Tourism policy review is an opportunity to kick start a boom

Minister’s initiative most welcome to industry

Foreign tourists are arriving in greater numbers for the first time in several years. Good news indeed. However, to judge the health of the sector on arrival numbers can be misleading. Foreign expenditure in the country last year was running almost €25 million less per week than five years earlier.

After several years of growth in visitors the chill winds of global recession touched us in 2008, exposing how uncompetitive Ireland had become. The result saw annual visitor numbers and revenue tumble by 1.8 million and over €1 billion respectively, resulting in a loss of over 50,000 jobs.

The industry has come through its deepest downturn in living memory. Now that demand is on an upturn, the time is opportune to discuss the future for one of the country’s oldest indigenous industries.

Successive governments have lauded the potential of tourism as a generator and distributor of economic “goodies” through the country. Tourism is the world’s fourth fastest growing industry, with more than one billion international trips and $1 trillion in global revenues annually. But the world has changed with new consumers and travel trends continually emerging. Technology has revolutionised how tourists plan and book their trips, thereby forcing all tourism destinations and businesses to reinvent themselves and their business models.

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The launch of a tourism policy review by Minister for Tourism Leo Varadkar is a welcome development. The industry does not have a clear-cut prioritisation of policy objectives to guide a strategic business development plan for the sector. This despite the very substantial investment in tourism infrastructure and more than 20,000 businesses and 180,000 jobs dependent on tourism.

It is perhaps a truism to say that “tourism is everybody’s business”. Tourism touches every parish in Ireland and breathes life into communities, through its power to create and sustain jobs. Its component parts are spread all around the country – restaurants, hotels, B&Bs, natural and manmade attractions, bus and train stations, shops, pubs and supermarkets – all parts of normal life.


Vision
But tourism just doesn't happen by itself, it takes policies to make it happen. It requires vision. Ireland's tourism is badly in need of a road map to guide its future development and investment – without it export tourism performance will falter.

Key stakeholders are being invited to make submissions to the Minister, and the Government is expected to produce a new tourism policy sometime in 2014. It should and must give clear guidelines on Government’s future commitment to the sector so that a broader tourism strategy and action plan involving all key stakeholders can be developed.

Foreign direct investment in Ireland is accepted as a critically important part of our economy, employing directly over 100,000 and supporting at least that many more indirectly. In many instances there is a limited life cycle to these investments, eg Dell, Fruit of the Loom, Digital, etc. Manufacturing gets “offshored” as lower labour costs and other incentives lure investors away from Ireland. There is a very powerful case to be made therefore for higher priority to be given to developing growth in indigenous industries that cannot easily be offshored. Tourism and food are two obvious examples.

Minister of State for Finance Brian Hayes’s comments that “sustainable recovery must be built around manufacturing” is laudable. But a more obvious and productive target for job creation is the services sector, particularly tourism. Governments cannot create jobs, but can provide support and an environment in which industry can confidently invest, prosper and create employment.

Forecasts for international travel are positive, although at a more modest growth rate than over the past two decades. New emerging economies offer higher growth opportunities, and, while the traditional markets of developed economies will grow at a slower rate, they continue to be the larger origin markets for international travel.

A robust outlook for global travel does not of itself assure success for Ireland. Success must be fought for and won against fierce competition from magnificent old and emerging new destinations.

And success will not be determined by just slick marketing, but by the nurturing of a value-based product here on the island, not a price-based product. Competitiveness will always determine the success of any business, and Ireland still has some catching up to do in this regard. The cost of doing business here is still too high.


Authenticity
And how ought the product be developed ? Surprising though this may seem it is my view that the product should be developed primarily with the residents of Ireland in mind rather than the potential visitors.

Today’s more sophisticated traveller seeks authenticity above all else, and is willing to pay a premium for that. Ireland is blessed with natural beauty that compares to the best in the world.

As an English-speaking race – the language of international tourism – we have earned a reputation for friendliness which is always appreciated by visitors. Though considered a real bonus by visitors who come here, surprisingly it is not considered as a key motivating factor by potential visitors when deciding where to holiday.

Our home-based food product is gaining global recognition, our island status is itself attractive, and air and sea access makes getting here easy from most of the world’s great source markets.

Tourism is an economic activity like any other, which to succeed must attract investment and deliver a decent return on that investment.

Tourism is our great national industry which can prosper in its own right, but which has huge spin-off attributes which benefit many other sectors. The policy review provides the opportunity to shape tourism’s future in a way that protects the character of the country while ensuring our culture is not diluted.

Paul Carty is chairman of the Irish Tourist Industry Confederation