Sterling slump hits tourism in many counties

Tourism in the Republic has been hit by the Brexit slump in sterling which has reduced spending from the North and cut visitor numbers crossing the Irish Sea from Britain, an official survey suggests.

The survey by Fáilte Ireland shows that at least eight counties are not sharing in the general tourism boom which is being driven by large increases in North American visitors.

A separate report by researchers at think tank the Economic and Social Research Institute (ESRI) highlighted the significance of angling tourism and in particular the contribution of British coarse anglers participating in Irish contests, because these tourists tend to spend more when they visit here.

Sterling slumped against the euro as low as 91p late last year from 76p on the eve of the Brexit referendum last June. It has traded in recent weeks around 86.5p, still down by around 13% from last summer.

CSO figures show the number of visitors to the Republic between February through April was little changed at 2m from a year earlier, but the number travelling from Britain slid 10.7% to 855,800.

That has raised concerns that parts of the tourism industry which rely heavily on the spending of Northern Irish and British customers will be badly harmed. Exporters and small firms in the Republic, including food processing firms, which tend to employ relatively large numbers of staff, also depend on a strong level of sterling to help sell goods across the Irish Sea into Britain.

Fáilte Ireland’s latest ‘Tourism Barometer’ shows that firms across a long list of counties in the northern part of the Republic — Cavan, Donegal, Leitrim, Longford, Louth, Mayo, Monaghan, and Sligo — said their businesses were trailing other regions.

However, many tourism businesses in the rest of the Republic said they were upbeat about the prospects for the season.

A majority of tourism in those eight counties cited the effect of the weakness of sterling in curbing spending from the North.

But the barometer also found evidence that Dublin was also disproportionately affected by sterling’s woes.

“Clearly, despite some softening in the British market, tourism operators remain upbeat — thanks in large part to business from North American and other long-haul markets as well as the continued strong performance of the domestic market,” Fáilte Ireland chief executive officer Paul Kelly said.

“The crucial focus now for every business must be on getting their market mix right. An over-reliance on one market can leave any enterprise dangerously exposed to unexpected external events such as Brexit. Diversification is the key to minimising that risk.

“In the case of Dublin, the fall in British visitors may be linked to greater price sensitivity due to sterling’s weakness. This underscores the importance for businesses in the capital to maintain a rigorous focus on competitiveness despite the current high demand in the city.”

Meanwhile, a major report by the research company Capital Economics in London has forecast sterling will strengthen against the dollar but stay around current levels against the euro.

“There are reasons to think that sterling’s post-referendum depreciation may continue to be reversed,” said its chief economist, Jonathan Loynes.

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