Ireland’s holiday romance fades for visitors

Price concerns could be driving big-spending tourists away, writes DAVID CLERKIN.

IF Robert Louis Stevenson is right and it is, after all, better to travel hopefully than to arrive, then are visitors to Ireland the most optimistic bunch on the planet?

High prices, slipping service standards and poor transport links make the brochures more attractive than the real thing.

Twenty years ago the complaint was that Ireland had a wonderful tourism product that wasn’t being sold; now it may be more a case of too much selling and too little delivering.

And unlike the tourists, the chickens may be coming here to roost. Figures from the Central Statistics Office show the number of visitors to the country are up 5.4% on last year and in line with targets, but the industry fears the numbers mask a change in underlying trends and a fall-off in high-spending tourists.

Although the visitors keep coming, they stay for shorter periods, see less of the country and spend less.

Fáilte Ireland director of industry and development Malcolm Connolly says the trend of shorter breaks has been good for Dublin but bad for everywhere else.

“There’s no doubt the number of nights spent by British visitors outside Dublin is down on the late 1990s,” says Mr Connolly. Each year 58% of overseas visitors come from Britain.

Hotel operator Brian McEniff, whose group includes hotels in Dublin, Donegal, Sligo, Mayo and Waterford, describes recent trends as “quite horrific”.

While trade held up in the early part of 2004, he noticed a slippage from May onwards.

Room yields fell as hotel operators cut prices by up to 15%, while bar receipts also slumped by approximately 12% in line with a general slowdown. The EU presidency, however, provided a welcome one-off bounce to hotels in Dublin in May and June.

Demand from the continent is holding its own but is far from buoyant.

All European visitors share a dislike of high prices, the consequence of years of Irish inflation outpacing the EU average and the industry’s silent assassin that had its cover blown by the euro.

This has also had its effect on Irish people, who perceive better value elsewhere and snap up cheap airline seats to get more bang for their buck.

In the first half of the year, 2.5 million Irish people left the country; a number that is up 9% on last year and quickly gaining on the 2.9 million travelling in the opposite direction.

Fáilte Ireland has spent €3.6 million this year promoting domestic tourism, which is worth e1 billion of the €5 billion generated from tourism each year.

However, Mr McEniff disputes the perception of bad value. “I never saw better value than this year,” he says, referring to price cuts aimed at keeping room occupancy levels up.

Fáilte Ireland backs him up by saying one-third of visitors are dissatisfied with value for money here, but that most complaints centre on the costs of eating out and general living. Visitors are reasonably happy with air and ferry fares, car hire and accommodation, according to the body.

But figures from British consumer magazine Holiday Which? suggest that those with big appetites or small pockets would do well to avoid Ireland.

A group representing restaurant owners last week launched a new scheme of lower-priced menus in a bid to counter claims they were ripping off customers. But the best they can do is offer lunches starting at €15 and going up to €35.

The hospitality industry says comparisons with other countries are unfair and fail to take account of higher wage costs in Ireland and excise and VAT rates that are among the highest in the EU.

One view is that the Government’s policy of low income and corporation tax rates forces it to increase taxes on spending, a move that has a disproportionate effect on tourists who spend money here without earning their income in Ireland.

But perceptions of rip-offs remain and the availability of cheaper food, beer and accommodation elsewhere are widely held.

And the industry fears customers voting with their feet. Publicans claims sales are down by as much as 15% as the sobering news dawns that price hikes face resistance from drinkers.

Ireland’s tourism success in the late 1990s is evident from the number of available hotel beds shooting up from 27,000 per night seven years ago to 44,000 now.

But the extra capacity also means greater competition, putting pressure on revenues at the same time as costs rocketed.

The strain felt by hotels feeds through to other accommodation sectors. Fáilte Ireland’s latest survey found 35% of bed and breakfasts said business was down on last year, compared with 13% of hotels.

But falling visitor numbers or patterns of declining spending will be bad news for tourism - whether in Dublin or elsewhere.

If current trends continue and high spenders cannot be tempted back, Ireland’s tourist story will be less like Treasure Island and more a case of Jekyll and Hyde.