The Irish tourism industry, which this year is expected to see 6 million visitors to our shores, will be to the forefront in dealing with the opportunities and challenges which EMU will bring to Ireland.
Once EMU is fully in operation we can expect the industry to benefit from the reduction in cost and inconvenience of currency transactions and a stable interest rate environment.
EMU will affect marketing and strategic activities of all businesses within Irish tourism and the industry will also have an important role to play in the transition to a single currency, given the market-oriented nature of its services.
There are a number of key strategic issues for EMU and Irish tourism. One is the elimination of foreign exchange costs which may account for up to 2 per cent of the total holiday cost.
This should have a positive impact, encouraging larger numbers to take holidays abroad. Irish tourist operators should be suitably placed to take advantage of these trends and should move pro-actively to seek new customers and markets.
A second is that greater transparency will allow visitors to easily compare offerings across participating countries, thus heightening the importance of product and service differentiation.
By its nature EMU will eliminate exchange rate risk and uncertainty. Exchange rates between participating countries will be fixed and will not fluctuate against each other. Exchange rate exposure and possible fluctuation will remain against sterling, the dollar, non-EMU member states and other currencies such as the Japanese yen and the Australian dollar.
The needs of clients will reflect the dualism that will exist during the transition period. Tourism businesses will need to consider the requirements of suppliers such as travel agents and tour operators, as well as the needs of clients and customers. Marketing and sales people will play a crucial role. They must understand dual pricing in the transition phase, they must understand the psychology of pricing and they must be able to operate in a more competitive market place. CERT, the State tourism training authority, is encouraging dual pricing in 1999 and hopes that the industry will be in a position to make the final transition to full currency before the mid-2002 deadline.
An important part of any organisation's strategy for EMU must be information system requirements which facilitate the transition to the euro. Information technology issues are, however, only part of the overall strategy for conversion and it would be a mistake to view the transition as an IT problem. All operational departments will have a equally important role to play.
EMU will affect all functions of the company to a certain extent. However, training and human resources are likely to be amongst the functions most affected by the introduction of the euro. Staff training and its effectiveness will ultimately determine whether or not a company's transition will run smoothly.
Training will need to operate at a number of levels:
Staff who will oversee and prepare for the changeover, such as key staff in the main business areas;
Staff dealing with the general public. Both full-time and part-time staff will need to be trained to deal with the queries that will arise from the general public, such as what does the conversion factor mean. Staff dealing with the general public should be comfortable making various conversion calculations to the euro and be able to explain the new euro prices. Their ability to be as helpful as possible will positively reflect on the business.
Legal issues will also arise and these will centre around pricing where EU directives will be issued concerning the display of prices. Also of significance will be the issue of legal tender - when will the euro become legal tender? How long will the dual currency operate? Other legal considerations include issues relating to continuity of current contracts, transaction regulations and rounding rules on prices.
CERT has a number of strategic objectives in preparing the industry for EMU. It wants to create an awareness of the implications of EMU for the mangers in the industry. It wants to ensure that the industry knows what it needs to do to enable a smooth transition, and to ensure that it has the necessary materials and support for its endeavours with regard to the single currency.
CERT will manage and deliver some 30 workshops, national and regional, up to the end of 1999. These workshops will have a strong practical focus and aim to address the operational requirements of tourism businesses.
All CERT centres and regional offices will become One-Stop-Info Centres. These centres will provide the medium through which individuals can exchange information and ideas on euro guidelines and training programmes for tourism.
Dr Tony Lenehan is head of the Industry Training at CERT, the State tourism training agency.
