Home holidays 'vital' to recovery

The recession has led to sharp fall-off in demand for domestic holidays by Irish residents, which is unlikely to be reversed until at least 2012, according to a report by the Irish Tourist Industry Confederation (ITIC).

Despite the bleak outlook, the report said demand for home holidays was “holding up better” than demand for holiday trips abroad and would be “vital” to the survival of many tourism businesses and to the recovery of the sector as a whole.

The Review & Outlook for Ireland’s Domestic Travel Market report, published today, is one of the first comprehensive pieces of research conducted on the domestic holiday market.

It estimated the home holiday market is worth €1.5 billion annually to the economy, and had more than doubled in size since 2000, largely on the back of a dramatic growth in the number of short breaks taken by Irish residents.

The market accounts for a 38 per cent share of all holiday bednights in the country, and almost two out of every three hotel bednights, generating almost one third of economy’s total receipts from tourism.

Between 2004 and 2008 domestic holiday nights increased at a faster rate than holiday nights from overseas visitors, growing by 7 per cent per annum compared to 5 per cent from overseas.

The report said domestic market demand now accounted for more than 90 per cent of new business for Irish hotels.

However, the first six months of 2009 has seen a drop of 10 per cent in the number of home holiday trips, and a 15 per cent decline in expenditure.

Nevertheless the report said demand for home holidays had proven more resilient than demand for holiday trips abroad, which fell 19 per cent during the same period and saw a 21 per cent drop in its monetary value.

The report set out a number of possible scenarios for the domestic market performance over the next three years, favouring the “battered but resilient outcome”.

This outcome would see a further 10 per cent fall-off in demand for domestic trips next year, with the market stablising in 2011, and returning to a modest growth of 5 per cent in 2012.

The sector’s recovery was strongly dependent on a restoration of the public finances, competitiveness and consumer confidence through appropriate Government policies.

ITIC chairman Tom Haughey said the importance of the domestic market cannot be overstated in that “it underpins the overseas visitor market, sustains most tourism businesses on a year round basis, and most critically of all, supports employment in the sector”.

Mr Haughey said: “There was an increasing dependence on the hotel sector on the domestic market, particularly at a time when demand from overseas has faltered”.