Tourism Barometer April 2012

Transcription

1 Tourism Barometer

2 Contents Page 1. Headline Findings Qualitative Findings Visitor Volumes in Profitability Average Room Yield Types of Booking Hotels (Ireland Market) Easter Expectations for Employment in Positive Factors in Issues of Concern in Appendix 1 Background and Methodology Appendix 2 - Copy of Questionnaire

3 Tourism Barometer 1. Headline Findings Background to the Tourism Barometer The Fáilte Ireland Tourism Barometer is a survey of tourism businesses designed to provide insight into tourism performance for the year to date and prospects for the remainder of the year. We received 769 responses to an online survey with tourism businesses between 2 nd and 20 th and conducted 91 top-up telephone interviews. We also conducted eight depth interviews with senior industry executives. More details on the methodology can be viewed in appendix 1. Confidence Index 1.1 Business confidence has now almost returned to heights last seen in Over half (55%) of respondents to the survey in the paid serviced accommodation (PSA) sector expect overall business levels in 2012 to be up on last year, with only one in five (21%) anticipating declines. This is a significant change following a number of years of pessimism. % businesses interviewed 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Business Sentiment Index re. Prospects for Following Years 7% 14% 10% 30% 16% 55% 26% 83% 70% 24% 44% 21% Up Same Down Base: Accommodation Providers (weighted to available rooms) Page 2 of 36

4 Tourism Barometer Visitor numbers up in 2012 for paid serviced accommodation 1.2 Just under half (47%) of respondents 1 in the paid serviced accommodation sector report an increase in visitor volumes to date in 2012 compared the same period last year. About three in ten (29%) report a decrease. 1.3 This positive result is mostly due to the strong performance in terms of visitor numbers of the hotel sector. Just over half (54%) of hotels report increased visitors; but this compares to a minority of guesthouses (19%) and B&Bs (11%) reporting increased visitors. Hotel visitor numbers are up but average room yields are down 1.4 Although visitor numbers are looking positive in 2012 for hotels, this increase has come at the expense of reduced rates, as was the case last year. About a third (32%) of hotels report an increased average room yield in 2012, but nearly half (45%) report a decrease. A good start to the year for attractions 1.5 Attractions have enjoyed a positive start to the year. About a third (34%) have increased their visitor numbers to date compared to this time last year and about half (51%) have achieved the same level. 1.6 Marketing appears to be a key reason behind success in the attractions sector, with about three in four (74%) stating own marketing as a positive factor affecting their business, and three in five (60%) citing marketing by local or national tourists boards. Domestic market up for paid serviced accommodation 1.7 Slightly under half (44%) of paid serviced accommodation respondents report increased domestic visitor levels year to date. 1.8 As with the overall figures however, results vary greatly by sector. Half (50%) of hotels have increased their domestic visitor numbers year to date, but the majority (63%) of B&Bs have experienced a decrease. Overseas visitor volumes fairly balanced for paid serviced accommodation 1.9 About a third (32%) of respondents in the paid serviced accommodation sector have experienced increased overseas visitors to date in 2012, but a similar proportion (34%) report a decrease. 1 weighted by available bedrooms in the sector Page 3 of 36

5 Tourism Barometer Mixed fortunes over Easter 1.10 Easter visitor numbers were disappointing in the Paid Serviced Accommodation (PSA) sector, with about two in five (41%) operators reporting a decrease in actual or expected numbers. Attractions performed well however, with two in five (40%) increasing their visitors compared to last year and nearly half (45%) achieving the same level. Positive outlook for Every sector apart from B&Bs expects 2012 visitor numbers to be up on Much is expected of the domestic and US markets. Full time staffing levels slightly down in Profit margins in the industry are being squeezed significantly by falling prices and rising costs, and this is inevitably taking its toll on staffing levels. Full time staffing levels are down in every sector. Repeat visitors and marketing are key in Two in three (66%) respondents say that repeat visitors are a positive factor likely to affect their business in About three in five (58%) cite own marketing as a likely positive factor, and just under half (46%) say marketing by local or national tourist boards. Fuel and energy costs the most common concern 1.14 Four in five (80%) respondents refer to fuel and energy costs as an issue of concern in This is followed by state of the national economy (72%), although there are some reports that the country has maybe turned the corner now Low-priced competition continues to be a major issue, especially in the PSA sector, where most (77%) mention this as a concern in Page 4 of 36

6 Tourism Barometer 2. Qualitative Findings We have conducted eight depth interviews with industry leaders (see appendix 1, para for more details). The main findings from these interviews are discussed below is generally expected to be busier than 2011, but still a long way to go 2.1 The general feeling across the different industry sectors is that 2012 is likely to be a better year than 2011 in terms of visitor numbers. However, the economic climate is still very tough, and receiving more visitors doesn t necessarily mean more profit. There s a good deal of positivity tour operators expect a better year than 2011 We haven t turned the corner yet, there s still a lot needs sorting out with the economy. It s the fourth year in a row that hotel rates are level or down they are now sometimes below the B&B rate Coach tourism seems busier than last year but operators aren t upbeat because rates aren t any higher Rising fuel prices affecting margins in most sectors 2.2 The cost of fuel is eating into profits directly or indirectly in most sectors, especially those most closely linked to transport. The effect in some sectors is that operators can survive, but there is no cash to invest in improving the product. Fuel price is taking away profit needed for investment in vehicles Tourism hotspots are doing well; other areas are not 2.3 Trade is good in tourism hotspots such as Dublin, Galway City and Killarney in fact it is hard for tour operators to find the required bed space at certain times of year. However, outside of the hotspots, even a short distance outside, times are tough. The restaurant sector is doing well in Dublin only. Outside Dublin it s in a negative decline 5 to 10% Ireland s value for money is improving 2.4 Ireland has suffered from an unfortunate reputation of being poor value for money for some time, but the feeling is this is definitely changing. Ireland is definitely much more competitive now Page 5 of 36

7 Tourism Barometer Much is expected from the US market 2.5 The consensus across sectors that receive a lot of business from the USA is that this market will be up this year. USA may be 6-7% up this year Germany the star performer in Europe because of increased access 2.6 The German market is looking positive this year as both Irish and German airlines have increased their routes between the two countries. Germany is performing very well for tour operators. Aer Lingus has increased routes and so has Lufthansa into Knock Impact of the Olympics is unclear 2.7 Whether the London Olympics will impact on tourism to Ireland and to what extent is still unclear. The four year extension of Ireland s short-stay visa waiver programme to nationalities such as the Chinese is thought to be very positive. On the negative side, the cost of air travel during the summer has increased significantly because of the Olympics. The visa extension is very positive as it was originally only going to be until the autumn. It always needed to be given more time anyway for the trade in Ireland to capitalise on the opportunity The cost of air travel during a six week period surrounding the Olympics is significantly higher than normal Page 6 of 36

8 Tourism Barometer 3. Visitor Volumes in 2012 Overall visitor volumes in 2012 Q2 "How does the volume of your overall business to date this year compare with the same period last year?" Down on 2011 Same as 2011 Up on 2011 Hotels 23% 23% 54% Golf clubs 33% 29% 38% Hostels 27% 38% 35% Attractions 15% 51% 34% Self catering 34% 39% 27% Caravan / campsites 43% 31% 26% Guesthouses 43% 38% 19% B&Bs 65% 24% 11% Paid serviced acc'm 29% 24% 47% Base: 795 In all charts, don t know or not applicable answers to the question have been excluded and the percentages re-based. Results are split by sector and ordered by proportion answering an increase in numbers (shown in green). In addition to the individual sector results, the last bar on each chart shows weighted results for the paid serviced accommodation sector; these figures have been derived from the hotel, guesthouse and B&B results, with weightings applied in accordance with each sector s share of total bedrooms within paid serviced accommodation. Positive start to the year in some sectors 3.1 Nearly half (47%) of businesses in weighted paid serviced accommodation report that visitors are up compared to this time last year. However the difference in performance between the hotel sector and the guesthouse and B&B sectors is substantial. Profit margins under continued pressure however 3.2 The very positive picture seen in hotel visitor numbers should be viewed with some caution however, as pressure on profit margins from rising costs and Page 7 of 36

9 Tourism Barometer aggressive price competition in the market means that many businesses are fighting for survival. Domestic visitors Q3a "How does the volume of your overall business to date this year compare with the same period last year from the Republic of Ireland?" Down on 2011 Same as 2011 Up on 2011 Hotels 20% 30% 50% Golf clubs 17% 41% 42% Attractions 9% 56% 35% Hostels 32% 36% 32% Self catering 25% 47% 28% Caravan / campsites 34% 41% 25% Guesthouses 43% 39% 18% B&Bs 63% 27% 10% Paid serviced acc'm 26% 30% 44% Base: 744 Domestic market by sector reflects the overall market 3.3 The domestic visitor volumes by sector reflect the overall volumes by sector, with hotels, golf clubs and attractions enjoying a busy start to the year, but at the other end of the scale, guesthouses and B&Bs are less positive. Page 8 of 36

10 Tourism Barometer Visitors from Northern Ireland Q3b "How does the volume of your overall business to date this year compare with the same period last year from Northern Ireland?" Down on 2011 Same as 2011 Up on 2011 Golf clubs 38% 38% 24% Caravan / campsites 34% 45% 21% Hotels 27% 58% 15% Self catering 35% 52% 13% Hostels 44% 44% 12% Attractions 22% 69% 9% Guesthouses 59% 35% 6% B&Bs 68% 27% 5% Paid serviced acc'm 33% 54% 13% Base: 661 Northern Ireland market continues to be down significantly 3.4 Visitors from Northern Ireland are significantly down in every sector, as was also the case throughout 2011 compared to Page 9 of 36

11 Tourism Barometer Overseas visitors Q3c "How does the volume of your overall business to date this year compare with the same period last year from overseas?" Down on 2011 Same as 2011 Up on 2011 Hostels 22% 43% 35% Hotels 29% 36% 35% Attractions 20% 51% 29% Self catering 37% 39% 24% Caravan / campsites 38% 38% 24% Guesthouses 45% 36% 19% Golf clubs 45% 41% 14% B&Bs 64% 24% 12% Paid serviced acc'm 34% 34% 32% Base: 746 Overseas visitor volumes fairly balanced for paid serviced accommodation 3.5 About a third (32%) of respondents in the paid serviced accommodation sector have experienced increased overseas visitors to date in 2012, but a similar proportion (34%) report a decrease. Page 10 of 36

12 Tourism Barometer Visitors from Great Britain Charts now show the overseas visitor volumes by key individual markets, starting with Great Britain below. Q4a "How does the volume of your overall business to date this year compare with the same period last year from Great Britain?" Down on 2011 Same as 2011 Up on 2011 Self catering 34% 34% 32% Hostels 31% 40% 29% Hotels 26% 47% 27% Caravan / campsites 42% 39% 19% Attractions 22% 61% 17% Guesthouses 45% 39% 16% Golf clubs 33% 57% 10% B&Bs 61% 29% 10% Paid serviced acc'm 31% 45% 24% Base: 705 Visitors from Britain slightly down, but hints of recovery was a bad year for tourism from Britain, with many British holidaymakers remaining on the other side of the Irish Sea taking staycations. 3.7 Although 2012 has not seen a great start for this market, there are hints that the British may be starting to come again. The exchange rate is thought to play a part. I think the strength of sterling against the euro will encourage people to come over here Golf club Page 11 of 36

13 Tourism Barometer Visitors from France Q4b "How does the volume of your overall business to date this year compare with the same period last year from France?" Down on 2011 Same as 2011 Up on 2011 Hostels 29% 39% 32% Attractions 24% 52% 24% Self catering 36% 43% 21% Guesthouses 43% 41% 16% Caravan / campsites 33% 54% 13% Hotels 24% 65% 11% B&Bs 62% 27% 11% Golf clubs 47% 53% Paid serviced acc'm 29% 60% 11% Base: 651 French market slightly down so far this year 3.8 The French market was quite stable in 2011 but it is down so far this year in most sectors. Page 12 of 36

14 Tourism Barometer Visitors from Germany Q4c "How does the volume of your overall business to date this year compare with the same period last year from Germany?" Down on 2011 Same as 2011 Up on 2011 Hostels 23% 47% 30% Attractions 21% 55% 24% Hotels 20% 63% 17% Caravan / campsites 37% 46% 17% Guesthouses 37% 48% 15% Self catering 36% 50% 14% Golf clubs 41% 47% 12% B&Bs 63% 28% 9% Paid serviced acc'm 26% 58% 16% Base: 651 German market similar to France 3.9 The German market performance has been similar to that of the French market so far this year, with visitor volumes down in most sectors. We ve noticed an increase in German visitors, mostly because of our own marketing and that of the tourist board Hostel Page 13 of 36

15 Tourism Barometer Visitors from USA Q4d "How does the volume of your overall business to date this year compare with the same period last year from USA?" Down on 2011 Same as 2011 Up on 2011 Attractions 23% 41% 36% Hostels 29% 40% 31% Hotels 28% 40% 32% Self catering 36% 48% 16% Guesthouses 43% 40% 17% B&Bs 65% 23% 12% Golf clubs 44% 50% 6% Caravan / campsites 62% 38% Paid serviced acc'm 33% 38% 29% Base: 672 American market remaining strong for attractions and hotels 3.10 The attractions and hotel sectors saw good visitor levels in 2011 from the American market, and 2012 has started reasonably well. Our American visitors are up, but not those who come directly from the states. I would say about 75% of them are students studying in Europe who come over for weekends or spring break Hostel Enquiries from North America seem to be up this year B&B Page 14 of 36

16 Tourism Barometer 4. Profitability Q5 "How does your overall profitability to date this year compare with the same period last year?" Down on 2011 Same as 2011 Up on 2011 Hotels 35% 28% 37% Attractions 25% 44% 31% Self catering 47% 31% 22% Hostels 33% 46% 21% Golf clubs 41% 41% 18% Caravan / campsites 48% 38% 14% Guesthouses 63% 24% 13% B&Bs 74% 20% 6% Paid serviced acc'm 41% 27% 32% Base: 748 Profit margins under continued pressure especially in smaller businesses 4.1 Some businesses, especially in the hotel and attractions sectors, are managing to increase profitability compared to last year in spite of testing times. 4.2 However many businesses, especially in smaller serviced accommodation, are under huge pressure to make ends meet. Aggressive price competition brought on by over-capacity makes it very difficult to maintain prices let alone increase them, whilst at the other end margins are being eroded by rising operating costs. There s a downwards pressure on prices, but there s also a threshold that you can t go below or you ll not make any money. Marginal profit is better than none that would see hotel businesses close Hotel Page 15 of 36

17 Tourism Barometer I genuinely believe I will be forced out of the B&B within the next two years as the profit margin is shrinking at an alarming rate B&B 4.3 Reduced profit over a period of time eventually starts to affect the quality of the product as there is no money to make improvements. High overheads and reduced profits make it impossible to revamp premises B&B Page 16 of 36

18 Tourism Barometer 5. Average Room Yield Q6 (HOTELS) "How does your average room yield to date this year compare with the same period last year?" Down on 2011 Same as 2011 Up on 2011 Hotels 45% 23% 32% Base: 129 The above question has only been asked of hotel operators 5.1 Visitor levels are up in 2012 for over half (54%) of hotels, but average room yield is only up for about a third (32%). Increased visitor numbers at lower rates 5.2 It appears that increased visitor volumes continue to be achieved mostly by lowering rates. Hotels can make back revenue through their facilities such as the bar and the restaurant, but average room yields are taking a hit again this year. Page 17 of 36

19 Tourism Barometer 6. Types of Booking Hotels (Ireland Market) Q7 (HOTELS) "Thinking about your Ireland market business to date this year, how have each of the following performed compared with the same period last year?" Down significantly Down slightly Same Up slightly Up significantly Weekend breaks 9% 20% 24% 39% 8% Special events 9% 15% 34% 32% 10% Business / corporate 12% 22% 28% 30% 8% Mid week breaks 14% 25% 33% 25% 3% General leisure 8% 20% 45% 21% 6% Some signs of the corporate market picking up 6.1 When the global economy first ran into difficulties, business tourism was one of the first areas to be hit hard as companies cut back on events, face-to-face meetings and travel. There are signs that the market may be on the up again. There also appears to be an upturn in the level of weekend breaks and special events in the domestic market perhaps reflecting an improvement in the level of disposable income or consumer sentiment in the market. Page 18 of 36

20 Tourism Barometer 7. Easter Q8 "How do you expect the volume of your overall business to perform during Easter compared to Easter last year? (If you are completing this after Easter, how did your business perform?)" Down on Easter 2011 Same as Easter 2011 Up on Easter 2011 Attractions 15% 45% 40% Self catering 28% 33% 39% Hostels 34% 30% 36% Hotels 38% 36% 26% Golf clubs 32% 48% 20% Caravan / campsites 49% 33% 18% B&Bs 65% 25% 10% Guesthouses 41% 50% 9% Paid serviced acc'm 41% 36% 23% The online survey was launched a few days before Easter, but many responses were made after Easter, hence the reason for two different questions. Mixed fortunes over Easter 7.1 Easter visitor numbers were disappointing in the PSA sector, with about two in five (41%) operators reporting a decrease in actual or expected numbers. Attractions performed well however, with two in five (40%) increasing their visitors and nearly half (45%) achieving the same level. Easter came earlier 7.2 Last year Easter Sunday fell two weeks later than this year. Tourism business operators often comment that Easter is normally busier the later it falls. Earlier Easter made a difference. Easter is just always better when it falls later the weather is slightly warmer, the timing of the school holidays works out a bit better Qualitative interview Page 19 of 36

21 Tourism Barometer 8. Expectations for 2012 Overall expectations Q9 "How do you expect the volume of your business to perform during the remainder of this year compared to the same period last year?" Down on 2011 Same as 2011 Up on 2011 Hotels 16% 22% 62% Hostels 18% 29% 53% Attractions 15% 34% 51% Self catering 22% 33% 45% Caravan / campsites 26% 30% 44% Golf clubs 22% 39% 39% Guesthouses 30% 34% 36% B&Bs 52% 32% 16% Paid serviced acc'm 21% 24% 55% Base: 725 High hopes for Expectations for 2012 are high across the industry, with hotels, hostels and attractions being particularly optimistic. The only sector with low expectations is B&Bs. Reasons to be positive reduced VAT, greater efficiencies... improved market penetration in existing and new markets, rise in economy of target markets, more disposable spend in home market Hotel Page 20 of 36

22 Tourism Barometer Domestic expectations Q10a "How do you expect the volume of your overall business to perform during the remainder of this year compared to the same period last year from Republic of Ireland?" Down on 2011 Same as 2011 Up on 2011 Attractions 12% 35% 53% Hotels 16% 34% 50% Golf clubs 18% 41% 41% Caravan / campsites 10% 51% 39% Self catering 17% 46% 37% Hostels 22% 42% 36% Guesthouses 34% 43% 23% B&Bs 49% 36% 15% Paid serviced acc'm 20% 35% 45% Base: 697 Strong expectations for the domestic market 8.2 Optimism for the domestic market is high in every sector apart from the smaller serviced sectors. I think that the domestic market would improve greatly if we had a really good summer this year Caravan park Page 21 of 36

23 Tourism Barometer Northern Ireland expectations Q10b "How do you expect the volume of your overall business to perform during the remainder of this year compared to the same period last year from Northern Ireland?" Down on 2011 Same as 2011 Up on 2011 Caravan / campsites 30% 43% 27% Attractions 24% 54% 22% Self catering 25% 54% 21% Hostels 28% 51% 21% Golf clubs 40% 40% 20% Hotels 21% 63% 16% Guesthouses 32% 54% 14% B&Bs 57% 36% 7% Paid serviced acc'm 26% 59% 15% Base: 642 Not much expected of Northern Ireland 8.3 Visitor levels from Northern Ireland were significantly down throughout On the whole, this market is not expected to pick up in The access from Northern Ireland is the greatest concern for us, as that is where the majority of our business comes from Golf club Page 22 of 36

24 Tourism Barometer Expectations from overseas Q10c "How do you expect the volume of your overall business to perform during the remainder of this year compared to the same period last year from Overseas?" Down on 2011 Same as 2011 Up on 2011 Hotels 18% 27% 55% Hostels 16% 31% 53% Attractions 15% 36% 49% Guesthouses 29% 38% 33% Golf clubs 37% 31% 32% Self catering 23% 49% 28% B&Bs 50% 27% 23% Caravan / campsites 39% 42% 19% Paid serviced acc'm 22% 28% 50% Base: 679 Optimistic outlook for overseas 8.4 The industry has high expectations for overseas visitors in 2012, especially the hotel sector, where over half (55%) of operators expect the overseas market to be up. I expect an improvement on the number of overseas walkers this year. Bookings to date indicate this B&B Page 23 of 36

25 Tourism Barometer Expectations for Great Britain Charts now show the overseas visitor volumes by key individual markets, starting with Great Britain below. Q11a "How do you expect the volume of your business to perform during the remainder of this year compared to the same period last year from Great Britain?" Down on 2011 Same as 2011 Up on 2011 Hostels 23% 35% 42% Hotels 14% 46% 40% Attractions 23% 42% 35% Guesthouses 31% 38% 31% Self catering 24% 46% 30% Golf clubs 37% 37% 26% Caravan / campsites 36% 40% 24% B&Bs 51% 33% 16% Paid serviced acc'm 19% 44% 37% Base: 634 Cautious optimism over Britain was a disappointing year for this market as many British holidaymakers stayed away from Ireland and remained in their own country. Many operators are eagerly awaiting their return, and there is cautious optimism that this market might pick up again in I think the conversion rate with the euro has improved slightly so we might get more visitors from the UK Caravan park Ireland has had a lot of international press thanks to the visits of the US President and the Queen. I do hope we see benefits from both of these visits Attraction Page 24 of 36

26 Tourism Barometer Expectations for France Q11b "How do you expect the volume of your business to perform during the remainder of this year compared to the same period last year from France?" Down on 2011 Same as 2011 Up on 2011 Hostels 21% 36% 43% Attractions 16% 47% 37% Guesthouses 26% 42% 32% Self catering 24% 50% 26% Hotels 17% 63% 20% B&Bs 49% 32% 19% Caravan / campsites 35% 52% 13% Golf clubs 53% 47% Paid serviced acc'm 21% 59% 20% Base: 603 Steady France 8.6 The French market has started a bit down this year, but the general expectation is that it will perform at a similar level to last year through the remainder of the year. Page 25 of 36

27 Tourism Barometer Expectations for Germany Q11c "How do you expect the volume of your business to perform during the remainder of this year compared to the same period last year from Germany?" Down on 2011 Same as 2011 Up on 2011 Hostels 19% 37% 44% Attractions 11% 51% 38% Hotels 16% 47% 37% Guesthouses 23% 44% 33% Self catering 22% 50% 28% B&Bs 49% 32% 19% Caravan / campsites 43% 44% 13% Golf clubs 50% 44% 6% Paid serviced acc'm 20% 45% 35% Base: 612 More expected of Germany 8.7 Most of the main sectors expect to see an increase in German visitors this year. Only the B&B sector is pessimistic (the caravan and golf club figures for this question are based on low base numbers and so should be treated with caution). Influx of German visitors to Donegal Hotel We have been getting a lot of Germans recently. The gardens tours especially are very popular with them Attraction Page 26 of 36

28 Tourism Barometer Expectations for USA Q11d "How do you expect the volume of your business to perform during the remainder of this year compared to the same period last year from USA?" Down on 2011 Same as 2011 Up on 2011 Attractions 16% 35% 49% Hotels 19% 32% 49% Hostels 32% 36% 32% Guesthouses 30% 41% 29% Self catering 22% 50% 28% B&Bs 53% 28% 19% Golf clubs 41% 41% 18% Caravan / campsites 47% 53% Paid serviced acc'm 23% 32% 45% Base:608 High expectations for USA 8.8 Expectations for the US market are the highest of any major overseas market. Hotel and attraction operators are especially optimistic, with half (49%) expecting to see increased visitors. Improved economic situation in USA better value for dollar Hotel is presidential election year in America. Some operators say this makes a big difference to American visitor numbers, but others disagree. We find that we get a lot fewer American visitors whenever there s a presidential election on, the difference is considerable Caravan park I lived in America through two elections and never noticed it made any difference to travel Qualitative interview Page 27 of 36

29 Tourism Barometer 9. Employment in 2012 Q12 "Thinking about the staff that you currently employ, are the numbers employed up, down or the same compared to this time last year?" Down on 2011 Same as 2011 Up on 2011 Full time 24% 70% 6% Part time 26% 62% 12% Seasonal 25% 64% 11% As many respondents (around half) do not employ any staff (other than the proprietors), base numbers for the employment questions are low and so results are grouped overall. In any case, differences in results by sector are not particularly significant. Full time staffing levels slightly down in 2012 Base: The majority of businesses expect to maintain staffing levels in However, profit margins in the industry are being squeezed significantly by falling prices and rising costs, and this is inevitably taking its toll on staffing levels for some businesses. Page 28 of 36

30 Tourism Barometer 10. Positive Factors in 2012 Q13 "Which, if any, of the following positive factors are likely to affect your business this year?" (PROMPTED) Repeat visitors 66% Own marketing 58% Reduced rates Irish people holidaying in Ireland Marketing by local or national tourist boards Weather Local events Improved overseas visitor access to Ireland 49% 47% 46% 44% 44% 36% Improved road access around Ireland 26% None of the above 5% 0% 20% 40% 60% 80% Base: 860 Repeat visitors remain the most frequently mentioned positive factor 10.1 Two in three (66%) respondents say that repeat visitors are a positive factor likely to affect their business in This was also the most frequently mentioned positive factor in During challenging economic times, this particular visitor group is invaluable. I would say that about 70% of our business is repeat trade, but we do find it difficult bringing in new customers Self-catering Marketing by businesses and tourist boards 10.2 Many businesses have commented on the importance of their own marketing and marketing undertaken by local and national tourist boards. Online marketing in various forms and the offering of different events and activities have paid dividends for some operators. Page 29 of 36

31 Tourism Barometer A new website showing many more outdoor opportunities for overseas visitors especially Guesthouse We add specials to our website on a regular basis and this seems to boost business B&B We offer many freebies archery, music lessons, free bikes, kites, canoe, garden games etc B&B We have had great results from Facebook offers Self-catering Social media, including Twitter and Facebook, seem to bring in more business for us Hostel Tourism Ireland seem to be doing a good job overseas for us! B&B Reducing rates to maintain or increase visitor volumes 10.3 The positive visitor volumes discussed earlier in some sectors are largely coming at the expense of reduced rates. Offering very cheap deals has increased business Hotel Volvo Ocean Race and the Titanic 10.4 Nearly half (44%) of respondents state local events as a likely positive in Recent or upcoming events include the Volvo Ocean Race (finishing in Galway in July) and the 100 th anniversary of the Titanic. Some call for more events to boost tourism. We need more events every year. We should try and host a major event, musical, sporting, arts every month Guesthouse The Volvo sailing event should have a big impact on visitor levels, so we are looking forward to that Guesthouse The year of the Titanic in Cobh B&B The whole Titanic thing seems to have encouraged people over here Hostel Page 30 of 36

32 Tourism Barometer We have a sister hotel situated near a popular event spot, so when there s an event on we get a lot of bookings we wouldn t normally get when the sister hotel is full Hotel Impact of the Olympics? 10.5 Several comments have been made about the impact of the London Olympics this year. Opinions differ on whether it will have a significant impact on Ireland or not and for what reasons; the truth seems to be that no-one really knows yet. Huge visitor numbers to UK for Olympics may result in some coming over to Ireland B&B We believe that those travelling from China, Japan and America etc will... visit the Republic of Ireland too Attraction Avoiding the Olympics in London might drive tourists to Dublin Attraction Page 31 of 36

33 Tourism Barometer 11. Issues of Concern in 2012 Q14 "Which, if any, of the following issues of concern are likely to affect your business this year?" (PROMPTED) Fuel & energy costs State of the national economy State of the global economy Low priced competition 80% 72% 67% 66% Visitors spending less Other operating costs Lack of bookings Perception of poor value for Cost of overseas visitor access to Unapproved accommodation Overseas visitor access to Ireland 49% 46% 45% 40% 37% 34% 28% None of the above 1% Base: 860 Fuel and energy costs the most common concern 11.1 Four in five (80%) respondents state fuel and energy costs as an issue of concern in This is the most frequently mentioned concern. Fuel and energy costs are one of our biggest problems, partly because our rooms are now generating less profit Hotel I think one of the biggest problems is the cost of fuel in Ireland, which could put people off travelling around the country Guesthouse Page 32 of 36

34 Tourism Barometer Global and national economies mixed views 11.2 The state of the global and national economies continues to concern many operators, although some believe that the tide is slowly turning. The Irish government seem to have more direction recently with regard to solving the problems in Ireland Caravan park 11.3 It is also worth noting that harsh economic times are not necessarily a bad thing for some operators, as holidaymakers seek cheaper types of accommodation. The national economy has had a positive effect on our business as more people are camping/caravanning rather than spending more on a hotel Caravan park Low-priced competition the most significant worry for many 11.4 Although more respondents have ticked other concerns such as fuel & energy costs and the state of the economy, open comments show that low-priced competition is probably the most significant concern of all in the industry. Many operators in the PSA sector comment on being on the brink of having to give up the business for this reason. Perception of value for money in Ireland still poor, or improving? 11.5 Two in five (40%) respondents have stated perception of poor value for money in Ireland being a concern in 2012, but this is a little lower than when the same question was asked in December 2011 (49%). A number of comments suggest that perception is improving. I think people in Ireland have realised that they can t charge what they want anymore and prices have become more competitive, so the perception that there is poor value for money here is really changing for the better Self-catering I think the perception of poor value for money in Ireland has dropped and as a result we are getting more people from Europe and America. Plus Irish pubs and restaurants have been putting on good deals, which makes visiting them seem like better value for money Hostel Overseas visitor access to Ireland 11.6 There have been changes recently, both positive and negative, in terms of overseas access to Ireland. On the positive side, there are new routes into Knock airport from mainland Europe. This is having a very positive effect on businesses based in the area. New access routes from France, Germany, Italy and Spain to Ireland West airport, Knock Page 33 of 36

35 Tourism Barometer Self-catering Flights from Düsseldorf and France coming to Knock Attraction 11.7 On the other hand, the continued lack of flights into Shannon airport is a major concern to businesses further south down the west coast of Ireland. The decrease in US capacity is worrying Shannon s under-performance is a big factor on numbers in the west Hotel The decrease in the amount of flights to and from Shannon airport has a huge impact on tourism business in the region Guesthouse 11.8 The loss of the Cork-Swansea ferry is a significant blow to some businesses in the south west, especially caravan sites, which rely on visitors from Britain bringing their caravans over on the ferry. Some comments have also been made again about the cost of ferry travel. The loss of the Cork ferry resulted in cancellations for both early and main season B&B Sky high ferry prices... as expat Britons who travel back regularly with a caravan and from feedback from our customers & friends in the UK we know this is a huge barrier to people coming to Ireland Caravan park Page 34 of 36

36 Tourism Barometer 12. Appendix 1 Background and Methodology Background and Objectives 12.1 The Fáilte Ireland Tourism Barometer is a survey of tourism businesses designed to provide insight into tourism performance for the year to date and prospects for the remainder of the season or coming year. It has been conducted regularly since In April 2011, an independent research agency, was commissioned to conduct the survey in 2011 and Fieldwork for this first 2012 wave took place between 2 nd and 20 th April. The objectives were to measure: Business performance to date in 2012 in terms of visitor volume overall and by key markets and profitability Average room yield year to date (hotels) Domestic performance by types of booking (hotels) Visitor volume expectations for the remainder of 2012 Employment levels Positive factors and issues of concern affecting business Methodology 12.4 The methodology used was a combination of an online survey and telephone interviews Fáilte Ireland and worked together to produce a questionnaire for online and telephone interviewing. A copy of the questionnaire is included in appendix Fáilte Ireland provided a database of 3,272 usable contacts (i.e. not opted out) for the survey spread across eight industry sectors (discussed under sampling below). An was sent on 2 nd April to all contacts on the database containing a link to the online survey and an explanation of the survey objectives. Two subsequent reminder s were sent to nonresponders A total of 769 responses were received to the online survey a response rate of 24% Following this, we conducted 91 top-up interviews by telephone with nonresponders in order to improve the robustness of their individual sample sizes so that results can be reported by sector. Interviews were conducted in daytime and evening hours with business owners or managers. Page 35 of 36

37 Tourism Barometer 12.9 Both the telephone and the online surveys were brought to a close on 20 th April. Sampling The table below shows the sample split by sector and interview methodology: Sector Online responses Telephone top-ups Total sample size Hotels Guesthouses Bed & Breakfast Self-catering Caravan / campsites Hostels Attractions Golf clubs Total Interviews for Contextual Background In a separate exercise, we conducted eight in-depth telephone interviews with senior executives in key organisations. The purpose of these interviews was to provide a contextual background to the quantitative findings, and this is given in section 2 before the findings to the main quantitative survey. The key organisations interviewed were: Incoming Tour Operators Association Bed & Breakfast Ireland Irish Boat Rental Association Restaurants Association of Ireland Irish Ferries Coach Tourism and Transport Council Irish Caravan and Camping Council Car Rental Council Page 36 of 36

38 Tourism Barometer - Which of the following best describes your business type? (TICK ONE ONLY) Hotel... Guesthouse... Bed & Breakfast... Self catering... Caravan / campsite... Hostel... Attraction... Golf club... (ACCOMMODATION) Please note that the following questions refer to your accommodation business only (GOLF CLUBS) Please note that the following questions refer to your tourism 'green fee' business only Q1 Has your business been established since before the start of 2011? Yes... Go to Q2 No... Go to Q13 Q2 Q3 Q4 Q5 How does the volume of your overall business to date this year compare with the same period last year? Up on Same as Down on Don't know... How does the volume of your overall business to date this year compare with the same period last year from each of the following markets? (N.B. If you never receive visitors from a particular market on the list then please tick 'not applicable') Up on 2011 Same as 2011 Down on 2011 Don't know Not applicable Republic of Ireland Northern Ireland Overseas Looking at your overseas business in more detail, how does the volume of your business to date this year compare with the same period last year from each of the following markets? (N.B. If you never receive visitors from a particular market on the list then please tick 'not applicable') Up on 2011 Same as 2011 Down on 2011 Don't know Not applicable Great Britain France Germany USA How does your overall profitability to date this year compare with the same period last year? Up on Same as Down on Don't know...

39 Q6 Q7 Q8 Q9 Q10 Q11 Q12 (HOTELS) How does your average room yield to date this year compare with the same period last year? Up on Same as Down on Don't know... (HOTELS) Thinking about your Ireland market business to date this year, how have each of the following performed compared with the same period last year? Up Up slightly Same Down significantly slightly Down Don't know Not significantly applicable Weekend breaks Mid-week breaks General leisure Business/corporate Special events How do you expect the volume of your overall business to perform during Easter compared to Easter last year? (N.B. If you are completing this after Easter, how did your business perform during Easter?) Up on Easter Same as Easter Down on Easter Don't know... Not applicable... How do you expect the volume of your overall business to perform during the remainder of this year compared to the same period last year? Up on Same as Down on Don't know... How do you expect the volume of your overall business to perform during the remainder of this year compared to the same period last year from each of the following markets? Up on 2011 Same as 2011 Down on 2011 Don't know Not applicable Republic of Ireland Northern Ireland Overseas How do you expect the volume of your overseas business to perform during the remainder of this year compared to the same period last year from each of the following markets? Up on 2011 Same as 2011 Down on 2011 Don't know Not applicable Great Britain France Germany USA Thinking about the number of staff that you currently employ, that is full time, part time and seasonal, are the numbers currently employed up, down or the same for each type of employee compared to this time last year? (N.B. If you don't currently employ a particular type of employee on the list and didn't last year either, please use the 'not applicable' option) Up on last year Same as last year Down on last year Don't know Not applicable Full time staff Part time staff Seasonal staff

40 Q13 Which, if any, of the following positive factors are likely to affect your business this year? (PLEASE TICK ALL THAT APPLY) Weather... Own marketing... Marketing by local or national tourist boards... Improved road access around Ireland... Improved overseas visitor access to Ireland... Local events... Repeat visitors... Irish people holidaying in Ireland... Reduced rates... None of the above... Are there any other positive factors likely to affect your business this year which you would like to comment on? Q14 Which, if any, of the following issues of concern are likely to affect your business this year? (PLEASE TICK ALL THAT APPLY) Low-priced competition... Fuel and energy costs... Other operating costs... State of the national economy... State of the global economy... Perception of poor value for money in Ireland... Lack of bookings... Visitors spending less... Overseas visitor access to Ireland... Cost of overseas visitor access to Ireland... Unapproved accommodation operators... None of the above... Are there any other issues of concern likely to affect your business this year which you would like to comment on? If you would like future surveys to be sent to an address different from the one we used this time, please state the new address below. Otherwise please leave the box blank. All information that is provided is strictly confidential and any contact details provided by you will only be used by in administering the Tourism Barometer during Thank you for completing Fáilte Ireland's Tourism Barometer for. Please now click on 'submit' below.