages in different areas of the sector over the past ten years, even in the downturn. Currently, the Institutes of Technology provide the vast majority of training programmes in the hospitality and tourism areas. This strategy proposes a new framework involving the Department of Education and Skills, Solas, and Fáilte Ireland to address all aspects of tourism training and education. However, the significant capital investment in kitchens and training restaurants in the Institutes of Technology means that the majority of this activity will continue in the IOT sector. This sector itself is undergoing significant change with the merging of institutions and the development of technological universities.
For example with the merger of IT Tallaght, IT Blanchardstown and Dublin Institute of Technology, this new enlarged institution will become the only public provider of programmes for the tourism sector in the Dublin region, an area in which close to 30% of the tourism workforce is based. It is, of course, critical that these new institutions continue to offer multi-level, flexible, practice based provision, while also developing strong research activity to support innovation in the sector. Indeed, strong sector focused and multi-level provision will distinguish these new institutions from the more traditional universities.
The strategy’s focus on developing research and innovation in the sector is encouraging. Current spending on R&D in tourism is minimal relative to its contribution to GDP. Agriculture, which contributes approximately 2.5% to GDP, accounts for almost 9% of public research funding. Tourism with a contribution of 3% to GDP accounts for approximately 0.1% of total public research funding. A more targeted research and innovation strategy for the sector is badly needed to maximise research activity and drive innovation in the sector. It is disappointing that the strategy doesn’t have more detail or spending commitments as innovation will be key to gaining competitive advantage.
In conclusion, the strategy has much to commend it. The challenge will be in implementation. Barring significant external shocks, the very positive macroeconomic situation should ensure a period of very strong tourism growth. This strategy will help maximise that opportunity and contribute strongly to national recovery.
Dr Dominic Dillane is the Head of the School of Hospitality Management and Tourism in the Dublin Institute of Technology.