Brexit has already had an impact on the tourism sector and additional funding of €7.7m has been allocated to the tourism agencies to ensure that the sector is Brexit ready. In this context, Fáilte Ireland will implement a programme which places a focus on retaining business from Northern Ireland and Britain whilst also offering supports to enterprises to equip them for the post-Brexit marketplace.
Tourism Ireland will implement therecommendations of a recent review of its operations in the British market and also extend the Regional Co-Operative Market Access Scheme.
Government is focussed on supporting the tourism sector in preparing for the negative impacts of Brexit. Tourists from the United Kingdom are a substantial proportion of the total number of international visitors to Ireland.
The maintenance of the Common Travel Area and the EU Commission’s intention to ensure the continuation of direct air services in a no deal scenario will mitigate some of the immediate risks facing the Irish Tourism Sector. However, the economic impact on Britain and potential devaluation of Sterling are likely to negatively impact on UK tourism numbers to Ireland.
A devalued Sterling will mean that Irish tourism operators may face increased competitiveness challenges from the UK Tourism Sector. It is important the industry assess the risks to their business, respond to the changes they are currently experiencing and plan for future eventualities.
Fáilte Ireland has developed a customised suite of supports to assist businesses through these uncertain times. These include training and supports, market diversification, and competitiveness. In addition, tourism operators can avail of the extensive business supports that government has made available.
A key focus of Tourism Ireland’s work is market diversification, supported by global marketing campaigns. This includes the implementation of a Great Britain Market Strategy Review, and targeting cohorts of UK visitors who are less likely to be impacted by currency fluctuations.
Budget 2019 provided for the largest increase in the tourism budget in 15 years and included €7m for current tourism funding to offset Brexit. This will accelerate the market diversification of our tourism agencies and support tourism enterprise.
Brexit has already impacted the tourism sector. In the short term, the drop in the value of sterling has meant that Ireland has become a more expensive destination for UK visitors. It also makes Britain a relatively less expensive alternative destination. The initial impact of the Brexit referendum for tourism saw a reduction of 5% in the number of British visitors in 2017 on foot of the depreciation in Sterling. The GB market was steady in 2018, with visitor numbers marginally up and revenue down 2%. CSO data for Q1 2019 indicated a 5% drop in revenue from visitors from Britain, despite visitor numbers being up slightly, indicating a weaker sterling having an impact on spending. There are also indications that the uncertainty attaching to Brexit is beginning to affect bookings for the 2019 season.
Investment in the Tourism Sector
In addition to being able to avail of many of the supports outlined in the Chapter on Enterprise Supports, the Government has allocated almost €8 million in additional funding to the tourism agencies this year specifically to respond to the impact of Brexit.
Fáilte Ireland is investing in implementing its ‘Get Brexit Ready’ programme, which places a focus on retaining business from Northern Ireland and Britain, whilst also offering supports to enterprises to equip them for the post-Brexit marketplace.
Image 10: Fáilte Ireland Brexit Response Programme
Tourism Ireland has put in place a programme of marketing activity, post-Brexit research, and stakeholder information to ensure that potential visitors in relevant markets fully appreciate that it is ‘business as usual’ for Ireland and the Irish tourism industry. They have also put in place a Tourism Taskforce on Brexit, which has met regularly, and are implementing a series of measures in the British market to address the decline in visitor numbers since the referendum, including a greater focus on consumer segments less impacted by currency fluctuations; and expanded partnership programmes with airlines, ferry operators and tour operators.
Additional investment under the Regional Access Initiative has enabled Tourism Ireland to further promote routes from Paris, Milan, Frankfurt and Berlin (as well as routes from GB including London, Glasgow, Bristol and East Midlands) to Knock, Shannon, Donegal, Kerry and Cork.
Marketing Strategies and Diversification
As part of its Brexit preparations, Tourism Ireland commissioned a wide-ranging review of the British market, independently chaired and led by a steering group of key representatives of the Irish and UK-based tourism industry, including Fáílte Ireland. The Great Britain Market Strategy was launched in early June and sets out actions to grow holidaymaker revenue from Britain to Ireland by over 25% by 2022, which will be of particular benefit to north-western and Border counties. A focus on marketing to ‘culturally curious’ visitors in Britain, who are less impacted by currency fluctuations, will continue, highlighting off-season breaks and value offers from the industry.
It is clear that the deferral of the UK exit from the European Union presents both a challenge and an opportunity. Tourism Ireland continues the roll out of its market diversification strategy, which focuses greater resources on attracting visitors from those markets who stay longer and spend more time on holiday. This has seen Mainland Europe become the largest contributor of overseas tourism revenue followed by North America.
Tourism Ireland is also implementing new strategies to deliver ambitious growth targets from Germany, the United States and emerging markets. This will help to build and sustain growth in these markets in line with the Government’s Global Ireland 2025 Strategy. The organisation is scoping the potential for expansion in the US (west coast) and possible market entry in Japan, and it is doubling its marketing investment in China this year to €1 million, and also doubling its marketing team to 12 with the aim of growing Chinese visitor numbers to 200,000 by 2025.
The agencies and the tourism divisions of DTTAS will remain in close contact to ensure that appropriate contingency plans are in place to meet the challenges presented by Brexit.
Tourism Ireland will continue its promotional programme in key markets overseas.
Fáilte Ireland will support businesses in the tourism and hospitality sectors to access relevant Brexit business supports through the relevant agencies in the enterprise sector.