Contents Page No: Introduction 3 Accommodation 4 Ireland Market 5 Activity Providers, Attractions, Retail 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 coming season (Mid June to end of September). Results are based on feedback provided during the fieldwork period from the 9 th to the 24 th of June 2009. In total 1081 interviews were conducted, details of which are outlined in the analysis of sample (Appendix 1). Page 3
Accommodation Overall Bednights Given the extremely challenging economic conditions and the most severe recession for many decades, 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 significant fall in overall demand compared to last year. Although almost half of all caravan and camping establishments reported a fall in demand, it is the sector least effected. Nearly a third reported overall demand for bednights to be up, and almost a quarter stated that demand was similar to last year. (See Chart 1) Hotels The downturn in bednight volumes in the hotel sector over the first six months of the season can largely be attributed to falling demand in the overseas markets. The strength of the Euro against Sterling has contributed to a declining Northern Ireland performance with almost three quarters of hoteliers citing a fall in demand from this source compared to last year. The volume of domestic bednights is also perceived to be down on last year by seven in ten hoteliers. (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 Where guesthouses are concerned, the weak performance of both the domestic and overseas markets has resulted in a poor start to the year with eight in ten proprietors citing a decrease in bookings. The majority of guesthouses also report Northern Ireland to be down on the corresponding period in 2008. (See Chart 3) The B&B sector experienced a softening in demand across all markets, 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 more than eight 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. Where the Northern Ireland market is concerned, although a majority of proprietors report bednight volumes to be down on business generated from this source, almost half of all selfcatering establishments stated that bednight volumes were either up or on a par with 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 more than 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, about a quarter of all hostel owners stated that demand from Northern Ireland and the local market was on a par to last year, and a small minority of establishments reported increased demand. (See Chart 7) Ireland Market Hoteliers have experienced falling domestic demand compared to 2008 and the evidence suggest that the downturn can be attributed to a reduction in business across each of the main domestic market segments. Three in four hoteliers stated that weekend breaks, midweek breaks, general leisure breaks, and business / corporate were down slightly or down significantly on last year, and three in five reported their special event business down. (See Chart 8) Page 5
Activity Providers, Attractions, Retail and Transport Activities The vast majority of activity providers have experienced a decline in overall business compared to the same period last year. Consistent with the findings presented in earlier instalments of the Tourism Barometer, equestrian establishments have performed better (relatively speaking) than other activity providers. However, in each case more than seven in ten angling establishments, golf courses, equestrian establishments and cruising companies report tourism business to be down on last year. (See Chart 9) Visitor Attractions, Retail Establishments and Language Schools (EFL) Retailers, language schools and visitor attractions have each experienced a softening in tourism demand. In all cases, a majority of managers report business to be down this year compared to the same period last year. Retailers are particularly affected by the downturn in overseas business. Relatively the attractions have performed better, more than a quarter of all attraction managers cited growth regarding the performance of tourism business compared to the same period last year, due primarily to almost a third reporting increases in domestic visits. (See Chart 10) Car Hire and Coach Operators A challenging trading environment is also is evident in respect of coach operators and, in particular, car hire companies with both sectors reporting reduced levels of tourism demand. (See Chart 10) Eight in ten coach operators state that their overseas business is down for the year to date. Page 6
Overseas Market Performance Hoteliers reported a generally poor performance in respect of their main markets. No doubt linked to the ongoing global economic slowdown, more than half of all hotel managers reported a drop in demand. The downturn in bookings in the hotel sector is particularly evident in respect of the United States and Great Britain markets with more than seven in ten managers citing reduced levels of demand compared to the same period last year. (See Chart 11a) Guesthouse owners reported declining demand in respect of all their main overseas markets. Compared to the same period last year more than six in ten guesthouses reported a drop in demand across all their main markets. The British market performed worst with more than three quarters of guesthouse owners reporting bednight volumes to be down. (See Charts 11b) Where B&Bs are concerned, the evidence also suggests that there has been a reduction in demand across all of the overseas markets. Similar to the hotel sector, the United States and Great Britain markets reported the biggest drops in demand with more than three quarters of all B&B owners citing reduced levels of demand compared to the same period last year. (See Charts 11c) Overall, while all markets are down Great Britain is perceived to be the weakest overseas market. Page 7
Prospects The current economic crisis has not only impacted on the performance of tourism establishments in the first half of 2009 but has clearly had a major bearing on expectations. Against the backdrop of the most difficult economic circumstances for many decades, all industry sectors are pessimistic regarding the prospects in the coming months. 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 just under a quarter actually expecting an increase in demand in the coming season. (See Chart 12a) Overall, accommodation providers are somewhat less pessimistic about prospects for the domestic market while still expecting it to be down on balance. Activity product providers are also pessimistic regarding their business prospects for the coming season although the extent of this pessimism varies. Negative sentiment is particularly evident in respect of golf clubs, angling establishments and cruising companies with a significant majority of proprietors in each case anticipating a decline in demand. Equestrian owners are the least pessimistic, but overall they also anticipate a softening in tourism demand for the coming season. (See Chart 12b) In both cases, car hire companies and coach operators expect volumes of tourism business to be down compared to the same period last year. This pessimistic outlook is shared by managers of visitor attractions, retail outlets, and language schools. (See Chart 12c) Page 8
Factors Impacting on Performance Taking into account the current recession, it is not surprising that significantly less than half of all respondents identified any positive factors affecting their business prospects. In this regard, the increase in local trade and the good weather were mentioned as positives, albeit by a minority. (See Chart 13a) Looking at the positive factors by sector, it is evident that the good weather is more important to caravan and camping and activity providers, while Irish people staying at home is good for attractions and informal accommodation such as caravan and camping and hostels. Local festivals are good for hotels and attractions, while word of mouth recommendations were particularly beneficial for selfcatering establishments. The recession was the most frequently cited negative factor cited by tourism businesses as having impacted on performance. One third of all tourism operators mentioned this on a spontaneous basis. Operators also refer to unfavourable exchange rates, lack of bookings, and rising energy costs as negative factors impacting on future prospects. (See Chart 13b) Looking at the negative factors by sector it is clear that the global recession is particularly bad for angling and golf tourism. Exchange rates are badly affecting the equestrian, angling (there is a strong dependence on the British market), cruising and EFL sectors. B&Bs are finding it hard to compete with the low rates being offered by hotels. The global economic downturn is having knockon negative effects on retailers, who are citing less consumer spending and being impacted from the fact that Ireland is expensive, and this is also affecting overall hostel performance. Page 9
Operational Issues Unsurprisingly, and consistent with the findings of the last few instalments of the Tourism Barometer, the global and domestic economic downturns were highlighted as the specific issues that are causing all tourism businesses concern. Energy costs were also cited as a pressing issue. (See Chart 14a) When asked to identify the issue of greatest concern, almost one third of all proprietors across all tourism businesses highlighted the global economic downturn as the predominant consideration at this time. (See Chart 14b) Looking at these concerns by sector the downturn in the global economy is particularly bad for B&Bs, car hire and EFL, while the state of the domestic economy is a big issue for golf, selfcatering and equestrian operators. Labour costs were the single biggest concern for hoteliers, while after the downturn in the global economy caravan and camping managers and hostel proprietors cite local authority charges as their next biggest concern. Employment With the overall volume of bednights reported to be down from the same period last year, not surprisingly, proprietors have reduced staffing levels. 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 13 2b Average Room Yield Hotels 14 3 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 23 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 13a Positive Factors affecting overall performance 29 13b Negative Factors affecting overall performance 30 14a Operational Issues that cause concern 31 14b Operational Issues that cause most concern 32 15a Employment Hotels 33 15b Employment Guesthouses 34 15c Employment B&Bs 35 Appendix 1 Analysis of Sample 36 Page 11
Overall Bednights Accommodation January to midjune 2009 vs 2008 Chart 1 Hotels 85 8 7 Guesthouses 91 5 4 B&Bs 87 5 6 2 Self Catering 67 20 10 3 Caravan & Camping 48 24 29 Hostels 92 6 3 Base: All accommodation Page 12
Overall Bednights Hotels January to midjune 2009 vs 2008 Chart 2a Overall 85 8 7 Overseas 85 9 6 Republic of Ireland 70 15 15 1 Northern Ireland 72 23 5 1 Base: All hotels Page 13
Average Room Yield Hotels January to midjune 2009 vs 2008 Chart 2b Average Room Yield 93 5 2 Base: All hotels Page 14
Overall Bednights Guesthouses January to midjune 2009 vs 2008 Chart 3 Overall 91 5 4 Overseas 78 11 7 4 Republic of Ireland 81 15 3 1 Northern Ireland 68 27 5 Base: All guesthouses Page 15
Overall Bednights B&Bs January to midjune 2009 vs 2008 Chart 4 Overall 87 5 6 2 Overseas 84 6 6 3 Republic of Ireland 70 19 7 4 Northern Ireland 63 24 2 11 Base: All B&Bs Page 16
Overall Bednights Self Catering January to midjune 2009 vs 2008 Chart 5 Overall 67 20 10 3 Overseas 66 23 10 1 Republic of Ireland 56 24 17 2 Northern Ireland 45 35 7 13 Base: All selfcatering Page 17
Overall Bednights Caravan & Camping January to midjune 2009 vs 2008 Chart 6 Overall 48 24 29 Overseas 67 24 10 Republic of Ireland 33 14 52 Northern Ireland 81 14 5 Base: All caravan & camping Page 18
Overall Bednights Hostels January to midjune 2009 vs 2008 Chart 7 Overall 92 6 3 Overseas 83 14 3 Republic of Ireland 64 28 8 Northern Ireland 67 25 3 6 Base: All hostels Page 19
Ireland Market Bednights Hotels January to midjune 2009 vs 2008 Chart 8 Same Up slightly Up significantly Down slightly Down significantly Weekend Breaks Midweek Breaks General Leisure Business / Corporate Special Events 1 13 1 1 7 15 7 14 11 15 16 3 7 26 38 30 36 34 49 38 23 22 50 38 No Reply 2 2 5 4 Base: All hotels Page 20
Overall Business Activities January to midjune 2009 vs 2008 Chart 9 Angling 90 10 Golf 80 10 10 Equestrain 71 18 12 Cruising 89 11 Base: All activities Page 21
Overall Business Segments January to midjune 2009 vs 2008 Chart 10 Car Hire 71 14 14 Attractions 58 14 27 2 Coach Operators 62 19 14 5 Retail 67 17 17 EFL 88 13 Base: All attractions & transport Page 22
Overseas Market Performance Hotels January to midjune 2009 vs 2008 Chart 11a Great Britain 71 23 7 USA 73 15 9 3 Europe 66 21 9 4 France 63 27 7 3 Germany 61 26 9 4 Base: All hotels Page 23
Overseas Market Performance Guesthouses January to midjune 2009 vs 2008 Chart 11b Great Britain 77 18 4 1 USA 70 22 7 1 Europe 68 23 8 1 France 61 19 16 4 Germany 69 22 5 4 Base: All guesthouses Page 24
Overseas Market Performance B&Bs January to midjune 2009 vs 2008 Chart 11c Great Britain 76 14 5 4 USA 76 12 8 4 Europe 71 14 6 8 France 67 16 9 7 Germany 69 16 7 7 Base: All B&Bs Page 25
Overall Business Forecast Accommodation Prospects for the Season 2009 vs 2008 Chart 12a Hotels 82 13 4 1 Guesthouses 85 8 3 4 B&Bs 87 5 6 2 Self Catering 73 15 10 2 Caravan & Camping 48 29 24 Hostels 83 11 6 Base: All accommodation Page 26
Overall Business Forecast Activities Prospects for the Season 2009 vs 2008 Chart 12b Angling 75 20 5 Golf 73 20 7 Equestrain 47 35 12 6 Cruising 89 11 Base: All activities Page 27
Overall Business Forecast Segments Prospects for the Season 2009 vs 2008 Chart 12c Car Hire 57 14 29 Attractions 58 24 19 Coach Operators 71 19 10 Retail 83 17 EFL 88 13 Base: All attractions & transport Page 28
Positive Factors affecting overall performance Chart 13a People are not travelling far / more local trade Good weather Local events / festivals / work in the area generating business Returning customers / good reputation Increased publicity / exposure / marketing Reduced costs Internet email / website bookings Oversea business encouraged by lower prices Investments / expansions / improvements to the business Special offers / low rates have helped stimulate business More general business / bookings Recession has caused us to be more cost concious / efficient Improved labour market Exchange rate is improving Good work / publicity by Failte Others No Response 2 2 1 1 1 1 2 2 1 3 2 5 4 4 8 9 62 Base: All tourism businesses Page 29
Negative Factors affecting overall performance Chart 13b The recession / credit crunch / downturn in the economy Unfavourable exchange rates Lack of tourism business / bookings High costs (e.g fuel,electricity, waste, water, labour etc) Not able to compete with low rates of hotels Ireland as a country is far too expensive Less consumer spending Hotels comprimising quality to offer cheaper rates Increased competition People have high expectancy for bargins The price of food and drink VAT / Taxes too high The weather Less overseas business Less corporate business Lack of credit available from the banking sector Unlicensed operators Others No Response 2 2 1 1 3 2 2 1 3 6 5 5 5 10 9 9 14 27 33 Base: All tourism businesses Page 30
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) Unfavourable exchange rates Local Authority / service charges (rates / water / waste) Rising prices for good & services purchased by tourists Insurance costs Competition from other destinations Promotion of business / local destination by Tourist Board needs improvement Local competition / surplus capacity Promotion of Ireland by Tourist Board needs improvement Other cost (marketing, administration, interest etc) Labour costs Other support by Tourist Board needs improvement Own initiatives to market your business need improvement Local transport / communications infrastructure Labour availability / training / retention Others None of these No Response 1 1 7 13 37 35 34 29 22 22 39 38 37 57 54 54 51 68 80 88 Base: All tourism businesses Page 31
Operational Issues that cause most concern Chart 14b Downturn in global economy / overseas tourism markets Downturn in domestic economy / domestic tourism markets Energy costs (electricity, gas, heating oil, diesel, petrol) Labour costs Local Authority / service charges (rates / water / waste) Rising prices for good & services purchased by tourists Local competition / surplus capacity Unfavourable exchange rates Promotion of business / local destination by Tourist Board needs improvement Competition from other destinations Insurance costs Other cost (marketing, administration, interest etc) Local transport / communications infrastructure Own initiatives to market your business need improvement Other support by Tourist Board needs improvement Others None of these No Response 2 2 1 1 1 3 2 2 1 2 5 5 4 7 6 9 14 32 Base: All tourism businesses Page 32
Employment Hotels Chart 15a Fulltime 77 21 1 1 Parttime 79 17 5 Seasonal 82 15 2 1 Base: All hotels Page 33
Employment Guesthouses Chart 15b Fulltime 46 36 18 Parttime 65 23 1 11 Seasonal 74 16 1 8 Base: All guesthouses Page 34
Employment B&Bs Chart 15c Fulltime 14 30 56 Parttime 22 30 48 Seasonal 30 31 38 Base: All B&Bs Page 35
Appendix No 1 Analysis of Sample Accommodation Paid Services Hotels 151 Guest Houses 74 B&Bs 425 Sub Total 650 Other Accommodation Self Catering 181 Caravan & Camping 21 Hostels 36 Sub Total 238 Total Accommodation 888 Activities Segments Angling 20 Golf 30 Equestrian 17 Cruising 9 Sub Total 76 Car Hire 7 Attractions 59 Coach Operators 21 Retail 6 EFL 24 Sub Total 117 Total Activities, Attractions & Transport 193 Total Number of Responses 1081 Page 36