Numbers are rarely the most attention-grabbing way to tell a story. But in the case of the impact of Covid-19 on Irish tourism, the statistics are so stark it’s difficult to begin anywhere else.
By the end of 2019, as the first people in Wuhan, China, were falling ill with a novel coronavirus, Ireland was celebrating what had been another very good year for tourism. Over the previous 12 months, 11.3 million people had visited the island of Ireland. They spent €6 billion and supported an estimated 325,000 jobs.
Then Covid-19 hit. Tourism numbers immediately "collapsed by 80 per cent", says Niall Gibbons, chief executive of Tourism Ireland. Up to June this year, "the international side was 80 per cent down again. It went 80 per cent down on a rate that was already 80 per cent down".
In 2019, there were 24 gateways for flights operating out of North America into Ireland. Today there are just 14.
International travel opened up again on July 19th, but the return of overseas visitors has been what Gibbons characterises as a “sprinkling” rather than a flood.
"Unfortunately, it came too late by comparison to other European countries, who were ahead of us with very positive announcements at early stages," says Ruth Andrews, chief executive of the Irish Tour Operators' Association (ITOA), which represents the country's 34 largest inbound tour operators, bringing in 11 per cent of overseas visitors to Ireland. Tour operators are "still operating on losses equivalent to 95 per cent" of 2019's business.
Occupancy in hotels across the State averaged 47 per cent in July and 43 per cent in August and is currently at 27 per cent for September – although it is very unevenly spread. Some hotels in popular areas have been practically full all summer, but in the cities the picture is bleaker. Hotels in Dublin – normally the city with the highest occupancy in Europe, at an average of 85 per cent – were only 30 per cent full.
"Dublin will lag behind until the night-time economy and business and leisure returns," says Tim Fenn, chief executive of the Irish Hotels Federation.
“I came into this industry 20 years ago, just after 9/11. And I thought I’d seen it all. After the global financial crisis, we lost 30 per cent of our business. But this is like living in a parallel universe. If someone asked you to sit down and write out your worst-case scenario at the beginning of last year, you could never have come up this,” says Gibbons.
Anyone who tried to book a last-minute holiday in the tourism hotspots of the west or south coasts and balked at the prices might assume our staycation summer to have been a thundering success, but the reality is a bit more nuanced. Asked to rate its success, Paul Kelly, chief executive of Fáilte Ireland, puts it bluntly. "Lots of people have taken staycations. And lots of people have really enjoyed their staycations...[but] when we came into Covid, the domestic market only accounted for about 30 per cent of the overall tourism market.
“So in terms of success for tourism, it absolutely hasn’t been a success. Because as strong as the domestic market may have been, the absence of overseas is just a massive hole that domestic will never be able to fully fill.”
The international visitor “stays longer, goes to more regions, spends more and consumes more of the tourism and hospitality sector” than domestic visitors, says Andrews. “They purchase all the elements – visitor attractions, car rental, coach transport, accommodation, hospitality, restaurants and pubs, but also evening entertainment shows and theatres. They have very high spending power.”
Government supports have kept the industry afloat since March 2020. Those are due to run out at the end of the year, though most in the industry are confident they will be extended. “Realistically, our industry is not going to be able to stand on its own two feet in December. The EWSS [Employment Wage Subsidy Scheme] and local authority rates support all need to be preserved into next year,” says Fenn. He wants to see the 9 per cent VAT rate for hospitality extended to 2025.
The focus for now is about 'sustaining the short-term survival of the industry. That survival phase will go on until the end of 2022'
The big questions are about what will happen after this year. When will international tourists start coming back in significant numbers? How long will Ireland remain on the US red list? Will Irish people choose to staycation again next summer or will they be launching themselves off the island at the first opportunity? With lockdown savings in their bank accounts, might they do a bit of both? Will things have returned to normal by next summer?
“I don’t think there’s any chance 2022 is going to look like 2019,” says Kelly. “It is going to take a good number of years to get back to the volume levels we had in 2019. The Irish offering is still really attractive. In time, the tourism industry will be bigger and better and more sustainable, but it’s going to take a number of years.”
The focus for now is about “sustaining the short-term survival of the industry. That survival phase will go on until the end of 2022”, says Gibbons. After that, “we move into a rebuild phase where we can expand the number of markets we’re operating in. And that will last for a couple of years”.
By which time, the fear is that the combined effects of Covid and the climate crisis may have changed our appetite for travel forever.
Even if you could flick a switch tomorrow and end Covid, the tourism industry would still face significant challenges, says Gibbons. “People are keen to visit Ireland. We’ve got a really strong loyal base in overseas markets. The key question now is how do they get here?”
Ninety per cent of visitors to Ireland come by air and 10 per cent by sea, he says. "We've seen the whole air side of the industry decimated. We're down about 10 gateways from the US and Canada, including Connecticut, Calgary, Montreal, Vancouver and Charlotte."
The route to Washington DC will be restored in the winter and while there are still connections to Britain and mainland Europe, “the frequencies are very, very low”.
'Irish consumers are making bookings at the very last moment' to avoid having to cancel at the last minute or ending up having to quarantine abroad
One glimmer of light is that coach tours are starting to book up again, albeit slowly. “The good news is that the 2022 pipeline is very strong. There’s pent-up demand, and a lot of people who have deferred their holidays, and a lot of new bookings. Customers still want to come here. What we need now is support to keep those businesses ticking over to bridge that gap between now and next March. To make sure those businesses are there to deliver business to the tune of €450 million to the tourism economy,” says Andrews.
For all the optimistic talk of pent-up demand for foreign travel earlier this year, dire predictions about 10-hour queues at Dublin Airport once international travel reopened never came to pass. Even now, the mood among would-be holidaymakers both into and out of Ireland remains deeply cautious.
"What we've seen in the last 18 months [is that] Irish consumers are making bookings at the very last moment" to avoid having to cancel at the last minute or ending up having to quarantine abroad, says Jill De Azevedo, head of consumer insight for Fáilte Ireland.
Research carried out by the organisation in July showed some changing trends from summer 2020 to 2021. “Last year, it was about ‘I need to change my location’,” she says. “This year, there was a slightly different nuance. People are looking for a mood uplift, for fun, craic and letting loose. We’re seeing a very strong [desire for] quality time with family and friends, going back to places they’d been to before.” Holidaymakers, she says, were looking “to uncomplicate” their lives.
These appetites for simplicity and reconnection drove a strong staycation summer in areas traditionally popular with domestic tourists. For Harvey's Point hotel in Co Donegal, summer 2021 was "fantastic. We saw a lot of new business coming – people who had been doing overseas holidays were coming to us instead and staying seven nights", says Niall Coffey, the hotel's general manager. There was an influx of younger visitors and families.
Brenda Murphy, group sales and marketing director for Cliste Hospitality, which owns nine hotels across Ireland including the Muckross Park in Killarney, says the group had 85 to 90 per cent occupancy among hotels that are, on average, 40 per cent reliant on the overseas market. "There was a lot of work behind that. Last summer was very much focused on health and safety. This summer was about what can be done to heighten the experience."
Innovations included adding a petting farm to the Radisson Limerick, an indoor cinema to the Hillgrove in Monaghan and new tea rooms to Muckross Park. Irish people, she says, need to see they're getting value for money.
But there is an acceptance in the industry that we’re not likely to see another staycation summer in 2022. Next year, Coffey predicts “it will spread out”. Domestic visitors will make Ireland their second holiday and come for shorter stays, and in common with other hoteliers, Harvey’s has been working on developing new experiences, including wine and cider tastings on the lawn, and guided walks, aimed at making sure those first-time visitors come back.
So what will the 2022 holiday season look like? People may have built up significant savings, but there’s no sense of large numbers of people rushing out to spend them on the trip of a lifetime, notes De Azevedo. “There’s a lot of hesitancy in committing to those decisions [to travel]. People are talking about it, they are considering it, but when it comes to confirming it with an actual booking, that’s not necessarily happening.”
A significant piece of research by Tourism Ireland looking at the future travel intentions of 30,000 people revealed four distinct trends.
“First, people are looking forward to getting back to international travel, but they want to do it in a safe and sustainable way. The second thing is that people are more keen now on closer-to-home destinations” in Europe, says Gibbons. There’s much less interest now in “big spend, long haul with the whole family, the type of thing I can talk about at a dinner party” holiday.
'One thing that has not worked has been pricing. People still feel there is value, but around price points in accommodation in particular, we've had a lot of negative feedback'
The third trend is for the familiar, which “was a feature of past crises too. We tend to look to the past for comfort.”
And the fourth trend is for what Gibbons dubs a desire for “wholesome reconnection” with family and friends after long periods of enforced separation.
However, worryingly for the industry the research from Fáilte Ireland shows people are holding off on planning any holiday for the moment. Its sentiment trackers show “really low intent” to take any kind of holiday at all in December, January and February, with only 2 per cent of people saying they plan to take a short break locally this winter. Six per cent intend to travel to another country. About 4 per cent of people plan to take a short break in Ireland next April and 10 per cent plan to go abroad. Many people appear to be planning either going away or holidaying at home – but, for now, not many intend to do both.
One factor that may be deterring people from booking again is the ever-thorny question of value for money. Those working in hospitality almost universally insist Ireland does offer value, but judging by the experiences of Irish Times readers, this isn’t the perception across the board. Readers recently shared their impressions of holidays in Ireland – and for each contribution enthusing about the beauty of the country, there were others complaining about overpricing and service.
De Azevedo acknowledges that “one thing that has not worked has been pricing. People still feel there is value, but around price points in accommodation in particular, we’ve had a lot of negative feedback. It is real, because things have been expensive. But it also feeds into a historical narrative around how it’s expensive to travel in Ireland…[and] that narrative absolutely needs to be addressed.”
"It's important to balance what I call the 'Joe Duffy factor': you're always more likely to hear negative stories on radio shows and in media. People don't tend to ring up and say they got great value for money," says Gibbons.
Few in the industry disagree with the perception that service was uneven in many areas over the summer. A shortage of more experienced staff left a higher-than-normal proportion of young people taking up roles in the sector. Almost one in four staff employed this summer was new to tourism, according to research by Fáilte Ireland, which is launching a recruitment drive that aims to highlight career paths in tourism.
One question preoccupying those in the industry is whether the combined forces of the pandemic and the climate crisis could have changed travel habits forever. Gibbons has begun examining how to reimagine our tourism offering for what he calls the “redesign phase”. Ultimately, he believes, the conversation will have to move away from the number of visitors that come into Ireland and towards getting them to spend more, stay in different places, and stay longer.
Ireland can build on its clean, green image and wide-open spaces, says Fenn. “Maybe some people want to go lie on a beach for two weeks in 40 degrees. Hopefully, we won’t ever be providing that. At the end of the day, the people who come here come for something different.”
Currently, '70 per cent of tourists go to 30 per cent of the landmass. We have a significant opportunity to spread tourism more evenly'
Ireland will emerge from the pandemic well placed to make the most of the opportunity to build a more sustainable kind of tourism, Kelly predicts.
“We’re going to come out of this with a tourism infrastructure far stronger than when we went in, if we look at the number of greenways that have been developed, the transformation in outdoor dining facilities with the support of Fáilte Ireland and local authorities, and the development of shared spaces for watersports activity providers. Those trends around getting out, experiencing nature, experiencing the outdoors – they’re here to stay.”
Meanwhile, Andrews says that Covid has shown how we need to rebalance Ireland from a tourism perspective. Currently, “70 per cent of tourists go to 30 per cent of the landmass. We have a significant opportunity to spread tourism more evenly. We’ve been having good success in seasonality, and regionality is what we’re missing right now in Irish tourism.”
More immediately, though, the sector needs to get through next winter. “Yet again, we’re looking at as bad a year this year as we had in 2020,” says Andrews, who estimates that an additional €10 million in business continuity funding is needed.
“It is going to be a really challenging winter,” agrees Kelly. “Even in domestic tourism, we are seeing a drop-off in people’s intention to travel in the winter, and a drop-off in their intention to take a domestic holiday. That will add to the challenge that’s there in terms of businesses surviving through the winter.”
For Gibbons, the biggest question now is how to get Ireland reconnected to the rest of the world. “You can have all the pent-up demand you want, but if you can’t get here, you’re in trouble. We’ve a mountain to climb in terms of reconnecting Ireland.”