The much anticipated final report of the Tourism Policy Review Group was published and presented to John O’Donoghue T.D. Minister for Arts, Sports and Tourism at the end of September. Entitled New Horizons for Irish Tourism: An Agenda for Action, the report is a comprehensive assessment of the economic importance of the tourism industry, detailing the growth experienced throughout the 1990’s and the challenges facing it today. It sets clear targets for growth over the next ten years, including a doubling of revenue from overseas visitors to €6 billion annually and a commensurate increase in visitor numbers from six million to ten million.

The IHF, a participant in the consultation process undertaken by the Group, responded by broadly welcoming the report stating that it was heartening that the report formally recognises and acknowledges the Irish tourist sector as a major contributor to the Irish economy.

The report recommends a series of actions to improve the business environment for tourism operators including:

• Strengthen Government commitment to creating and maintaining a positive legislative, budgetary and regulatory environment;

• Strongly support competition in all sectors that affect tourism;

• Maintain recent progress to bring down inflation and tourism prices to the eurozone average and below;

• Address the factors contributing to high increase levels of insurance.

Mr. Jim Murphy, president of the Irish Hotels Federation (IHF) welcomed the report, which endorsed a policy where the economic importance attributed to the tourism industry must be factored into all Government department decisions that could impact on the sector. He stated that is gratifying that the report confirms that Irish tourism is arguably the most successful sector of Irish owned enterprise since the foundation of the state.

The IHF maintains that an overarching recommendation, which will have enormous positive impact on the industry if implemented, calls for the improvement of the effectiveness of Government leadership and intervention in promoting tourism. This will include redefining the scope of tourism policy, the strengthening of the capacity of the role of the tourism division of the Department of Arts, Sport and Tourism and the participation of tourism in the National Competitiveness Council.

"It is essential that the recommendation to establish a consultation arrangement between the Department of Arts, Sport and Tourism and the Government departments and agencies whose activities most impact on tourism including the Department of Finance, Department of Transport, Department of Environment, Heritage and Local Government and the Department of Health and Children should immediately be put in place. This structure should ensure that policy decisions taken by other departments, which can impact on tourism, are done in the full knowledge of the likely effect they will have on what has now been clearly identified as Ireland’s most important indigenous industry," continued Mr Murphy.

"We also particularly welcome the recommendation to strengthen the Government’s commitment to creating and maintaining a positive budgetary and regulatory environment for tourism investment. The IHF will strongly endorse the calling for resolute action to maintain the recent progress of bringing inflation down to the Euro zone average. The IHF particularly welcomes the recommendation to avoid any further increases in excise duties or VAT in the budget of 2004 as well as the recommendation that indirect taxation levels on key tourism related consumables be brought down to the average Euro zone levels", he said.

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Pictured at the launch of the 2004 edition of Get a Life…in Tourism magazine recently are (l-r) Tom Mythen, President of the Restaurants Association of Ireland, John O’Donoghue, T.D., Minister for Arts, Sport and Tourism, John Power, Chief Executive, Irish Hotels Federation and Gillian Bowler, Chair, Fáilte Ireland (see page 6 Innsight)

The Cork branch of the Irish Hotels Federation recently paid tribute to the work of Cork Aer Rianta marketing director John Smyth. In the seven years since John joined Cork Airport, air traffic has grown from 800,000 to close to 2.2 million people this year.

John O’Flynn, Chairman of the IHF’s Cork branch, praised Mr Smyth’s work and the huge effort being made by the team at the airport, commenting "Everyone involved in the hospitality trade knows of the effort being made by John and all the team at the airport to sell Cork as a holiday destination. Visiting tourists, many of them coming to the region through Cork airport, played a major role in underpinning the economic well-being of the region."

John Smyth (third from left) marketing manager of Aer Rianta, recieves the IHF Cork Branch, annual tourism award with Denis Kieran, John O’Flynn, Chairman, Cork Branch; Liam Lally, Arthur Little, Seamus Heaney and John Gatley. (Photo courtesy of the Evening Echo.)

Fáilte Ireland has announced new management positions at the organisation, which are effective from 1 December. They are:

Malcolm Connolly - Industry Development. Malcolm becomes Director of Industry Development having held a number of key management roles with Bord Fáilte. In 2001 he was appointed General Manager, Corporate Development and prior to that had been responsible for research & planning, the Ireland market and product marketing. He also managed Bord Fáilte operations in Paris for the French, Spanish and Italian markets.

Paul Keeley – Marketing. Paul joins from Musgrave SuperValu Centra where he has been Marketing Director since 2001 where he was responsible for the overall marketing function including brand development and retail marketing services. Prior to this he was employed by Eircell as Head of Brand and Retail Marketing, having previously worked with Guinness and Smithkline Beecham in a number of senior marketing management roles.

Deirdre O’Keeffe - Resources & Corporate Services. Deirdre becomes Director of Resources and Corporate Services having been Director of Development in CERT since 2001. In that role she had overall responsibility for education services, research, IT and FOI. Prior to joining CERT, she was Director of Strategic Policy within the Department of Education & Science with responsibilities in policy formulation and research in addition to managing legal affairs and FOI.

Aidan Pender - Education & Training. Aidan joins from PA Consulting where he has been a Managing Consultant since 2000. At PA he worked within the Government and Public Sector Practice. Prior to that, he worked for over 20 years in education, training and executive development with the Institute of Public Administration (IPA), where he was Executive Director and before that with Management Centre Europe in Brussels.

Aer Lingus will offer nine new European routes to Dublin from March and May 2004. Services from Berlin, Venice, Bilbao, Valencia, Lyon and Zurich will start at the end of March, while services from Dubrovnik, Warsaw and Copenhagen commence end May.

This brings to 28 the number of new routes announced by Aer Lingus in the past two years. The recent announcement that Airbus will supply a new short-haul fleet will help the airline to service the routes, said Aer Lingus.

Aer Lingus says Irish holidaymakers will increasingly visit eastern Europe due to lower prices there. But it said there was also considerable inbound traffic expected from these "emerging markets".

The CEO of the Chambers of Commerce of Ireland (CCI), John Dunne, has slammed the Government for publishing misleading national accounts by not including the total cost of the public services that are being provided. Speaking at a press conference in October to launch CCI’s campaign on commercial rates Mr Dunne accused the Government of removing costs that it is imposing on local authorities, such as benchmarking, from the national accounts in order to balance the books.

He argued, "the Government is being either incompetent or dishonest in its approach to local authority financing. It has created a massive additional cost of €220m for local authorities through benchmarking and has decided that while it will fund benchmarking across all other public sectors, local authorities have to go it alone. It is effectively dumping the local authorities and saying they are not its responsibility in order to make the coffers look more healthy."

"The Government won’t even give the local authorities the option to shed staff, which would be an honest alternative," he said. "Instead, it has created the obligation to pay and has given local authorities no alternative but to find the money through a combination of cutting services and hiking up charges to business and domestic users."

"Business has reached the absolute end of its tether in terms of local authority charges and clearly we’re running into opposition on the domestic front around waste charges. In that context we’re calling for commercial rates increases to be capped in 2004 at 3% - the projected rate of inflation. In principle we don’t favour a cap but with the current irresponsible attitude of the Government, absolute boundaries must be laid down," he concluded.

Fáilte Ireland is hosting an informative one-day environmental workshop on Tuesday, November 18th in Dublin. The workshop will look at how best businesses can protect the environment whilst accruing tangible benefits for the Irish tourism and hospitality sector through reduced costs, greater efficiency, higher staff morale and positive, public perception. Topics include:

• the Green Agenda for Tourism

• the development of eco-tourism and the emergence of the Green Tourist

• existing and forthcoming environmental legislation

• bottom-line implications for your business

• how international tourism and hospitality businesses have benefited from adopting green initiatives, and

• how you can turn growing public concern with environmental protection and sustainable development to your advantage.

It will be of interest to owners and managers in the hospitality sector. Bookings can be made by contacting Eamonn Geraghty on 01 8847770 or 086 6002291.

Tourism Ireland’s international advertising campaign ‘Ireland – the island of memories’ has been awarded a Silver Award, in the Leisure Services Category of the EURO Effies 2003. These prestigious European awards recognise effectiveness in advertising and this year attracted a record 73 entries from no fewer than 28 agencies in 14 countries.

Designed and produced by McCann-Erickson London, the ad campaign which ran on television as well as in consumer magazines and press during 2002, aimed to attract European visitors to the island of Ireland in one of the most difficult years ever for global tourism.

The judges evaluated the overall campaign in terms of objectives, creative strategy, target audiences, media strategy and the results generated.

Tourism Ireland also received a second European accolade for its advertising campaign, at the Media & Marketing Awards (M&M’s) held recently in London, where the campaign topped its category receiving a Special Commendation. Again, for the M&M’s there were a record number of entries – almost 200. The Tourism Ireland entry received praise from all the judges as a "complete story that deserved recognition" and a "good allrounder".

The Irish Hotels Federation (IHF) has strongly criticised the Irish Farmers Association recent DNA Test Report on Beef Origin and ensuing publicity on the use of non Irish beef in catering and retail establishments. The IHF has called into question the methods of the investigation itself and the clandestine manner in which it was conducted.

The IFA purchased 53 samples of beef from hotels, supermarkets, fastfood outlets, butchers and meat wholesalers between August 5th and September 4th 2003. These samples were submitted to Identigen Laboratories in Trinity college for testing. Fifteen of these samples were tested positive for DNA of a non-European origin and, according to the IFA, six of these samples came from hotels.

Each one of the hotels in question has been assured by their suppliers that the beef is Irish. None were informed that the survey was taking place and were not given a sample to have independently tested.

Speaking on RTE’s 6.1 and 9pm television news programmes, John Power, Chief Executive, IHF, said "I have spoken to all of the hotels in question and have been assured that the beef for sale in their premises has been purchased as Irish. It is unacceptable for the IFA to conduct such a clandestine investigation without involving the hotels in question. Irish hotels have always been excellent purchasers and promoters of Irish beef but this type of unscientific sampling without any form of verification or independent control makes a mockery of the proper channels and procedures which are used by health boards, the Food Safety Authority of Ireland and other bodies in their fully audited and controlled work."

Mr. Murphy supported the report’s strong recommendation to accelerate the completion of key elements of tourism related infrastructure including the national conference centre and the national sports stadium as well as the completion of the national roads programme. "The placing of these high on the priority list for the Government would contribute substantially to giving us an environment which will facilitate the delivery of the challenging targets set out in the report," he said.

In particular, the IHF endorses the recommendation for the immediate re-negotiation of the Ireland US bi-lateral air agreement, in advance of an EU – US aviation agreement, in order to remove the US gateways constraints and maximise the benefits to Ireland from additional air services and enhance visitor flow.

"The report calls for an additional competitive, fast-turnaround, terminal facility at Dublin airport to help develop additional air services. This and the implementation of a series of actions to improve the visitor reception facilities at Dublin airport are to be welcomed. We would now call on the appropriate bodies to implement the recommendations as soon as possible."

On the recommendations in relation to marketing, the IHF particularly welcomes the recognition that marketing links Ireland’s tourism product with potential overseas and domestic customers. The tourism sector is highly diverse with a predominance of small enterprises which lack individual scale, resources and knowledge to engage effectively in international marketing are required. Therefore partnership arrangements and State support are appropriate to marketing the tourism product. The acknowledgement that the State has a particular responsibility in supporting destination marketing to the island of Ireland in partnership with Northern Ireland Authorities and the representatives of the various segments of the tourist industry is closely in line with the IHF’s vision as to how the Irish tourism product could be most effectively marketed overseas.

The report’s acknowledgement of human resources as a critical component in Ireland’s tourism is in line with the IHF’s strategy and employment initiatives. "We particularly welcome the recommendation to establish a tourism careers promotion group comprising of key stakeholders, including students which would be designed to intensify and strengthen links with schools, communities and career guidance services. The IHF looks forward to participating in this group. This action, in addition to the recommendation to extend the remit and development responsibilities of Fáilte Ireland, the putting in place of a new human resources strategy to support professional career development and to position the industry as a highly attractive career choice, would be meaningful.

The IHF confirmed it subscribes to the new vision for Irish tourism as a dynamic innovative, sustainable and highly regarded sector – offering overseas and domestic customers a positive and memorable experience beyond their expectations.

"If you don’t know where you’re going, you’re sure to end up somewhere else" (Mark Twain)

In today’s fast paced and competitive business environment, the only constant seems to be change itself and this is particularly true of the hotel industry. When operating in such an environment, achieving good financial performance and business success is unlikely to happen by chance. This is why business planning has become so important for today’s hotel operator. Many are seeking professional advice in order to ensure that they are giving their business the best chance of success in the future.

Do you have a strategy?

Strategic planning involves looking ahead for several years and identifying the basic strategy of your organisation, the future direction you want the business to take and the gap that exists between your present position and your future aims.

Every hotel should have a mission statement – a mission statement describes in broad terms the purpose and nature of the business, the service it provides and the customers it seeks to satisfy. It provides continuity of direction and focus to everyone in the organisation.

An example of a mission statement could be:

"We aim to be a profitable, luxurious hotel offering first class services and facilities to our guests"

Strategic Planning – where do I start?

The main stages in strategic planning are as follows:

• Mission Statement

• Establish objectives

• Identify potential courses of action, i.e. strategies

• Evaluate alternative strategic options

• Select a strategy

• Implement the long term plan

Strategic planning begins with determining your mission statement and the establishment of your objectives. Objectives follow on from the mission statement. They state what you want to achieve and when you want to achieve it.

Your objectives should be SMART:

• Specific

• Measurable

• Achievable

• Realistic

• Timed

It is essential that everyone in the organisation understands where the business is going and what their role is in achieving the objectives set.

What do I need to consider in determining my strategy?

In selecting a competitive business strategy you should consider the following:

• What are your past successes and failures? Are there further opportunities in your past successes? Can you learn from your mistakes?

• What are strengths and weaknesses of your business? Does your strategy build on the strengths and minimise the weaknesses?

• What are the future opportunities and threats for your business? Does your strategy seize the opportunities that exist and counter the threats by contingency planning?

• What is happening in your external environment? What pressures are there on health and safety, environmental protection, employee and consumer protection which are likely to impact on your business?

• Do you know who your customers are? What are their needs? Do you provide them with the services and facilities that they require?

• Who are your competitors? Where are they? What is their reputation? What service and facilities do they provide? What are their strengths and weaknesses?

What strategy is right for me?

Answering the above questions is not an easy task but you do need to be able to do so if you are to assess the best strategy for you and your business.

You will also need to consider if your selected strategy is feasible – will it generate sufficient financial returns for you? Is it a high risk strategy? Do you have access to the necessary resources to fund the strategy?

Usually, in order to gain a competitive advantage it is necessary to select a generic strategy rather than attempting to be all things to all people. Such strategies could include:

• Cost leadership – aiming to be the lowest cost service provider

• Differentiation – providing a service that is different and is valued by guests

• Niche – aiming your service at a particular customer group or segment of the market The strategy that is chosen should be one that will enable your business to achieve its objectives.

I know my strategy – what next?

When an appropriate strategy is selected, long term plans should be devised to implement that strategy. The long-term plan should detail the targets that have been set and the actions and resources required in order to achieve that plan. From the long term plans, short term plans can then be devised. These usually take the form of an annual budget.

Strategic planning involves looking far into the future and there will always be a level of uncertainty but it does provide you with focus and direction which in the modern business world is essential to survival!

Next month: Short term planning – the annual budget

Eileen Corrigan, Senior Manager, Business Assurance and Advisory Services, BDO Simpson Xavier. Tel 01-4700182, email: ecorrigan@bdosx.ie Eileen Corrigan, BDO Simpson Xavier