Tourism is a key pillar of the Irish economy and is enjoying a strong recovery since the global financial crisis, writes Joe Gill
However, if it is to be shaped as a driver of employment and economic activity, particularly in areas outside the capital, it needs careful management to avoid the risks of overpricing and overcrowding.
The tourism industry contributes about 4% to Ireland’s GDP and generates revenue of more than €5 billion while employing in excess of 200,000 people.
In 2016, 8.7 million people visited Ireland, almost twice the size of the entire population.
A sequence of international awards for hospitality and family holiday friendliness has helped drive that momentum.
Being an island comprised of white and primarily Christian inhabitants has also made the country, for good or bad, an attractive option in an era when geopolitical tensions and terrorism has created a premium for holiday destinations considered safe and secure.
That may explain some of the increased traffic between the US and Ireland in recent years.
The figures show, however, that the UK is the largest source of overseas visitors with 3.5 million arriving in 2016, compared with the 1.5 million from the US and 600,000 visitors from Germany.
Amid the Brexit mania, we should always remember that British tourism customers have and continue to play a key part in the tourism industry.
A weakening UK economy or currency is a clear and present danger in that context.
The figure that sticks out for me is the number of tourists from the “rest of the world”, which amounted to only 331,000 in 2016.
That is just 3.8% of the total market and it includes visitors from China and India.
Those two countries account for 35% of the world’s population and their middle classes are growing faster than anywhere else on the planet.
Yet, we struggle to carve out a product or service in tourism that makes it compelling for tourists from these countries to travel here.
The latest survey by Oliver Wyman of Chinese tourism throws up key facts.
The first is that Chinese tourists attach less importance to shopping when on holiday than was the case a number of years ago.
The other finding is that food and experiences have risen from around a third of an average Chinese tourist spending, to 44%.
Moreover, long-haul trips to Europe and the US have increased by 25% and 12% respectively in the last year.
Map those findings on to the Irish tourism sector and what can you conclude?
Firstly, Ireland is full of so-called “experience” tourism.
The Trinity Library, Cliffs of Moher, all of west Cork, the Aran Islands, and Connemara are examples of experiences that are new and different.
Secondly, the food and beverage products and restaurants in Ireland are world class, when presented professionally and efficiently.
The other insight from Oliver Wyman is that Chinese tour groups, while still important, are being eclipsed by individual travellers.
This plays well for Ireland’s wheelhouse as the country caters strongly for people who want to venture out safely on their own.
English speaking is also a big part of the Chinese education system, as it always was in India.
Ireland can leverage that simple advantage too.
The tourism industry in Ireland has enormous potential to grow despite its recent expansion.
Delivering that promise needs a consistent focus on price competitiveness, increased sea and direct air access, as well as a strong and sustained marketing campaign that appeals to the traditional markets and a renewed push into new geographies.
Moving the dial on the “rest of the world” tourism from 3.7% to 10%, would add 500,000 extra visitors and boost overall numbers by 6%, while still being below the US and UK volumes.
That feels like a prize worth chasing.
Joe Gill is director of corporate broking with Goodbody Stockbrokers. His views are his own.
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