Wave 2 September
Contents Page No: Introduction Accommodation 4 Ireland Market 5 Activity Providers, Attractions, Retail, Restaurants and Transport 6 Overseas Market Performance 7 Prospects 8 Factors Impacting on Performance 9 Operational Issues 10 Employment 10 Index to Charts and Appendices 11 Page 2
Introduction The Tourism Barometer is a state of the season survey carried out by Millward Brown Ulster on behalf of Fáilte Ireland. The objective of the survey is to obtain an insight into the performance of all sectors of the industry in Ireland for the year to date compared to the corresponding period in 2008, and to determine the industry s expectations for the remainder of the year. The survey was conducted over a two week period from the 1 st to the 15 th of September 2009. In total 1284 interviews were conducted, details of which are outlined in the analysis of sample (Appendix 1). Page
Accommodation Overall Bednights It is the most severe recession in decades and the tourism industry, like a lot of other industries, has been hit hard. As with the findings in June 2009, not surprisingly, all accommodation sectors report overall bednight volumes to be down compared to last year. The majority of hotels, guesthouses, B&Bs, hostels and the selfcatering establishments all reported a fall in overall demand compared to last year. Although more than half of all caravan and camping establishments reported a fall in demand, it is the sector least effected. More than a third reported overall demand for bednights to be up. (See Chart 1) Hotels The downturn in bednight volumes in the hotel sector over the season so far can largely be attributed to falling demand in the overseas markets. The volume of domestic bednights is also perceived to be down on last year by half of all hoteliers, however almost four in ten cited an increase in demand compared to the same period last year. The continued strength of the Euro against Sterling has contributed to a declining Northern Ireland performance with twothirds of hoteliers citing a fall in demand from this source compared to the same period last year. (See Chart 2a) Against this background, it is not surprising that almost all hoteliers reported average room yields to be down on last year. (See Chart 2b) Guesthouses and B&Bs The weak performance of both the overseas and the Northern Ireland markets has resulted in a poor season so far for guesthouses. The majority of guesthouses also report the domestic market to be down on the corresponding period in 2008. (See Chart ) The B&B sector experienced the biggest fall in demand, with the down turn in bednight volumes largely being attributable to falling demand in the overseas market. The volume of overseas bednights is perceived to be down on last year by almost nine in ten B&B proprietors. (See Chart 4) Page 4
Self Catering The fall in overall bednights in the selfcatering sector is again mainly due to the poor performance of the overseas market. Although a majority of proprietors reported bednight volumes from the domestic and Northern Ireland markets to be down, almost half and more than four in ten selfcatering establishments, respectively, stated that business generated from these markets was either up or on a par with the same period last year. (See Chart 5) Caravan & Camping A softening in overseas and Northern Ireland demand is the key contributory factor in the overall decline in the caravan and camping sector. In contrast, the domestic market has performed strongly with almost half of all proprietors reporting a growth in bednights. (See Chart 6) Hostels Hostels reported business to be down across all market areas, with the decline in overseas mainly attributable to the overall fall in demand. Although the majority of proprietors in the domestic and Northern Ireland markets cited a fall in demand, more than a quarter of all hostel owners stated that demand from Northern Ireland and the local market was on a par to last year, and one in ten establishments reported an increase in domestic demand. (See Chart 7) Ireland Market Hoteliers have experienced falling domestic demand compared to 2008 and the evidence suggests that the downturn can be attributed to a reduction in business across each of the main domestic market segments. Almost three quarters of hoteliers stated that business / corporate bednights were down slightly or down significantly on last year, and almost seven in ten reported their special event business down. Although more than half of all hoteliers stated that weekend breaks, midweek breaks and general leisure breaks were down slightly or significantly on last year, the extent of the decline is less prominent than was stated in the June instalment of the Tourism Barometer. More than four in ten reported weekend breaks either up or on a par with last year. (See Chart 8) Page 5
Activity Providers, Attractions, Retail, Restaurants and Transport Activities The majority of all activity providers have experienced a decline in overall business compared to the same period last year. Consistent with the findings presented in June and earlier instalments of the Tourism Barometer, equestrian establishments have performed better (relatively speaking) than other activity providers. More than seven in ten angling establishments, golf courses and cruising companies report tourism business to be down on the same period last year. (See Chart 9) Visitor Attractions, Retail Establishments, Restaurants and Language Schools (EFL) Restaurants were added to the sample list for the first time in the September instalment of the Tourism Barometer, however, caution is advised due to a low response rate. Almost all responding restaurateurs stated that business was down this year compared to the same period last year. Retailers and language schools have each experienced a softening in tourism demand. In both cases, a majority of managers report business to be down this year compared to the same period last year. Retailers have been particularly affected by the downturn in overseas business, however, a third of language schools cited business levels either on a par or up on last year. The attractions performed better, relatively speaking, almost half of all attraction managers cited growth regarding the performance of tourism business compared to the same period last year. This growth has been primarily due to more than half of attractions proprietors reporting an increase in domestic visits. (See Chart 10) Car Hire and Coach Operators The June instalment of the Tourism Barometer provided evidence of a disappointing start to the year for coach operators and, in particular, car hire companies. Unfortunately, the peak season has not bought about any improvement. In a particularly challenging trading environment three quarters of coach operators and more than eight in ten car hire companies reported reduced levels of tourism demand. (See Chart 10) More than eight in ten coach operators and car hire companies stated that their overseas business was down for the year to date. Page 6
Overseas Market Performance The peak season has failed to bring about a change in fortune for hoteliers, as with the June instalment of the Tourism Barometer they once again reported a generally poor performance in respect of their main overseas markets. Doubtlessly linked to the ongoing global economic slowdown, more than two thirds of all hotel managers reported a drop in demand across all markets. The downturn in overseas bednights by market is consistent across hotels, guesthouses and B&Bs with Great Britain and the United States showing the biggest drops in demand, and twothirds reporting declines from Mainland Europe. (Charts 11a, 11b & 11c) Page 7
Prospects Tourism proprietors have grave concerns about their prospects for the remainder of the year. Against the backdrop of the most difficult economic circumstances for many decades, all industry sectors are pessimistic regarding the prospects for the remainder of 2009. Consistent with the findings in June the majority of all accommodation owners other than caravan and camping operators expect their overall volume of bednights to decline. Relatively speaking the caravan and camping sector is the least pessimistic, with more than half expecting demand for the remainder of the season to be at a similar or improved level to last year. (See Chart 12a) Overall, accommodation providers are generally less pessimistic about prospects for the domestic market; however they are still expecting it to be down on balance. The pessimistic outlook for the remainder of the year is shared by activity product providers. More than seven in ten golf clubs, angling establishments, cruising and equestrian companies anticipate a decline in demand. Angling establishments are the most pessimistic, with almost nine in ten anticipating a softening in tourism demand for the remaining season. (See Chart 12b) Negative sentiment is particularly evident in respect of the restaurants and transport providers with a significant majority of proprietors in each case anticipating a decline in demand. This pessimistic outlook is less predominant but nonetheless shared by retail and EFL managers. The attraction managers are the most optimistic. More than a four in ten forecast that business would either be up or at least on a par with last year. (See Chart 12c) Page 8
Factors Impacting on Performance The economic climate has improved little, if at all, since the last instalment of the Tourism Barometer and with Ireland still firmly in the grip of the worst recession in decades it is not surprising that more than than half of all respondents failed to identify any positive factors affecting their business prospects. In this regard, the increase in local trade, lower price offers and the business generated from local events were mentioned as positives, albeit by a minority. (See Chart 1a) Looking at the positive factors by sector, it is evident that Irish people staying at home has been good for the retail and caravan and camping sectors, while the lower price offerings is of most importance to restaurants, retailers and the golf industry. Local festivals and events however are particularly beneficial for hoteliers. Not surprisingly the recession and economy is the most frequently cited negative factor by tourism businesses as having impacted on performance. Almost one third of all tourism operators mentioned this on a spontaneous basis. Operators also referred to the weather, the drop in hotel room rates and the unfavourable exchange rates as negative factors which have impacted their business. (See Chart 1b) Looking at the negative factors on a sector by sector basis it is clear that the recession and the weather have been particularly bad for golf tourism, hostels and caravan and camping. Consistent with the findings presented in the June instalment of the Tourism Barometer the B&Bs are still finding it hard to compete with the low rates being offered by hotels. Exchange rates appear to be badly affecting the caravan and camping, angling (there is a strong dependence on the British market), car hire and retail sectors. Page 9
Operational Issues As expected and consistent with the findings of the last few instalments of the Tourism Barometer, the global and domestic economic downturns are the most frequently highlighted specific issues causing tourism businesses concern. Energy costs were again cited as a pressing issue for just over two thirds of all tourism operators. (See Chart 14a) Tourism operators were also asked to identify the issue of greatest concern. Almost three in ten of all proprietors across all tourism businesses highlighted the global economic downturn as the predominant concern. (See Chart 14b) Looking at the issues causing most concern by sector, the downturn in the domestic economy is particularly bad for selfcatering operators and also cruising and restaurants. Labour costs are a major issue for hotels, restaurants and the retail sector, while local authority service charges are a significant issue for guesthouses, caravan and camping operators and restaurants. Increased competition through surplus capacity is a particular concern for hotels and guesthouses, while cruising, car hire and coach operators are also concerned about the level of local competition. The retail sector is adversely affected by unfavourable exchange rates. Employment With the recession biting and the reported fall in demand for bednights, it will come as no surprise that the majority of accommodation proprietors have reduced staffing levels from the same period last year. This reduction is most evident in respect of the hotel sector where more than three quarters of all hoteliers cited employment across all categories of staff to be down on the same period last year. (See Chart 15a) On balance, guesthouse owners have also reduced their overall staff complement, particularly parttime and seasonal staff. (See Chart 15b) With less scope for reducing staff levels, B&B owners on balance, also report employing less parttime and seasonal staff than during the same period last year. (See Chart 15c) Page 10
Index to Charts and Appendices Chart No: Page No: 1 Overall Bednights Accommodation 12 2a Overall Bednights Hotels 1 2b Average Room Yield Hotels 14 Overall Bednights Guesthouses 15 4 Overall Bednights B&Bs 16 5 Overall Bednights Self Catering 17 6 Overall Bednights Caravan & Camping 18 7 Overall Bednights Hostels 19 8 Ireland Market Bednights Hotels 20 9 Overall Business Activities 21 10 Overall Business Segments 22 11a Overseas Market Performance Hotels 2 11b Overseas Market Performance Guesthouses 24 11c Overseas Market Performance B&Bs 25 12a Overseas Business Forecast Accommodation 26 12b Overseas Business Forecast Activities 27 12c Overseas Business Forecast Segments 28 1a Positive Factors affecting overall performance 29 1b Negative Factors affecting overall performance 0 14a Operational Issues that cause concern 1 14b Operational Issues that cause most concern 2 15a Employment Hotels 15b Employment Guesthouses 4 15c Employment B&Bs 5 Appendix 1 Analysis of Sample 6 Page 11
Overall Bednights Accommodation January to endaugust 2009 vs 2008 Chart 1 Hotels 75 9 16 No Reply Guesthouses 84 11 4 1 B&Bs 89 6 1 Self Catering 62 21 14 2 Caravan & Camping 55 10 5 Hostels 8 7 10 Base: All accommodation Page 12
Overall Bednights Hotels January to endaugust 2009 vs 2008 Chart 2a No Reply Overall 75 9 16 Overseas 81 14 5 Republic of Ireland 50 12 7 Northern Ireland 65 25 8 Base: All hotels Page 1
Average Room Yield Hotels January to endaugust 2009 vs 2008 Chart 2b No Reply Average Room Yield 94 Base: All hotels Page 14
Overall Bednights Guesthouses January to endaugust 2009 vs 2008 Chart No Reply Overall 84 11 4 1 Overseas 86 9 4 1 Republic of Ireland 65 20 14 1 Northern Ireland 75 16 6 Base: All guesthouses Page 15
Overall Bednights B&Bs January to endaugust 2009 vs 2008 Chart 4 No Reply Overall 89 6 1 Overseas 86 7 5 2 Republic of Ireland 75 17 6 2 Northern Ireland 74 15 9 Base: All B&Bs Page 16
Overall Bednights Self Catering January to endaugust 2009 vs 2008 Chart 5 No Reply Overall 62 21 14 2 Overseas 65 16 16 Republic of Ireland 51 22 25 2 Northern Ireland 47 10 9 Base: All selfcatering Page 17
Overall Bednights Caravan & Camping January to endaugust 2009 vs 2008 Chart 6 No Reply Overall 55 10 5 Overseas 70 15 15 Republic of Ireland 0 15 45 10 Northern Ireland 60 25 5 10 Base: All caravan & camping Page 18
Overall Bednights Hostels January to endaugust 2009 vs 2008 Chart 7 No Reply Overall 8 7 10 Overseas 81 5 12 2 Republic of Ireland 62 24 10 5 Northern Ireland 69 26 5 Base: All hostels Page 19
Ireland Market Bednights Hotels January to endaugust 2009 vs 2008 Chart 8 Down significantly Down slightly Up significantly Up slightly Same Weekend Breaks 20 Midweek Breaks General Leisure Business / Corporate Special Events 21 17 6 1 10 20 14 14 20 17 29 2 0 28 2 0 4 41 No Reply 2 1 Base: All hotels Page 20
Overall Business Activities January to endaugust 2009 vs 2008 Chart 9 No Reply Angling 78 11 11 Golf 85 12 Equestrain 54 15 1 Cruising 71 14 14 Base: All activities Page 21
Overall Business Segments January to endaugust 2009 vs 2008 Chart 10 Car Hire 8 17 No Reply Attractions 49 18 1 2 Coach Operators 75 10 15 Retail 8 17 EFL 64 21 14 Restaurants 94 6 Base: All attractions & transport Page 22
Overseas Market Performance Hotels January to endaugust 2009 vs 2008 Chart 11a No Reply Great Britain 72 17 8 USA 74 16 6 Europe 67 22 8 France 66 2 8 2 Germany 70 19 8 Base: All hotels Page 2
Overseas Market Performance Guesthouses January to endaugust 2009 vs 2008 Chart 11b No Reply Great Britain 81 15 1 USA 81 8 10 1 Europe 65 14 16 5 France 6 15 11 10 Germany 57 19 15 9 Base: All guesthouses Page 24
Overseas Market Performance B&Bs January to endaugust 2009 vs 2008 Chart 11c No Reply Great Britain 81 11 4 5 USA 80 10 6 4 Europe 68 20 6 6 France 6 19 14 5 Germany 65 19 11 6 Base: All B&Bs Page 25
Overall Business Forecast Accommodation Prospects for the Season 2009 vs 2008 Chart 12a Hotels 79 12 8 No Reply Guesthouses 86 9 B&Bs 87 8 2 Self Catering 68 20 8 4 Caravan & Camping 45 40 15 Hostels 8 12 5 Base: All accommodation Page 26
Overall Business Forecast Activities Prospects for the Season 2009 vs 2008 Chart 12b No No Reply Reply Angling 89 11 Golf 76 15 9 Equestrain 77 8 15 Cruising 71 29 Base: All activities Page 27
Overall Business Forecast Segments Prospects for the Season 2009 vs 2008 Chart 12c Car Hire 8 17 No Reply Attractions 55 1 1 2 Coach Operators 70 20 10 Retail 67 17 17 EFL 68 14 18 Restaurants 88 6 6 Base: All attractions & transport Page 28
Positive Factors affecting overall performance Chart 1a More Irish staying at home Lowered prices Lots of locally based functions (conferences, parties, weddings) Many hotels giving special rates Weather Increase in tourists Customers coming back / Repaet business More advertising & marketing Decrease in costs New / improved website 5 4 4 2 2 2 2 2 Others No Positives 54 Base: All tourism businesses Page 29
Negative Factors affecting overall performance Chart 1b The recession / Economy Weather Drop in hotel room rates Exchange rate General operating costs too high Cost of living in Ireland / Ireland too expensive Lack of tourists Lack of disposable income Local Authority rates need to be reduced Pressure from competitors Lack of demand for product Lack of help from Tourist Board Cost of eating out is too expensive All customers looking for the best value for money Less / No clientelle Less disposable income Others No Response 8 7 7 6 5 5 4 1 1 11 14 29 1 47 Base: All tourism businesses Page 0
Operational Issues that cause concern Chart 14a Downturn in global economy / overseas tourism markets Downturn in domestic economy / domestic tourism markets Energy costs (electricity, gas, heating oil, diesel, petrol) Local Authority / service charges (rates / water / waste) Rising prices for good & services purchased by tourists Insurance costs Unfavourable exchange rates Promotion of business / local destination by Tourist Board needs Promotion of Ireland by Tourist Board needs improvement Other cost (marketing, administration, interest etc) Local competition / surplus capacity Competition from other destinations Labour costs Other support by Tourist Board needs improvement Local transport / communications infrastructure Own initiatives to market your business need improvement Labour availability / training / retention Others No Response 1 5 1 20 18 28 9 9 8 6 5 47 5 5 68 61 85 78 Base: All tourism businesses Page 1
Operational Issues that cause most concern Chart 14b Downturn in global economy / overseas tourism markets 28 Downturn in domestic economy / domestic tourism markets 14 Local Authority / service charges (rates / water / waste) 10 Energy costs (electricity, gas, heating oil, diesel, petrol) 9 Local competition / surplus capacity 7 Rising prices for good & services purchased by tourists 6 Labour costs 4 Unfavourable exchange rates Promotion of business / local destination by Tourist Promotion of Ireland by Tourist Board needs improvement 2 Competition from other destinations 2 Insurance costs 2 Other cost (marketing, administration, interest etc) 1 Local transport / communications infrastructure 1 Own initiatives to market your business need improvement 1 Other support by Tourist Board needs improvement 1 Others 2 None of these 1 No Response Base: All tourism businesses Page 2
Employment Hotels Chart 15a No No Reply Reply Fulltime 79 19 2 Parttime 78 16 6 Seasonal 81 1 Base: All hotels Page
Employment Guesthouses Chart 15b No No Reply Reply Fulltime 51 16 Parttime 62 24 1 1 Seasonal 6 27 10 Base: All guesthouses Page 4
Employment B&Bs Chart 15c No No Reply Reply Fulltime 14 29 57 Parttime 21 26 1 52 Seasonal 29 0 41 Base: All B&Bs Page 5
Appendix No 1 Analysis of Sample Accommodation Paid Services Hotels 145 Guest Houses 79 B&Bs 554 Sub Total 778 Other Accommodation Self Catering 249 Caravan & Camping 20 Hostels 42 Sub Total 11 Total Accommodation 1089 Activities Segments Angling 9 Golf 4 Equestrian 1 Cruising 7 Sub Total 6 Car Hire 6 Attractions 55 Coach Operators 20 Retail 6 EFL 28 Restaurants 17 Sub Total 12 Total Activities, Attractions & Transport 195 Total Number of Responses 1284 Page 6