Ireland's tourism chief talks U.S. visitor growth, VAT, Brexit

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Owenahincha Beach in Rosscarbery, County Cork, part of Ireland's Wild Atlantic Way.
Owenahincha Beach in Rosscarbery, County Cork, part of Ireland's Wild Atlantic Way.

Ireland saw a 6.9% increase in international visitors last year, constituting a record 10.6 million arrivals, according to Central Statistics Office data. Arrivals from the U.S. (Ireland's second-largest source market after the U.K.) and Canada combined were up 13.4%, to 2.4 million.

Capitalizing on that momentum, Tourism Ireland, the entity responsible for marketing Ireland and Northern Ireland, has launched a new campaign, "Fill Your Heart With Ireland," as part of its efforts to promote the island of Ireland as a year-round destination.

Brendan Griffin, Ireland's minister of state for tourism and sport, visited New York to discuss the campaign and the challenges and opportunities for Ireland tourism in the year ahead.

Q: What were some factors that contributed to North American visitor growth in 2018?

A: To put it into context, in 2013 we set a target of 1 million visitors for the island of Ireland from North America; to have broken the 2 million mark in 2018 was a great achievement. Very often with rapid growth like that, the fear is, is it sustainable? We feel it is, and we feel we have a very solid foundation.

Brendan Griffin
Brendan Griffin

[Access is] a critical component. I think back in 2011 we had seven gateways in North America; this year we'll have 24 between the U.S. and Canada. [Editor's note: In the U.S. there are 18 gateways, including two recent additions: American Airlines' service from Dallas and Aer Lingus' service from Minneapolis.] It makes it far easier for the visitor to get to Ireland. From the Northeast here to Ireland is the equivalent of maybe going from here to the West Coast, and with preclearance it makes it far more convenient, as well.

We've worked hard to develop our offering in terms of the products that we have, the experiences that we have -- for example, the Wild Atlantic Way, which is a 2,500-kilometer route along the entire western seaboard, which is an outstandingly beautiful scenic drive -- but along that way, you have all that culture, the heritage, the food, the people, the things that are on offer. And, of course, you have the Ireland's Ancient East experience, which is our castles, our Unesco World Heritage Sites. From a heritage and culture point of view, Dublin is another experience of its own.

So you intertwine that, then, with the effort that we've made in terms selling Ireland as an all-year-long destination: You can golf on our courses in January the same as you do in July, and we have a range of festivals throughout the year, as well. We've really worked hard at putting all our strong points together and selling them.

Q: Could you talk about the new Fill Your Heart With Ireland campaign?

A: It epitomizes what Ireland is about -- that sense of discovery, that sense of freedom, that sense of oneness with nature, that interaction you can have with the people, those genuine emotional connections that you can build. The Jump Into Ireland campaign obviously was really successful for us, but we felt it was time to refresh that and go with something new. So we're quite pleased with [the new campaign] so far; the response has been very positive. Ultimately, when you choose your holiday destination, you're looking for something that will excite you, something that will be better than the norm, something that will exceed your expectations. And we think this campaign effectively represents that. 

Q: Recently, the value-added tax [VAT] for hotels and restaurants increased. What effect might that have on tourism?

A: In the same mini-budget in 2011 when we scrapped the airport tax, we also reduced the rate of VAT from 13.5% to 9% as a temporary measure -- for two-and-a-half years. It was due to expire in December 2013, reverting back to 13.5%. As a result of strong lobbying by myself and others, it was extended for another year, and they extended it again, and again, and again. So instead of being a temporary measure, it ended up in place for seven-and-a-half years, and it was a massive help to tourism enterprises during those years.

But what has happened in the meantime was when you had effectively tumbleweeds in the streets in 2011 -- just over 6 million overseas visits, revenues were quite low, the domestic market was performing really, really poorly because of economic conditions -- by 2018 we'd seen those figures grow to [nearly] 11 million, and we'd seen the revenues growing similarly. Also, the domestic market had rebounded extremely strongly. So the decision was made in the most recent budget to revert to the previous rate of 13.5%, on the basis that the enterprises we were originally trying to assist were now robust enough and were now operating in a strong enough environment to withstand that change. It certainly will represent a challenge. Every enterprise wants to have as low a cost base as possible.

The other thing I would say is since the late 2000s -- because at the time demand having been so weak -- prices in Ireland have remained at an unusually low rate. And this increase is something that I think even if passed down to the consumer -- and some enterprises will be able to absorb [the increase] and some will pass it on to the consumer -- it will still be below the natural base of where prices ought to be, as a result of having had a number of years of stagnation.

Our outlook for 2019 is of continued growth. Should there be a downturn, as tends to happen within international tourism, [the reduced VAT] is something that the government will reserve to be able to help act as a catalyst for future growth and try to kick-start the industry should it fail. But we're quite positive that it will continue to grow sustainably and grow in a balanced way throughout the island of Ireland throughout the year.

One of the results of the reversal back to the normal rate of VAT will be that we have additional funding to continue our international marketing, and also for our domestic tourism development authority to enhance the infrastructure to be able to cope with the increased number of visitors. So whether that's down to fundamental things like car parking and roads, changing and upgrading the products and experiences that are available, building new greenways and walking trails, that would augur well for the year-round-destination pitch that we're making.

Q: Given Tourism Ireland's mission to promote "the island of Ireland," what effect might Brexit have on its efforts?

A: It's a big risk for us. It's a big challenge. As the government in Ireland, we're working very closely with our counterparts in the United Kingdom and the European Union to try to ensure that we have as smooth a transition as possible. What we don't want to see is a return of the hard border between Northern Ireland and Ireland. What we want to ensure is that there is free movement of people and goods.

Certainly, Ireland's position from June 2016 [the date of the Brexit referendum] on has been that we don't envisage a return of a hard border on the island of Ireland. That's the European Union position, as well. And we hope we can achieve that, we're confident we can achieve that. We're not planning for anything else; that's not on our agenda. Because we know the all-island economy, not just in tourism but in so many other sectors, is a very positive thing, it works well and we need to be taking down borders, not putting them up. And I'm very hopeful that things will work out and common sense will prevail in terms of what's right for the people of the island of Ireland and for Great Britain, as well.

We've already seen the negative effects of the Brexit vote through the falloff that we've had in visitors from Great Britain since 2016. We had a 5% reduction in 2016 following the vote that happened in June; in the second half of that year, the sterling's value dropped, which made it more expensive for people from Great Britain to holiday in Ireland. And the overall figures for that year, even though it was only effective for six months, was 5% less than 2015. 2017's figures were down 5% again on the 2016 figures.

Thankfully, in 2018 we saw slight recovery, but throughout that time we also  engaged in a process of intense marketing within Britain. We haven't given up on that market; it's a very important market for us -- over 4 million visitors from Great Britain every year. But what we've also done is try to diversify. So our efforts in North America have been stronger, our efforts in mainland Europe have been stronger, and efforts in emerging markets like China, Australia and New Zealand have been stronger.

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