Irish people are spending €1,500 on their New York shopping trips - and that's before they buy anything, writes Paul Cullen
Over there, overdrawn and probably way over their baggage allowance - as the pre-Christmas shopping rush begins in earnest, the Irish are invading New York in numbers never seen before.
Cheaper flights, increased capacity across the Atlantic and a more favourable exchange rate against the dollar are the factors driving an extraordinary travel boom that sees shoppers willing to travel more than 10,000 km mid-winter in search of that cut-price shirt, designer dress or exclusive perfume.
As mass movements go, the pre- Christmas exodus to the Big Apple hardly matches the drama of the Wild Geese or the Famine ships, but it surely says as much about the wealth of 21st-century Ireland as those earlier events were markers of more difficult times.
"Sure there's no sense to it, but it's part of the getaway adventure," says Angela Phelan, social columnist and author of the Irish shoppers' bible for the city, So New York. "And it certainly highlights how expensive goods are at home."
Equally extraordinary about this phenomenon is the extent to which these comfortable, even affluent, people seek to avoid paying VAT and duty on their purchases. Of an estimated €25 million spent last year on pre-Christmas shopping trips abroad, the Revenue Commissioners collected just €42,141.30 in customs duty and tax. Imagine what would happen if a similar number of people failed to pay their taxes, and yet no-one in authority seems interested in collecting what is rightly due to the State.
ACCORDING TO A Revenue spokesman, Customs officers will pay more attention to US flights used by shoppers in the pre-Christmas period. Whether this results in a greater haul remains to be seen.
The Irish are New York's biggest visitors relative to population, according to the figures. Last year, 253,000 of us travelled to New York, placing Ireland seventh on the city's table of visitor- producing countries, behind far larger countries such as the UK, Japan and France. That's still a drop in the ocean for a city that receives more than 37 million visitors a year (most of them from elsewhere in the US). But in the Fifth Avenue department stores and out-of-town outlet centres to which the shoppers are drawn, it can sometimes seem as though the Irish are taking over.
At Woodbury Common in New Jersey, for example, an outlet centre so large they hand shoppers walkie-talkies to keep in contact with their friends, the Irish are the third-largest contingent of shoppers. Of 220 Irish people who travelled to New York with one tour operator this weekend, for example, 160 bought bus tickets to the outlet, according to the company.
This month and next, up to 100,000 people will travel from Ireland to North America, most of them on shopping trips ranging from one night to a week. While Aer Lingus says traffic to New York this November/December is the same as last year, Continental has increased its capacity on the route by 27 per cent.
"Five years ago, this period was seen as off-peak but now all our planes are running full," says a Continental spokesman. Aer Lingus, meanwhile, is seeing the shopaholics branch out to new destinations in North America, with bookings for Boston and Chicago up 10 per cent and 6 per cent, respectively. It also says customers are booking their shopping trips earlier.
The season, which used to begin after Thanksgiving at the end of November, is also getting longer. Martin Joyce of Sports Travel International brought more than 400 runners and 100 of their friends to the New York marathon at the start of this month. "Every year, we have to book our hotel earlier as this period gets busier and busier. On the buses back to the airport, we leave 10 of the 50 seats free for all the shopping bags."
The current euro-dollar exchange rate is hovering around $1.30 for every €1, which is the weakest the dollar has been for 19 months. But that doesn't mean people about to embark on a trip across the Atlantic will get exactly $130 for every €100 they slide across the bureau de change counter. At AIB's foreign exchange desk yesterday, they would receive an exchange rate of 1.266742, leaving them with $126.67. They will also be charged commission of €1.27.
On credit card transactions, the currency conversion rate charged may be higher than the exchange rates available in a bureau de change if the bank that provides the credit card decides to mark up the exchange rate it receives from the credit card issuer (Visa or MasterCard).
The date on which the foreign currency exchange rate is applied should be the same as the date that the transaction is posted to the account. When consumers buy something outside the euro zone using their credit card, they will usually pay in the local currency, with the amount converted to euro by the card company. But some retailers convert the amount of the transaction into euro at the point of sale using a less favourable exchange rate than that used by the credit card companies, which can cost around 3 per cent more than paying in the local currency.
The shopping hordes go for the bargains, particularly in designer clothing. "It's definitely cheaper, maybe by up to 40 per cent," says Maggie O'Neill, who was on her second pre-Christmas shopping blitz in New York last week. "You stock up on clothes for the children and then you're not inclined to buy anything more at home for the rest of the year," says her friend Joanna Butler, a four-time veteran of such trips.
WHEN SHOPPING AT Bloomingdale's or Macy's, Irish people can simply show their passport and, as a non-US shopper, the sales tax will be waived.
"It's 80 per cent about shopping, 20 per cent holiday," says Sandra Dunworth, speaking on Thursday when the shops were closed for Thanksgiving Day. "But there's also the buzz of New York; it's not the same as walking up Henry Street on a wet November morning."
There's also the lure of finding items not sold in Ireland. In the leafier parts of Dublin, brands such as Abercrombie & Fitch are huge status symbols among teenagers, most likely because getting hold of them requires so much effort.
Angela Phelan dates the beginning of the pre-Christmas exodus to the mid-1990s, when exchange rates were favourable and there were no outlet centres in Europe. "It started as a long weekend or even a week away for a crowd of girls. Before, they would have gone to the Canaries for the sun but then they started going on shopping trips to New York."
She says 9/11 put an obvious dent in the traffic for a while but it also changed everything for retailers in the city. "After that, there were no rules other than survival." The result was a new burst of energy in retailing as the capital became one of the world's main fashion centres, its shops bursting with the latest designer clothes, Phelan explains.
Regular visitors well understand the rules of this shopping game by now. "You bring practically nothing," says Butler. "You go for one mad shopping day, and then you take your time." The outlet centres are for bargain-hunting, the great department stores of Fifth Avenue provide the essential Christmas buzz, and the Meatpacker district in lower Manhattan is the place to go for quirky designer presents and a laid-back atmosphere (and to get away from the Irish).
She has further advice for the first-time visitor looking for that perfect holiday experience: book your restaurants a fortnight in advance; don't listen to the hotel concierge's tips, as he's probably getting a cut for any recommendations; and reserve places for shows directly or through a central ticketing agency rather than through your hotel.
Everyone who makes the pilgrimage to the Big Apple talks about the prices (see panel). "The mantra in New York is 'nobody pays retail; that's just for tourists'," says Phelan. "You can always find something cheaper elsewhere."
However, there is a simple explanation for the bargains to be found in the shopping aisles of Manhattan and New Jersey.
"The reality is that those coming back from New York are avoiding VAT and duty unless they declare their purchases, and most don't," says Dermott Jewell of the Consumers' Association of Ireland. "This explains the price differential. I don't think it's sufficiently patrolled, but maybe it's difficult to do so because of the massive flow of people involved and the lack of customs agents to check people's baggage."
"I have stood at check-in in JFK wondering how in the name of God the plane will take off with the mountains of luggage being checked in," says Phelan. "You see people dancing up and down on their suitcases trying to stuff everything in."
In three trips, Sandra Dunworth hasn't had any problems with excess baggage or customs, she says. "I think about the duty every year but so far so good - no hassle, no confiscations. There's always a chance we could get caught, I suppose. If that happened, I'd have to rethink things but even if I paid up I think I would come out ahead."
Others are more reticent but it's fair to say this view is typical for the transatlantic shopping fraternity. One told me: "It's like the guy in Catch-22; if everybody else is doing it, then I'd be a damn fool to be any different."
IF IRISH RETAILERS are concerned about so many people spending so much money in shops overseas, they aren't showing it.
"We are anticipating a really strong Christmas period," says Aidan Magennis, director of Arnotts. "City-centre shopping continues to flourish, despite increasing out-of-city and out-of-country shopping. Shoppers in Ireland are becoming more discerning and their expectations are being set by global experiences. It is up to Irish retailers to meet that challenge."
Neither does Tom Coffey of the Dublin City Business Association see the loss of trade to New York as a threat. "We see Dublin as competing against other major world cities. This is driving up awareness among Irish consumers and pushing up standards."
Perhaps the biggest negative in New York is the cost and standard of accommodation. Half a dozen major hotels have closed down in recent years and are being converted to apartments, leaving the city short of 2,000 visitor beds. Hotels are more expensive than ever and the shortage makes it prohibitively expensive for the last-minute traveller. Standards can vary too; on their short trip last week, O'Neill and Butler changed hotel twice, once because they were sharing a room with a cockroach and then again because the heating failed in their five-star hotel.
There are other downsides. Some electrical goods will not operate this side of the Atlantic. Defective goods can be difficult and expensive to replace. New York's consumer affairs department deals with hundreds of complaints every year about scams practised by the city's electronics stores. "While it can prove time-consuming and costly to replace faulty goods, we find people who travel to New York are aware of the potential problems that can arise," says Jewell.
While the good times continue to roll, none of these drawbacks is likely to stem the flow of shoppers heading across the Atlantic. For the moment, airline capacity is the only constraint, so just imagine what it would be like if Ryanair started flying to New York.
How much?
U2 18 CD
There:$12.99 (9.99) Here:€19.99
Apple iPod 2GB Nano
There:$149 (114.61) Here:149.50
Rock & Republic Victoria Beckham jeans
There:$280 (215.38) Here:510
Tommy Hilfiger Manhattan jeans
There:$99 (76.16) Here:€129
Chanel No 5 100ml bottle
There:$99 (76.16) Here:100
Camper women's leather boots
There:$201 (154.61) Here:255
So, is it worth it?
Well, on a strictly financial basis, probably not, though that's hardly the appropriate yardstick for evaluating a trip to the world's most vibrant city. Regular Aer Lingus fares start at €129 one-way but add taxes and fuel surcharges and you're unlikely to pay less than €400 return. Four other carriers service the route from Dublin, Shannon and Belfast.
A taxi to your hotel from JFK will set you back about $50 (€38) and the average daily room rate in New York hotels is $243 (187), according to the city's tourist authority.
However, with a little planning and effort, bargains can be had. Maggie O'Neill and Joanna Butler paid $479 (368) a night for two people sharing in a five-star hotel. Sandra Dunworth paid 411 for her flight, then got a Manhattan hotel room with a kitchen for $630 (€485) for three people for two nights.
Eating out can seem cheap by Irish standards but when taxes and obligatory tips are included, the margin diminishes. The average cost of a dinner last year was estimated at $38 (29) but this masks huge differences between Manhattan's uber-chic dineries and the city's many ethnic and fast food options.
Add to this the cost of city taxis and entertainment and you're unlikely to have much change out of 1,500 for a four-night break - and that's before you even start shopping. The shoppers The Irish Times spoke to this week planned to spend $3,000-$5,000 (€2,291-€3,819) on purchases during their trips.
Know your shopping limits
The rules on importing goods from non-EU countries are relatively simple; every adult is entitled to bring in to Ireland 175 in purchases (90 for those under 15 years old). Anything above this has to be declared, and may be subject to VAT and/or customs duty.
The allowance covers alcohol, gifts and souvenirs, though minors have no allowance for alcohol.
The Revenue Commissioners say it is important that people make themselves aware of the regulations before travelling (more information on www.revenue.ie).
Passengers arriving in Dublin airport from outside the EU are required to pass through the Green or Red channels.
Going through the Green channel means you have nothing to declare, but if you are found to be over your allowance you could have the goods seized and be prosecuted.
However, the chances of being caught seem relatively slight, judging by Revenue's figures. In the first nine months of this year, Revenue seizures of jewellery and clothes netted 9,800 in VAT payments and just over 1,000 in duty.
When penalties of more than €12,000 were added, the total haul came to a modest 22,000.
Once the penalties are paid, the goods are released.
Rates of duty vary considerably for different items. No duty is payable on digital cameras, laptops and Playstations, for example, but clothing attracts a duty of at least 12 per cent.