Manufacturing & Supply Chain

Fáilte Ireland – the National Tourism Development Authority – will invest €5 million to support the tourism sector as it prepares for Brexit. The announcement marks a significant ramping up of activities to ensure Irish tourism is both ‘product-ready’ and ‘industry-ready’ ahead of the UK withdrawal from the EU.

The investment comes as new figures published by Fáilte Ireland show the number one concern among tourism businesses is Brexit, particularly those in northern counties.

The Fáilte Ireland Tourism Industry Barometer is a survey of more than 500 tourism businesses nationwide providing insight into past performance and future prospects. The latest figures reveal that 7 out of 10 (69%) tourism businesses cite Brexit as their top concern – a figure which rises to 80% for accommodation providers in northern counties and 90% in the restaurant sector, both of which report a decline in their business from the UK last year.

More than 3.4 million British tourists, on average, holiday in Ireland every year and spend up to €1.6 billion. This contributes more than €233 million annually to the Exchequer.

Fáilte Ireland is warning that the fallout from a hard Brexit could cost more than €380 million to the sector.

The €5 million investment by Fáilte Ireland will help businesses assess the risk, respond to changes and diversify into other markets in a fresh drive under its ‘Get Brexit Ready’ programme. Its work will focus primarily on border counties and the South East region which have been most adversely affected by the devaluation of sterling and the drop in Northern Ireland and Great Britain visitors.

As well as providing support for over 1,000 businesses across the country, the Tourism Development Authority will also deliver a more targeted programme of training and mentoring for more than 100 businesses in border counties.

Fáilte Ireland’s Chief Executive, Paul Kelly, said: “Fáilte Ireland is working intensively with businesses to help them prepare for Brexit. Brexit remains a key concern for every facet of the tourism sector as our latest barometer survey shows. This is particularly true for the restaurant sector nationwide, as well as accommodation providers in northern counties, who report that their visitor numbers from the UK are down over the past year. The prospect of a hard Brexit, or a potential no-deal scenario, leaves us with significant uncertainty relating to the wider implications it could have on tourism, particularly on the performance of our nearest and biggest overseas market. A less obvious consequence is that we are at risk of missing out on tourists from other core markets as the UK is our greatest competitor and the weakening value of sterling could make it more attractive to long-haul tourists, as well as those from Northern Europe. However, overall, the tourism sector is reporting a positive outlook for 2019. This sentiment would be very much underlined by what was a hugely successful year for tourism in 2018, with visitor numbers and revenue at all-time highs.”

Fáilte Ireland will spend €1.75 million specifically for commercial development to provide Irish tourism operators with opportunities to sell their products to growing markets such as the US. This work will focus on supporting northern counties particularly by bringing major international tour operators to Ireland on bespoke itineraries which they can then sell in core markets. Central to this programme of work will be the retention of the UK market by selling Ireland as a business tourism and golf destination – two types of tourism which typically yield a high number of UK tourists.  An additional €1.5 million will be spent on marketing and PR with campaigns targeting the Northern Irish market and the remainder of the Brexit allocation will be invested in business supports and resources.

Paul Kelly added: “As we await the final outcome of Brexit, and with the situation changing on a daily basis, it is still difficult to quantify the range and scope of impacts that Brexit will have. Our key message to tourism businesses is ‘prepare and diversify’. Any tourism business which does not have Brexit contingencies as a central focus of its 2019 business plan needs to act fast. The most prudent action we can take as a sector is to be ready for the challenges it will bring. Fáilte Ireland has developed a series of initiatives to build capabilities within the industry which will allow them to continue to prosper in the face of this challenge. This includes investing €5 million in a comprehensive programme of supports and commercial development designed to help tourism businesses located particularly in border counties, to ‘Get Brexit Ready’ by diversifying to other markets and reducing their reliance on the British market.”

Other concerns highlighted in the industry barometer include the implications of the increase in the VAT rate to 13.5%.

Despite these concerns, thr barometer results, which take into account the overall performance of 2018, strike a positive note overall. The proportion of tourism businesses expecting trade to be up in the year ahead (59%) outweighs those expecting a downturn. This is especially true for attractions, with about two thirds (68%) expecting more visitors this year. The full barometer report can be found HERE.

Factors underpinning current sentiment include:

• Diversifying into other markets:
  • Tourism businesses reliant on overseas visitors have looked to the US and mainland European markets to offset the decline in UK visitors.
  • About half (48%) of restaurants expect more tourist customers in 2019 compared to 2018. Restaurants have been hit by declining levels of British visitors in 2018, but double-digit growth in the American market has helped to offset this. The trend is expected to continue in 2019.
  • More than half (57%) of hostels say they are likely to be busier in 2019, and only a small minority (9%) expect to be quieter. The predicted shortfall in British visitors is likely to be compensated for by other overseas markets such as France and Germany.

• Extended season:
  • The results for 2018 as a whole have improved since the year-to-date results recorded in the early September barometer, suggesting that the autumn season has performed well. This is supported by CSO figures which show that overseas visitors increased by 7.3% in October (compared to October 2017). The successful year has helped to alleviate some of the concerns relating to the impending challenges.

• Dublin bucking the trend:
  • According to the CSO Survey of Overseas Travellers, British visitors only increased by 1% YTD to November 2018. This is not the experience of many Dublin hotels – half (49%) of them reported an increase in British visitors in 2018, compared to only 26% reporting a decrease.