Putting the case for better value Irish tourism

Investment in the industry is crucial, tourism chief Eamonn McKeon tells Dominic Coyle.

Tourism is a fickle market. Expectations rise, tastes change and events totally outside the industry's control can sometimes impact profoundly - whether it is something as cataclysmic as September 11th or the more workaday dilemmas of exchange rates or oil prices.

As one of the State's most important indigenous industries, tourism must ensure that its concerns are to the fore with Government in making strategic policy decisions or allocating limited funds to capital investment projects.

That is where Eamonn McKeon comes in. He is the voice of the industry in the halls of Government. As chief executive of the Irish Tourist Industry Confederation (ITIC), he represents the interests of businesses as diverse as national airlines and local tourism attractions, from major hotels chains to small guest houses.

"It is a complex industry employing 150,000 across 16,000 businesses. My job is to ensure that Government listens to the problems the industry has, as well as to the opportunities it would like to take advantage of," says McKeon. "We also help the industry by doing quality research into the things we need to do in order to sustain growth."

Appointed last month, he comes into the job with a lifetime of industry experience behind him - including a two-year stint as chairman of the organisation he now leads. Twenty-seven years in a variety of roles at State-owned hotel chain Great Southern and a previous stint as New York-based executive vice-president of CIÉ Tours North America have given him an insight into what works for customers across large parts of the industry and, perhaps as importantly, what doesn't.

"You can't leave things alone even when they are going well," he says. "Business can disappear quickly. It's when things are going well that you have to be making changes. This is a constantly changing industry. I hope, in my time, ITIC will concern itself more about the future. You can't dismiss the present and the past, but we need to be thinking about where this industry is going to be in 10 or 15 years' time."

McKeon has also served as chairman of industry training group CERT, president of the Irish Hotels Federation and a director of the interim board of Bord Fáilte that oversaw the creation of the new Tourism Development Authority. There aren't many in Irish tourism who are strangers to the new ITIC head.

He takes up the post at a challenging time for the sector. The valuable US market is just about returning to the visitor numbers it enjoyed in 2000 ahead of the terrorist attacks, but the critical British market last year reported its first fall for many years.

In addition, holiday patterns are changing with more short breaks and fewer visitors taking time to move away from urban centres to the regions - putting in jeopardy the tourism-related jobs that are often the basis of a small local economy.

"While the absolute drop in numbers arriving from the UK, which is and will remain our largest single market, is worrying in itself, the changing nature of that market is also a concern," says McKeon.

Most importantly, he argues, is the declining number of people arriving in Ireland by ferry with their own cars. Most of the growth in numbers from Britain in recent years has been in urban-based tourism - short-break holidays driven by the massive growth in budget air travel.

"Visitors who bring their own cars are a hugely valuable market for Ireland for a variety of reasons, not least because they distribute themselves better around the country," says McKeon.

Promoting tourism outside the main urban centres is a major priority for ITIC. Next month, it publishes a report on regional distribution of tourism which will confirm that the west is not enjoying the same sort of growth as Dublin and the east in recent years.

In what might seem ironic, a separate policy priority for ITIC is the renegotiation of the bilateral agreement with the US on air routes - a move that would inevitably see the removal of the Shannon stopover, but which McKeon sees as holding huge potential.

"It's generally accepted that there are around 40 million Americans of Irish extraction but it has, to date, been relatively difficult to get here," he says. "The more direct services we get, the better."

Doubling the number of long-stay, high-spending US visitors from the current one million over 10 years has "profound implications and, for the Irish tourist industry, they are all positive".

McKeon argues that Shannon, Cork and Knock are all working to widen their customer base. This month, Ryanair announced an agreement to develop a hub in Shannon for European routes.

Crucial to growing air traffic is investment in airport facilities and in infrastructure generally. The industry has a target of 10 million visitors by 2012.

"We can handle 10 million visitors if we have a better regional spread and the infrastructure to get them from A to B," says McKeon. "That includes a second terminal at Dublin. Frankly, we are not much concerned with who runs it at the moment; the priority is to get it started because, even then, it will be a long time before it comes on stream."

McKeon argues that Irish tourism needs to sharpen its focus. That means accepting that we are not a low-cost holiday market and concentrating instead on delivering value.

"Numbers are important but I think we need less of an emphasis on absolute numbers visiting Ireland. We need to break them down to see what they are doing, where they are going and what they are spending.

"Visits to friends and relatives from the Irish diaspora will happen anyway, even if falling emigration means it is not an area that will drive growth in the future," he says. "Similarly, business tourists will come here if they have business here.

"What we need to drill down on is 'promotable tourism', the potential markets that exist for people to come here for the pure reason of holidaying here."

That means targeting and investing in niche markets such as golf, angling, walking and cycling holidays. Heritage and cultural tourism markets also hold potential.

While Ireland may not be able to compete on price - largely, the industry would argue, because of costs imported from Government policy such as the minimum wage which, McKeon notes, is almost twice the level it is in countries such as Portugal - delivering value will only be achieved by attention to cost base, service and training.

"Nothing will put you out of business quicker than charging too much for a product that is inferior, regardless of the business," says McKeon. "People do serious work to get here because we are an island, so it is important for us that we do not lose our focus on value."

As McKeon next week hosts his first annual meeting of members since assuming his role, he will concentrate on communication - not only with Government but also with members to keep them abreast of market issues.

"The product has to keep improving all the time if we are to keep tourism growing. We will never be able to take advantage of future opportunities if we do not invest in the product and the infrastructure now."