Domestic travel remains single biggest source of tourism trend – AIB

Despite positive growth in the number of overseas visitors coming here, domestic travel remains the single biggest source of spending in the tourism sector, according to figures compiled by AIB.

Across the Republic’s 820 hotels, for example, 46 per cent of the estimated total spend of €4.5 billion came from domestic tourists, compared to 24 per cent from UK travellers and 18 per cent from North American tourists.

David McCarthy, head of hospitality and tourism at AIB Business Banking, said that card spending on accommodation from UK markets fell 8 per cent in 2018 with UK spend in Dublin down by 20 per cent. The effect of that was, however, offset by a 53 per cent increase in card spending from North American markets.

Where drinking was concerned, the domestic economy was even more important again, accounting for 80 per cent of the €1.01 billion spent followed by the UK (10 per cent) and North America (5 per cent).

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“Dublin pubs have performed really well over the past number of years, and despite the rising challenges appear to be sustaining and growing revenues further,” Mr McCarthy said.

"The trading environment across rural or regional Ireland, however, is not always the same story and the trend of rural pubs closing their doors has continued as it becomes unsustainable for small rural villages to keep a number of pubs in operation."

Domestic traveller

Meanwhile, in the food sector, the domestic traveller accounted for 77 per cent of the total €1.98 billion spend but in the attraction sector, it accounted for just 28 per cent of spend with North American tourists responsible for 38 per cent of the total.

Last year, tourism contributed more than €9 billion to the Irish economy – equivalent to about 3 per cent of GDP. While AIB doesn't take a view as to what direction the sector will go in the coming year, Fáilte Ireland boss Paul Kelly told The Irish Times earlier this month that the sector could already be in decline.

Mr Kelly said the sector had been expected to grow by between 1 per cent and 2 per cent this year but, because tourism spend is calculated as a VAT inclusive figure, the sector could already be in marginal decline, resulting from the Government’s decision to increase the hospitality VAT rate from 9 per cent to 13.5 per cent in last year’s budget.