The current economic crisis pertinently emphasizes the fact that we cannot rely on our industrial output to create the necessary GDP to keep Ireland afloat in what is the worst world depression in history. We are simply not competitive enough, through having too high of a cost base, to be attractive to multi-national companies. That cost base is not going to reduce quickly enough for us to participate fully in the world economy upswing when it comes about. We offer attractive low tax rates for foreign direct investment but this advantage may be eroded by the US applying a repatriation tax on overseas earnings by US companies operating in low-tax regimes like Ireland.
I welcome, therefore, the Tourism Ireland initiative recently launched for a determined 2010 marketing strategy promotion designed to restore overseas tourism to growth next year. Tourism Ireland plans to grow visitor numbers to the island of Ireland by +3% next year – attracting an additional 230,000 visitors – giving a 2010 target of 7.85 million. This outcome will mean that tourism to the island of Ireland will grow ahead of the competition.
Marketing investment will be refocused to generate immediate returns for the tourism industry. Investment will be concentrated in Britain and in Germany, based on research which identifies these markets as our best prospects. Tourism Ireland will also significantly increase its investment in promoting value offers.
I firmly believe that we do not promote Ireland enough given the unique demographics that as an island of less than 6 million people, we have a Diaspora of about 70 million people mostly concentrated in America. Tourism should be our mainstream industry and Ireland should start realizing that they need to offer value for money and when they do they will attract huge numbers to see the sights, trace their roots and spend money. It is the cheapest foreign direct investment you could possibly ask for.
At the launch, Martin Cullen TD, Minister for Arts, Sport and Tourism, said as much when he stated that the Government fully recognises the important role that tourism can play in contributing to the country’s economic recovery and is committed to continued investment in the sector as a priority in 2010. He identified it as a key component in realising the potential of the many millions of people who will take holidays and short breaks in 2010.
However, he needs to realize that Ireland must offer value and not give credence to the crazy notion that tourists are justifiable targets for fleecing. You will do that once only and you will never see repeat business along with suffering from word of mouth that Ireland is a rip off place to holiday We can do all the highlighting of the uniqueness of a holiday on the island of Ireland – the diversity of our culture and heritage and the friendliness of our people and differentiate ourselves in a very crowded marketplace – but we still must offer value in a new world economic order. It is the primary criteria in any holiday destination decision.
2009 has proved to be one of the toughest years for tourism to the island of Ireland and for tourism worldwide. One of the key factors affecting Ireland’s performance is its traditional reliance on Britain and North America, two markets which have suffered disproportionately from the economic downturn and weak currencies. In addition, air access worldwide declined significantly during 2009. Despite this, by year end Tourism Ireland anticipates that 7.6 million will have visited the island of Ireland from overseas, generating approximately EUR3.7 billion in revenue; and there is some evidence that consumer confidence is beginning to improve, albeit slowly, providing a positive signal for 2010.
However, I feel they are setting the bar too low and that Tourism Ireland should be initiating a 10-year plan to bring tourist revenue to EUR20 billion per annum. As tough a target as that may seem it is not outlandish given the numbers that claim Irish descent worldwide. As industrial growth diminishes, combined with our lack of natural resources, we have the opportunity to make tourism the centrepiece of our economic model. Go do it!