IRISH TOURISM IN CRISIS WITH DECIMATED REVENUES
Irish Hotels Federation Annual Report Reveals

Irish tourism is an industry in crisis with hoteliers struggling to deal with decimated revenues and extremely difficult trading conditions which show no sign of being resolved. Total tourism revenues collapsed by 17% to €5.2 billion in 2009, their lowest level since 2004 with the British tourist market performing disastrously. Speaking today at the launch of the Irish Hotels Federation’s (IHF) 2009 Annual Report at its 72nd Annual Conference in Galway, John Power, Chief Executive stated that 2009 will regrettably, be remembered as the year when the industry dropped almost 1 million visitors and €1 billion revenue.

According to Mr Power, the drop in revenues was principally due to a 12% decline in overseas visitor numbers to 6.5 million in 2009 and a corresponding reduction of €900 million in the value of foreign exchange earnings of the sector. This was coupled with a drop in domestic trips of approximately 5% and a resultant reduction in revenue of approximately 9%.

The high dependence on the home market continued with 70% of hotel bednights now coming from the island of Ireland (66% from Republic of Ireland). The number of British visitors at just over three million was at the lowest level since 1997, down 16%. Mr Power states that the greatest challenge facing Irish tourism is how to recover share of the British market – Ireland’s most important source of tourism: “Demand dropped across all markets but was particularly severe from Britain. The number of British holiday visitors had been stable at approximately 1.7 million per annum over the past 10 years, before falling by 10% in 2008 and a further 16% in 2009.”

The effect of the decline in overseas visitors resulted in a fall in national room occupancies for a second consecutive year, reaching 55% – a level not experienced since the early 1980s. This drop in occupancy affected all regions of the country including Dublin which prior to 2008 had been the primary region for growth. Declines were most pronounced in the Midwest and Northwest of the country, reflecting the relative importance of US and British business.

Change in Overseas Visitor Numbers:

• Shannon Area, down 27%
• West, down 17%
• South-East, down 15%
• South-West, down 15%
• North-West, down 15%
• Midlands, down 9%
• Dublin, down 6%

The continued weakening of overseas markets and the serious overcapacity in hotel bedrooms has created a major economic challenge for the Irish hotel and guesthouse industry. The decline in occupancy was exacerbated by a substantial weakening in room rates by approximately 20%. These factors resulted in a reduction in revenue per available room in 2009 by well in excess of 20% compared with 2008.

Mr Power states, “The length and depth of the global recession is without precedent in modern times. Throughout the year, our members struggled to deal with decimated revenues caused by the combination of lower prices, excess capacity and low capacity utilisation rates, further intensified by the fact that their costs had not significantly reduced or even adjusted to the economic reality on the ground. As a vital indigenous industry, it is vital that tourism receives the recognition and support which it merits given its scale and overall contribution to the economy. With the right resources in place, tourism stands ready to assist the country’s return to economic recovery.”

According to Mr Power, in contrast to previous recoveries from downturns in demand for travel, the rebound this time is expected to be gradual over a period of several years. Most forecasts for travel and tourism suggest an overall modest rate of global growth in 2010 with the most optimistic expecting a demand increase of up to 3%. This would suggest it will take several years for recovery to pre-2008 levels of demand.

Notwithstanding the downturn, tourism remains Ireland’s most important indigenous industry, making a direct contribution of 4% to overall GNP in 2009 and supporting an estimated 200,000 jobs, of which 54,000 are in employed in the hotels and guesthouse sector alone. With an estimated 1.9 million people presently at work in Ireland, tourism expenditure supports over 11% of those in employment.

Visitor Numbers 2008

MARKET	2009 Actual	Change on previous year
Domestic Trips	7.9 million	-5%
Trips from Overseas	6.5 million	-12%
Britain	3.01 million	-16%
Mainland Europe	2.33 million	-9%
North America	0.89 million	-6%
Long-Haul	0.35 million	-12%

 

FOR INFORMATION:
Siobhan Molloy / Eoin Quinn Dublin office: 01 6760168
Weber Shandwick Mobile: 086 817 5066 / 087 233 2191

HOTEL & GUESTHOUSE STATISTICS 2009
72nd IHF ANNUAL CONFERENCE

Monday 1st & Tuesday 2nd March 2010

• 6.5 million overseas visitors to Ireland in 2009, a 12% decline on 2008;
• Tourism accounted for 4% GNP in 2009;
• €3.9 billion foreign exchange earnings in 2009 compared with €4.8 billion in 2008;
• Total tourism revenue in 2009 decreased by 17% to approximately €5.2 billion compared to €6.3 billion in 2008;
• 54,000 people employed in the hotel and guesthouse sector, making it the largest employer in the tourism sector;
• 903 hotels with 60,199 rooms (921 hotels with 60,600 rooms in 2008);
• 307 guesthouses with 3,677 rooms (337 guesthouses with 4,071 rooms in 2008);
• Total of over 63,800 hotel and guesthouse bedrooms in Ireland.