Pages 1--139 from Tourism Review Report.pdf

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New
Horizons

for
Irish

Tourism

Report
of
the

Tourism

Policy
Review

Group
to
John

O

Donoghue

T.
D.

Minister

for
Arts,

Sport

&
Tourism

An
Agenda

for
Action September 2003

Report of the Tourism Policy Review Group New Horizons for Irish Tourism
9
78075

5
71
7804

ISBN
0-
7557-

1780-
5 1
1 Page 2 3
I
Dear Minister
I have the honour to submit to you, on behalf of the Tourism Policy Review Group, our Report on the Review

of Irish Tourism. We have completed the Review under the title New Horizons for Irish Tourism: An Agenda for
Action. The Report has been completed in accordance with the terms of reference you provided to us.

Yours sincerely

JOHN TRAVERS
Chairman
30th September 2003

Report of the Tourism Policy Review Group to
JOHN O DONOGHUE T. D.
Minister for Arts, Sport & Tourism

Tourism Policy Review Group 2
2 Page 3 4
II
Irish tourism has been a major success story -perhaps the
most successful sector of Irish-owned enterprise since the
foundation of the State. Its contribution as a major source of
foreign earnings with a low import content, as a powerful
instrument of national and regional development and as a
source of entrepreneurial opportunity has not always been
fully acknowledged and recognised.

The Review Group draws attention to a number of
important facts about the tourism industry in Ireland.
Employment in tourism over the past 10 years, has increased
at a faster pace than even the unprecedented high rates of
employment increase in the economy generally over that
same period. Today the sector employs more people than the
totals employed in either Irish-owned or foreign-owned
manufacturing industry. Tourism is by far the largest, Irish-
owned, internationally-traded services sector in the economy.
It is a sector firmly rooted in the natural and built
environment and in the people and culture of Ireland. As a
product, therefore, it cannot relocate to another country. But,
by the same token, its customers, both domestic and
overseas, can. International analyses indicate that, despite the
post-2001 slowdown, the future prospects for international
tourism over the next 20 years are good and similar to the
high growth rates of the previous 20 years.

It is not certain, however, that despite the strong
opportunities, Irish tourism will, over the next 10 years, enjoy
the same growth and success as it has over the past decade.
The sector is at a significant turning point in its development.
Competitiveness has been lost in recent years. A certain
complacency, the fruit, partly of success, has set in across many
parts of the industry. And this is happening at a time when the
expectations and requirements of the potential customers of
Irish tourism have become more demanding and when the
alternative choices of high visitor attraction and good value
for money available to them have greatly increased.

Preface
John Travers Chairman 3
3 Page 4 5
III
It is, therefore, certain that the policies and actions that
have delivered strong performance in Irish tourism in the past
will not suffice to do so in the future. The way in which the
changes now required are anticipated, managed and put in
place will determine the future success of Irish tourism as a
sector of investment opportunity, innovation and enterprise
and as an instrument of Government development policies.

Regaining the competitiveness lost in recent years is
central to the new strategy for the development of Irish
tourism set out in this Report. This is the fundamental
challenge which the industry itself must face and overcome.

There are also important challenges for the Government
none more so than the recognition through relevant, ,
practical and systematic actions of the central role that the
tourism industry plays as a major instrument of national and
regional development. This will only come about if the scope
of tourism policy formulation and implementation is
extended beyond its traditional ambit to encompass all areas
of Government policy that impact in a significant way on the
development of tourism.

The Report of the Review Group acknowledges and
articulates the constructive and positive role which tourism
policy has played in supporting the significant growth
achieved by the industry over the past decade and more.
It concludes, however, that the major international and
domestic changes affecting Irish tourism at the present time
and those anticipated in the foreseeable future, now require
urgent and fundamental changes in the policies and actions
of both the Government, and of the tourism industry itself,
if the success of the industry over the past decade is to be
replicated in the future.

This Report, therefore, sets out a new strategy for Irish
tourism which is comprehensive, coherent and challenging
for the industry itself and for Government. We believe that if
it is followed through to implementation with conviction,
energy and commitment that it will make a real and lasting
contribution to the development of Irish tourism in the years
ahead and to the complementary objectives of national and
regional development.

I wish to record my appreciation and thanks to my
colleagues on the Review Group for the individual talents,
wisdom and contributions they brought to the work and
deliberations of the Group. I want to express the thanks of
the Group to Mary Jackson for her commitment and

professionalism as Secretary to the Group and to her
colleague Gráinne Ní Néill for her dedication and support. I
also wish to extend our appreciation to Malcolm Connolly,
Deirdre O Keeffe, Brian Maher and Eileen Gallagher of Fáilte
Ireland and to Mark Henry of Tourism Ireland who provided
much of the analytical and administrative support underlying
the work of the Review Group.

Finally, I would like to thank John O Donoghue,
Minister for Arts, Sport and Tourism, for the opportunity
afforded to the Review Group to make a contribution to the
development of such an important sector of national and
regional development and to the Secretary General of the
Department, Philip Furlong, for his support and advice.

John Travers
Chairman
30th September 2003

Tourism Policy Review Group 4
4 Page 5 6
IV
Members of the Tourism Policy Review Group John Travers
( Chairman)
former Chief Executive Forfás

Patrick O Donoghue
Managing Director
Gleneagle Hotel

Paul Bates
Assistant Secretary
Department of Arts,
Sport and Tourism

Shaun Quinn
Chief Executive
Fáilte Ireland

Brian Patterson
Chairman
The Irish Times

Peter Cassells
Executive Chairman
National Centre for
Partnership and
Performance

Gillian Bowler
Businesswoman
and Chairman of
Fáilte Ireland 5
5 Page 6 7
V
Niall Reddy
former Acting Chief
Executive Bord Fáilte

Paschal Taggart
Financial Advisor

Frank Roche
Academic
Smurfit Graduate School
of Business

Mary Jackson
Secretary to the Group

Tony Kelly
Marketing Director
Irish Ferries

Pat McCann
Chief Executive
Jurys Doyle Hotel Group plc

Paul O Toole
Chief Executive
Tourism Ireland

Tourism Policy Review Group 6
6 Page 7 8
VI
Chairman s Letter to the Minister I
Chairman s Preface II
Members of the Tourism Policy Review Group IV
Contents VI
Executive Summary VIII

1 TOURISM WORLDWIDE AN OVERVIEW
Summary of Main Conclusions 4
1.1 A Global Industry 5
1.2 The Underlying Forces Driving Worldwide Tourism 6
1.3 Key Trends in International Tourism and Travel 7
1.4 Recent Performance 7
1.5 Future Prospects and Determinants of Growth 9
1.6 Tourism and Government Policies Internationally 10
1.7 Overview/ Conclusions 10

2 IRELAND S TOURISM INDUSTRY: ECONOMIC CONTRIBUTION,
STRUCTURE AND POLICY

Summary of Main Conclusions 14
2.1 Tourism s Contribution to Economic, Social and Regional Development 15
2.2 The Structure of the Tourism Industry 16
2.3 Tourism Policy 19
2.4 Industry, Government and European Union Expenditure on Tourism 20
2.5 Overview/ Conclusions 22

3 IRELAND S TOURISM INDUSTRY: OVERVIEW OF PERFORMANCE 1990-2002
Summary of Main Conclusions 28
3.1 Tourism Performance Visitor Numbers and Revenue 29
3.2 The Irish Tourism Experience 36
3.3 Overview/ Conclusions 38

4 TOURISM IN IRELAND TODAY -AN ASSESSMENT
Summary of Main Conclusions 42
4.1 Foundations for Future Success 43
4.2 Competitiveness and Value for Money 44
4.3 Product Development 48
4.4 Access Transport 51
4.5 The People in Tourism 54
4.6 Marketing and Promotion 55
4.7 Wider Issues Affecting Tourism Growth 57
4.8 Tourism Policy Formulation and Implementation 58
4.9 Overview/ Conclusions 59

Contents 7
7 Page 8 9
5 A STRATEGY FOR IRISH TOURISM 2003-2012
Summary of Main Conclusions 64
5.1 The Components of a New Tourism Strategy 65
5.2 Inter-dependency of Activities -A Defining Characteristic of Irish Tourism 65
5.3 A New Vision for Irish Tourism 65
5.4 Irish Tourism Forces of Change 66
5.5 Strategic Targets for Irish Tourism 2003-2012 67
5.6 Future Drivers of Success 71
5.7 Flexibility/ Agility 79
5.8 Decision-Making Framework 79
5.9 Overview/ Conclusions 80

6 IMPLEMENTING THE STRATEGY THE ACTIONS REQUIRED
6.1 Translating Strategy into Action 83
6.2 Action Plan 2003-2005 84
Actions to Improve the Business Environment for Tourism Operators 85
Actions to Improve Competitiveness and Value for Money 89
Actions to Improve Access Transport 92
Actions to Improve the Use of Information and Communication Technologies 95
Actions to Support Product Development and Innovation 97
Actions to Support Marketing and Promotion 101
Actions to Support Human Resource ( People) Capability 104
Actions to Support More Effective Government Leadership and
Interventions in Promoting Tourism 106
Actions to Improve the Quality of Information, Intelligence and Research 109
Implementation Arrangements 110

Appendix A -Background to Establishment of Review Group and Working
Procedures

Appendix B -Terms of Reference
Appendix C -List of Written Submissions
Appendix D -Tourism Policy on the Island of Ireland
Appendix E -Other State Bodies with Functions Associated with the
Development of Tourism

VII

Tourism Policy Review Group 8
8 Page 9 10
VIII
1. Tourism Worldwide An Overview
International tourist numbers will double over the next 20
years but the profile and requirements of customers are
changing rapidly and competition is becoming more intense.

1.1 The growth in international tourism has been one of
the most remarkable economic and social phenomena
of the past century. 700 million international trips are
now made worldwide each year. Tourism is a major
economic sector generating over 500 billion in annual
receipts, sustaining in excess of 70 million jobs and
accounting for almost 4% of global GDP. The industry
has outpaced general economic growth, since 1975, by
a factor of 1.3. Tourism growth has been driven by a
number of key factors, including economic wealth,
mass communication, affordable travel ( especially by
air) , availability of leisure time and the travel
opportunities opened up by new technologies.

1.2 After a prolonged period of uninterrupted growth,
tourism has stalled over the past two years. As of
autumn 2003 it is recovering slowly from the post-2000
global economic downturn, terrorism, the war in Iraq
and the impact of the SARS virus. And future prospects
are good. According to World Tourism Organisation
projections, the number of international arrivals is
expected to double over the next 20 years to almost
1.6 billion a rate of growth in tourism similar to that
of the past 20 years. While current economic conditions
and uncertainties may continue to depress demand in

the immediate future, travel and tourism is firmly
established in the lifestyle and discretionary spending
pattern of the developed economies pointing to an
eventual resurgence in demand.

1.3 In common with all internationally traded services,
global tourism is experiencing significant change. A vast
array of product offerings are becoming available,
encompassing traditional leisure pursuits, new
entertainment and retail complexes, simple back-to-
nature and health-related activities, cultural and
heritage experiences and combinations of different
product offerings. Many new tourism destinations are
opening up providing increasing choice to customers.
Easy access to these destinations is becoming common
place and cheaper. Customer characteristics are
changing rapidly including shorter and more frequent
trips, greater use of e-commerce, later bookings, more
tailored holiday experiences and growth in the older
people share of the market. Tourism will, in future, be
increasingly demand driven with greater emphasis
being placed on value for money, personal fulfilment,
unique experiences, authenticity, emotional
involvement and travel convenience.

1.4 In general, tourism policy internationally is being given
increased weight and emphasis in the range of
Government policies aimed at national and regional
development.

2. Ireland s Tourism Industry: Economic
Contribution, Structure and Policy

Irish tourism is a major economic sector of enterprise, and
of national and regional wealth creation. The industry at
present generates 4 billion in foreign revenue earnings,
supports 140,000 jobs and is by far the largest, Irish-
owned internationally-traded sector of the Irish economy.

2.1 Tourism is highly important to the Irish economy. It
delivers the following major benefits

Benefits of Irish Tourism

4 billion in annual foreign earnings
1 billion in annual domestic earnings
140,000 jobs
Up to 2.2 billion in tax receipts each year

International Tourist Arrivals
Source: World Tourism Organisation ( WTO)
Africa Middle East South Asia
Europe Americas East Asia/ Pacific

1950

800
(
m)

700
600
500
400
300
200
100
0
1960 1970 1980 1990 2000

Executive Summary 9
9 Page 10 11
IX
4.4% of GNP
A major instrument of national and regional
development

A sector of major opportunity for Irish-owned
enterprise

Employment grew in the sector by more than 70%
between 1990 and 2002 -a rate of growth
considerably above the 50% growth in employment
generally in the economy over that period. To put the
annual foreign revenue earnings of 4 billion from
tourism in perspective, it is equivalent to more than
50% of the total value of exports by Irish-owned
manufacturing industry or more than twice the value of
exports of Irish-owned internationally-traded services.

2.2 Tourism embraces a wide range of businesses and
services in thousands of enterprises, predominantly
Irish-owned and small and medium in size, distributed
throughout the country. It is a complex, diverse sector
of economic activity. It has a well-structured
representative system which works with Government
Departments and State Agencies in a productive
partnership arrangement to promote the development
of the industry. However, notwithstanding its size and
well-established representative structures, the sector has
had difficulty in ensuring that the value of its economic
and social contribution is fully acknowledged at
Government level and more widely.

2. 3 Government involvement in the development of tourism
has been of long-standing duration. This reflects the
importance of the industry to national and regional
development and the market failures ( i. e. the likely
returns not justifying private sector investment) intrinsic to
a highly-dispersed industry made up of small and
medium sized enterprises operating in a sophisticated
internationally-competing services sector. Today, the
focus of Irish tourism policy is on supporting sustainable
growth in visitor expenditure, with an emphasis on a
wider regional and seasonal spread of business. The
fundamental components of policy encompass:

a Government Department ( the Department of Tourism, Culture and Sport) which promotes and represents
tourism as an important instrument of national
and regional development and source of foreign
earnings within the general Government decision-
making process

a number of State Tourism Agencies which have recently been restructured to support both the
international marketing of the island of Ireland as
a tourist destination and the development of
the sector across its many facets in locations
throughout Ireland

a strong regional organisational structure for the promotion of tourism exercised through the State

Tourism Agencies, the Regional Tourism Authorities and
Shannon Development, County Tourism Committees,
Product Development Management Boards, County
Enterprise Boards and LEADER Groups

a number of evolving partnership arrangements between the State Tourism Agencies and private

sector representatives of the industry
the periodic statement and re-statement of the vision, targets and objectives guiding tourism

development in Ireland by the Department and the
State Agencies which operate under its aegis

a range of State fiscal, financial and advisory supports both Exchequer and EU funded for the

promotion of tourism operating generally, but not
exclusively, under the aegis of the Department of
Arts, Sport and Tourism.

2.4 The first comprehensive statement on tourism policy in
Ireland was set out in a Government White Paper in
1985. Government policy statements have gone
through a number of iterations since then in response
to changing national and international circumstances
and the underlying organisational structures have
evolved in keeping with these changes. This period of
more structured policy development and
implementation has coincided with a substantive take-
off in the development of tourism in Ireland. A number
of factors underlie the rapid expansion of tourism here.
These include a major international increase in demand
driven by the rising real income levels in many parts of
the world, the falling cost of communications and
transport and currency developments favourable to Irish
tourism. Central to the strong performance of Irish
tourism in a favourable international market
environment has been the intrinsic attractiveness of the
landscape, culture and people of Ireland as a visitor
destination together with the energy, enterprise and
increasing professionalism of the people in a largely
Irish-owned service industry. It is also reasonable to
conclude that improvements in policy formulation and
implementation in Ireland played their part.

Tourism Policy Review Group 10
10 Page 11 12
X
2.5 Led by the private sector, with Exchequer and EU
support, total capital spending on tourism-related
products amounted to 4.3 billion over the 1990s. The
direct Exchequer spend on tourism amounts to 107
million in 2003, of which approximately 80 million is
related to marketing and associated costs. In addition, it
is estimated that the industry spend on marketing was
of the order of 134 million in 2001.

3. Ireland s Tourism Industry: Overview of
Performance 1990-2002

Visitor numbers to Ireland and tourism receipts
throughout the 1990s grew well ahead of global
trends, benefiting all regions of the country.
Irish tourism gained market share in most markets
in which it competes. While visitor experience
generally has consistently met or exceeded
expectations for over 90% of visitors, the
perception of good value for money has fallen
significantly in recent years.

3.1 Visitor numbers to Ireland grew well ahead of global
trends throughout the 1990s, increasing by an average
of over 7% each year compared with a corresponding
world figure of 4.3% . In terms of receipts, Ireland s
performance also exceeded European and global
growth rates in the eleven years up to 2001. The best
performance source markets for Irish tourism have been
the US and Britain.

1990 1995 2000 2001 2002
Britain 1,785 2,285 3,428 3,340 3,452

Mainland Europe 744 1,101 1,435 1,336 1,378
France 198 234 283 280 298
Germany 178 319 319 285 288
Other Europe 368 548 834 771 792
North America 443 641 1,056 903 844
USA 402 587 958 829 759
Canada 41 54 98 74 85
Other Overseas Areas 124 204 261 261 245
Total Overseas 3,096 4,231 6,181 5,840 5,919
Foreign Revenue Earnings ( million) 1,112 1,749 2,824 3,115 3,267
Receipts paid to Irish air and sea carriers ( million) 334 383 813 807 718
Total Foreign Revenue Earnings 1,446 2,132 3,637 3,922 3,985

Visitor Numbers and Foreign Revenue Earnings 1990 -2002 11
11 Page 12 13
XI
3. 2 Travel to Ireland by those whose main purpose for visiting
was a holiday has grown slightly ahead of the trend in
overall visitor numbers. Irish tourism has increased its
market share of visitors from the US, but latterly has
seen a decline in its share of an expanding British
market and has been losing market share from
Germany and France. All regions of Ireland have
benefited from the growth of Irish tourism in recent
years. Dublin and the South West have achieved the
highest rates of growth nationally. The strong Dublin
performance has been boosted by the significant
increase in the number of visitors on short city breaks.
The lowest growth rates were recorded for the Shannon,
the West and North West regions. Most activity holidays
showed considerable growth in the late 1980s and
early 1990s but have recorded declines since then.

Domestic tourism remains a bedrock for the Irish tourism
industry, contributing almost half of all visitor numbers
seeking accommodation in 2002 and representing a
fifth of the overall revenue generated by tourism.

3. 3 Survey analysis shows that the core tourism appeal of
Ireland is characterised by people, place and pace . Visitors to
Ireland are motivated principally by the expectation of a
warm and welcoming people, the perception of beautiful
unspoilt scenery and the relaxed pace of life. The holiday
experience of visitors to Ireland has met or exceeded
expectations in the case of over 90% of visitors.

4. Tourism in Ireland Today An Assessment
Irish tourism is, arguably, the most successful sector of
Irish-owned enterprise since the foundation of the State.
The industry today has strong foundations which
underpinned its success in the 1990s. It is, however, at an
important turning point in its evolution. Recent years
have seen a significant loss of competitiveness which, if
not redressed, will undermine the capacity of the industry
to benefit from the strong growth envisaged in
international tourism in the years ahead.

4.1 The Irish tourism industry today has strong foundations
based on a substantial and increased customer base,
high overall customer satisfaction ratings, competent
and experienced staff, many highly successful business
enterprises and the quantity and the generally good
quality of its accommodation, restaurants, leisure
facilities and visitor attractions. The industry has also a
successful record in meeting challenging investment,
revenue earnings and employment targets set under
successive national plans and EU Operational Programmes
for Tourism. These provide a solid base to address with
confidence the new challenges facing the sector.

4.2 Today, the industry is at a turning point in its
development. It faces a major challenge in regaining
competitiveness in the light of reducing customer
satisfaction ratings, in particular as regards delivering
good value for money. There has been a noticeable

Regional Distribution of Overseas and
Domestic Tourism Revenue

Tourism Policy Review Group

Source: Fáilte Ireland
1990
m
2002
m
Real Growth
1990-2002
As a % of
1990 revenue
As a % of
2020 revenue

Important Factors when Choosing to Holiday
in Ireland and Satisfaction Ratings

Source: Fáilte Ireland Visitor Attitudes Surveys 1997-2002
Very Important ( % ) Rating -% Very Satisfied
1997 1999 2000 2001 2002

Friendly, hospitable people 87 88 88 89 88 90
Beautiful scenery 86 89 89 89 89 91
Memorable experience 82 83 82 83 84 82
Natural, unspoilt environment 81 83 77 79 79 83
Safe and secure 77 76 77 78 79 80
Easy, relaxed pace 74 83 83 82 82 82
Suitable for touring 66 76 72 73 73 71
Attractive cities/ towns 64 59 62 66 64 65
Overall Satisfaction Rating 94 91 94 94 93 12
12 Page 13 14
XII
drop in recent years in the perception of good value for
money by overseas visitors, which has declined from
63% in 2000 to 45% in 2002. This is mainly price-related.

For visitors, the price issue relates not so much to the
cost of access and accommodation, which is generally
pre-booked, but to the price of eating out, drink, food
in shops and the general cost of living when they get
here. While resolute action by the Government is
essential to help reduce inflation, the tourism industry
itself has the primary role in driving down costs in the
industry. Reforms in the Irish taxation system over the
past decade have resulted in substantial gains for
businesses generally, but comparatively high VAT rates
and excise duties contribute to unfavourable price
differentials in certain key tourism products in Ireland in
comparison with other eurozone countries. High
insurance costs are also a particular concern, pointing
to the need to accelerate the Government' s insurance
reform programme to reduce premiums.

4.3 The range of tourism products and services, including
tourist accommodation, has increased greatly in quantity
and improved significantly in quality in recent years.
There are at present, however, indications of
underutilised capacity and falling margins which, if not
redressed, could threaten reinvestment and the
maintenance of standards in the future. Some
remaining gaps exist in tourism infrastructure, most
importantly the development of a National Conference
Centre and a National Sports Stadium. There is also a
need for an enhanced emphasis on product innovation
and the better marketing and promotion of tourism
products to meet changing customer requirements.

Environmental conservation must become a central
element of tourism policy and its implementation. Air
and sea access to Ireland has seen major improvements
during the 1990s. But changes which enhance
competitiveness in transport policy and the further
improvement of access infrastructure in particular at
Dublin Airport and in serving the wider catchment
needs of Cork and Shannon airports hold significant
potential to generate increased visitor numbers at both
national and regional level.

4.4 The professionalism, friendliness and quality of services
provided by people are essential success factors in Irish
tourism. A greater level of investment is needed in
human resource development to upgrade skill levels
and to address staff retention and other problems.
While there is a strong funding commitment to tourism
marketing and promotion by the State and the tourism
industry, actions are required to improve the efficiency
and effectiveness of spend in this area. The ability of
the Department of Tourism, Culture and Sport, the State
Tourism Agencies and the tourism industry to more
effectively shape and influence Government policy in
the wider issues that impact on tourism, will be a key
influence in determining the future success of the
sector. The Department' s policy formulation and
implementation role and capability requires to be
strengthened and developed in line with the new
tourism strategy set out in this Report.

Overseas Holidaymakers Rating of Value for Money Overseas Holidaymakers Rating of Value for Money
Source: Fáilte Ireland/ Survey of Overseas Travellers Source: Fáilte Ireland/ Survey of Overseas Travellers
%
of
holiday

visitors

Very good/ good value Fair/ Poor/ Very poor value
1997 1998 1999 2000 2001 2002 30

40
50
60
70
80 13
13 Page 14 15
XIII
5. A Strategy for Irish Tourism 2003-2012
The New Vision for Irish Tourism is that of a dynamic,
innovative, sustainable and highly-regarded sector -
offering overseas and domestic customers a positive and
memorable experience beyond their expectations.
Assuming reasonably favourable international economic
and geopolitical circumstances, the Review Group has set
a challenging target to double overseas visitor spend to
6 billion over the 10 year period to 2012, with an
associated increase in visitor numbers from just under 6
million to 10 million.

5.1 Irish Tourism at a Crossroads: Irish tourism in 2003 is
at a crossroads. It requires a new strategy to chart the
way forward at a pivotal point in its evolution. It has
come through a period of major development and
success in the 1990s probably the most successful
decade in its history. Today, it faces major changes in
the international economic and geopolitical environment
very different to those which helped to underpin its
success in the 1990s. Significant changes have emerged
in the profile of its customer base, both at home and
abroad. The competition that it faces from traditional
competitors has intensified in the face of a downturn
in world tourism and some uncertainty about the
immediate future. At the same time new competitors
from Eastern Europe and further afield have entered the
market in which Irish tourism has traditionally competed.

5.2 Competitiveness Threat: All of this is happening at a
time when the competitiveness of Irish tourism has
deteriorated and is under further threat. This arises
from a combination of price pressures and from a
certain complacency at industry and Government
levels that the good performance of the past can,
on the basis of an out-dated approach, be sustained
in a changed international and domestic environment.
Congestion factors have arisen following a decade
of both economic and tourism growth faster than
had been anticipated and faster than the capacity
of many elements of infrastructure to adjust to the
increased demands.

5.3 Public Finance Constraints: It is also clear that the
significant levels of financial support for the
development of the industry from the EU and
Government, widely available in the 1990s and to the
present time through direct grants, taxation incentives
and infrastructural supports, will not be available at
anything like the same level in future years.

5.4 Irish Tourism An increasingly Self--Reliant, Agile
and Adaptable Sector of Successful Enterprise: A
successful Irish tourism industry in the years ahead will
be an industry that is more self-reliant, agile and
adaptable to change in the market place. The industry
has shown, over the past decade and more, its capacity
to adapt. It has many strengths including, and beyond,
those available when the industry started on an
extraordinarily successful development path in the
1990s. Among these strengths are its proven track
record of meeting customer needs and a deep
knowledge of customer requirements associated with
that success, a capital stock based on recent investment
that is modern and efficient across all segments of the
industry and a people in tourism resource to which
visitors have consistently awarded the very highest
accolades. Arguably tourism represents the most
successful sector of Irish-owned enterprise since the
foundation of the State.

5.5 Competitiveness The Key to Success: Central to the
success of Irish tourism in the years ahead will be a
recovery of the competitiveness that has been lost in
recent years.

5.6 A New Strategy for Irish Tourism Key Components: :
To address these issues a new strategy for Irish tourism
is needed which clearly sets out a new way forward in
the context of the fundamental changes now affecting
the industry. Such a strategy has been developed by
the Review Group. It encompasses:

Components of a New Strategy for Irish Tourism

a clear vision of where Irish tourism wants to go
an understanding of the underlying forces that
are shaping the industry at present and those
that will continue to do so in future

the establishment of challenging targets and
objectives for the industry going forward

a knowledge of the factors that will drive success
in the industry

an enhanced capability to innovate and respond
effectively to unforeseen circumstances

a decision-making framework that facilitates
the formulation of such a strategy and its
implementation through consistent and decisive
actions at Government level and across the
different sectors of the industry itself.

Tourism Policy Review Group 14
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XIV
5.7 A New Vision for Irish Tourism: The new vision for
Irish tourism set out in this Report is of a dynamic,
innovative, sustainable and highly-regarded sector,
offering overseas and domestic visitors a positive and
memorable experience beyond their expectations.

Vision for Irish Tourism
Ireland will be a destination of choice for discerning
international and domestic tourists which:

provides a tourism experience that exceeds customer
expectations in terms of friendliness, quality of
environment, diversity and depth of culture

has a range of high-quality, world-class, competitive
products and services widely distributed throughout
all the regions of the country

is a vibrant source of foreign and regional earnings
throughout the year

respects the natural and built environments and
supports their conservation and enhancement

provides attractive career opportunities in tourism for
people with a range of skills and employment needs

provides the opportunity for people working in
tourism to enhance their skills through experience,
training and life-long learning

respects and supports Irish culture in all its diversity
provides a positive international profile of Ireland.

The new strategy for Irish tourism can be represented diagrammatically as follows:
Forces of Change
Fundamental Changes Affecting Global &

Domestic Tourism

Vision
Contribution to National Social & Economic Objectives

Future Drivers of Success
Competitiveness and Value for Money, Product, People, Marketing,

Technology, Access Transport & Business Environment

Flexibility
Agility to respond to change

Targets & Objectives
Motivators Benchmarks of Performance Decision-making Framework Improved Resource Allocation

Tourism Strategy
2003 -2012 15
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XV
5.8 International Prospects: The medium and long-term
prospects for tourism worldwide remain strong despite
the recent deceleration in the underlying growth rates
since 2000 because of economic and geopolitical
uncertainty. The fundamental drivers of change
affecting tourism internationally are expected to result
in strong growth rates which, over the next 20 years,
are projected to be similar to the doubling of tourist
traffic that occurred over the period 1980-2000.
Tourism development will continue to be largely
determined by the rate of global and regional
economic growth and associated increases in the
disposable incomes of a wide distribution of individuals.
The developed countries will remain the largest source
and destination of tourism numbers in absolute terms
but new markets for Ireland are emerging including
those from Eastern Europe and the Far East.

5.9 Key Markets and Determinants of Success: For
Ireland, the tourism markets of most importance will
continue to be in Britain, the US, the larger countries of
Mainland Europe and the domestic market. But the
customer profile is changing rapidly, driven by
technology, demographics and societal changes such as
better education, increasing interest in cultural
experiences, increased leisure time, multiple but shorter
holiday breaks, greater interest in health enhancing
tourist experiences and increasing empathy with
environmental conservation. Developments in access
transport are of fundamental importance in facilitating
tourism development. The quality, price, frequency and
routes of air and sea carriers have improved during the
1990s. In particular, low fare airline services have
transformed the market for travel between Ireland,
Britain and Mainland Europe. The potential for
additional route development in these services, and on
transatlantic air routes, remains strong. The upgrading
of internal transport services will be important for the
regional spread of visitors. Measures to optimise the use
of new information and communication technologies
throughout the tourism sector are also of key importance.

5.10 Tourism Development Targets 2003-2012: Ambitious
but realistic targets for key indicators of performance
are an essential component of Irish tourism strategy.
Strategic targets, few in number, provide a sense of
direction for tourism policy and facilitate the
prioritisation of actions to support the development of
the sector. Assuming reasonably favourable
international economic and geopolitical circumstances,
the Review Group has set a challenging target to

Tourism Policy Review Group 16
16 Page 17 18
double overseas visitor spend from 3 billion to 6 billion
over the 10 year period to 2012, with an associated
increase in visitor numbers from just under 6 million to 10
million. Targets are also being set

to increase the share of promotable segments
( holiday, conference, language study and incentive
travel) from 45% to 50% of total visitor numbers

to increase the number of domestic holiday trips
from 3 million to 4.3 million, with associated revenue
earnings increasing from 0.6 billion to 1 billion

to double the number of overseas promotable visitors
staying at least one night in the Border Midland and
Western ( BMW) region.

XVI
Revenue ( million 2002 prices) 2002 Actual 2006 Target 2012 Target Av. Annual Growth % 2002-2012
Overseas Visitor Spend 1 3,088 3,835 6,000 6.9%
No. of visitors ( m)
Britain 3.5 4.1 5.5 4.8%
Mainland Europe 1.4 1.7 2.3 5.3%
North America 0.8 1.0 1.8 7.6%
Other areas 0.2 0.3 0.5 6.3%
Total 5.9 7.0 10.0 5.4%

Overseas Revenue and Visitor Number Targets to 2012

1 Excluding receipts paid to Irish air and sea carriers & revenue from Northern Ireland visitors
Overseas Visitor Number Targets to 2012

No.
of
Visitors

(
m)

2000 2006 2012
North America
Other areas
Britain
Mainland Europe

0
1
2

3
4

5
6 17
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XVII
5.11 The Drivers of Success: The key strategic drivers of
success for Irish tourism in the future which will determine
the achievement of the targets set are as follows:

Key Drivers of Success

Business Environment
Competitiveness & Value for Money
Access Transport
Information and Communication Technologies
Product Development & Innovation
Marketing & Promotion
The People in Tourism
The Government Sector
Information, Intelligence & Research

The impact of these factors on Irish tourism in the
future are set out in detail in the main Report.

5.12 An Agenda for Action: The tourism development
strategy set out by the Review Group provides a clear
framework and set of actions to support the further
development of tourism in Ireland and its regions. The
specific actions required are clearly set out together
with the reasons for taking them, the bodies
responsible for implementing the actions and the
timeframe within which the actions should be
accomplished.

5.13 I mplementation Group: In order to reflect the action
orientation of the report a small, high-level
Implementation Group should be established, for a
two-year period with high-level representation from the
private and public sectors. The Group should report
directly to the Minister for Arts, Sport and Tourism. The
task of the Implementation Group will be to oversee
the implementation of the recommended actions in the
Report and to revise them as necessary in consultation
with the bodies responsible for their implementation. A
strong, ongoing process of consultation with the
industry is a critical component of the follow-up to the
report of the Review Group.

6. Implementing the Strategy
the Actions Required

The policies and actions that have delivered strong
performance in Irish tourism in the past will not suffice to
do so in the future. The way in which the changes now
required are anticipated, managed and put in place will
determine the future success of Irish tourism as a sector
of investment opportunity, innovation and enterprise, and
as an instrument of Government development policies.

6.1 The Irish tourism industry is a highly complex and
diverse sector of interdependent, economic activities
within the domain of both the private and public
sectors. The actions now required to implement the
new strategy for Irish tourism outlined in the Report are
equally diverse and wide-ranging. They encompass
many different decision makers in both the private and
public sectors.

6.2 In identifying the key actions needed to deliver the
strategy outlined, the Review Group was guided by
three fundamental principles

Fundamental Principles
Guiding Recommended Actions

tourism growth is driven by private sector
enterprise, innovation and investment

the need for a consistent framework of well chosen
actions across all areas of Government activity

targeted public sector interventions to be confined to
market failure in close partnership with the industry.

Tourism Policy Review Group
Overseas Visitor Revenue Targets to 2012 ( 2002 prices)
2000 2006 2012
Overseas Visitor Spend

1,000
2,000

3,000
4,000 ( m)

5,000
6,000

7,000 18
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XVIII
6.3 Substantive change is required in key areas of
Government policy, in the delivery of that policy by the
State Tourism Agencies, in the work of the industry
representative bodies, and, importantly, at the level of
individual enterprises throughout the industry. The
effectiveness and efficiency with which the changes
required are anticipated, managed and delivered will
determine the future success of Irish tourism as a sector
of private sector investment opportunity, innovation
and enterprise, and as an instrument of Government
social and economic development. The fundamental
components of that change require

a new policy framework and set of related actions that
continue to promote strong, self-reliant, profitable,
innovative, customer-focused tourism enterprises

an industry that itself anticipates and embraces the
changing needs of its customer base both
domestic and overseas visitors and offers to each
customer a product, service and experience which
surpasses that available from alternative providers
both at home and abroad.

6.4 The specific actions required to be taken under each of
the key drivers of a successful Irish tourism industry are
set out in Chapter 6. The actions focus on the period
2003-2005. To attempt to recommend today what
actions will require to be taken beyond 2005 is not
realistic. What is required, instead, in an increasingly
volatile tourism environment, is a process of frequent
review of strategy, at two-yearly intervals, and the
adoption of a series of rolling 2-3 year action plans
which reflect changing circumstances, the periodic
review of strategy and the immediately preceding
action plan.

6.5 The set of actions recommended in the Report may,
accordingly, be regarded as t he first rolling action plan
for the development of Irish tourism over the next
decade. It sets out

the rationale underlying the identification of the
particular driver of success in Irish tourism

the objectives which the actions recommended seek
to attain

where primary responsibility lies for undertaking the
actions recommended

the timeframe within which the actions
recommended should be accomplished.

The longer term strategy and more immediate action
plan set out in this Report provide a coherent
framework of actions for the development of Irish
tourism, at this stage of its evolution, particularly taking
account of the fact that the majority of businesses are
small and medium in size. The strategy and action plan
will facilitate the ongoing review process recommended
as an inherent element of the development process for
the industry going forward. The review process will be
led by the Department of Tourism, Culture and Sport, and
will encompass the State Tourism Agencies, other
Government Departments and State Agencies whose
policies and actions significantly affect tourism and,
importantly, representatives of the key sectors of the
industry itself. 19
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XIX
Tourism Policy Review Group 20
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1 21
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2
Tourism Policy Review Group
Tourism Worldwide -An Overview
International tourist numbers
will double over the next
20 years but the profile and
requirements of customers
are changing rapidly and
competition is becoming
more intense.

1 chapter one 22
22 Page 23 24
3 23
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4
Summary of Main Conclusions
International tourism:
is a major economic sector generating over 500 billion in tourism receipts,
accounting for almost 4% of global GDP and sustaining close to 70 million jobs

has outpaced general economic growth, since 1975, by a factor of 1.3
continues to be driven largely by affordable travel, especially by air, and the
travel opportunities opened up by new technologies

is, today, recovering slowly from the economic downturn, terrorism, the war in
Iraq, and the impact of the SARS virus on travel in the first half of 2003

is experiencing significant changes in customer trends, including shorter and
more frequent trips, greater use of e-commerce, later booking, more tailored
holiday experiences and growth in the older people share of the market

will, in future, be increasingly driven by more demanding customer requirements,
with greater emphasis being placed on value for money, personal fulfilment,
unique experiences, authenticity, emotional involvement and travel convenience

is projected to experience a doubling in the number of international arrivals over
the next 20 years to almost 1.6 billion

is being given increased weight and emphasis in the range of Government
policies aimed at national and regional development.

Tourism Policy Review Group 24
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1.1 A Global Industry
The phenomenal growth in tourism activity worldwide
marks the sector out as one of the most remarkable
economic and social phenomena of the past century.

A record 715 million international trips were made
worldwide in 2002 1 . Tourism receipts in 2001 generated
approximately 518 billion. International travel and tourism
contributes 3.7% to global Gross Domestic Product ( GDP) ,
while sustaining over 70 million jobs or 2.6% of the world s
employment 2 . The industry has an impressive record of
sustained growth with the number of international trips
increasing, on average, by 7% a year over the past 50 years.
Global revenues from tourism also grew consistently by 11%
annually in real terms up to 2001.

In 2001, Europeans accounted for 58% of international
arrivals ( or 403 million arrivals) which reflected a 4% % annual
growth rate in the 1990s. Within Europe, intra-regional travel
accounts for 350 million arrivals ( 87% of the total) , with
leisure/ holiday representing nearly two thirds of this number.
The Americas and Asia/ Pacific are the next largest source
markets for international travel, generating 124 million and
121 million trips per annum respectively. Despite an above
average rate of growth in the incidence of inter-continental
travel in recent years, 80% of all trips are intra-regional

reflecting the importance of close to home markets.
Tourism has not only seen significant growth but also a
continued diversification in geographic spread and in the
range of products and experiences on offer. Europe' s share
of worldwide tourism has been declining. Over the past
decade the Asia Pacific region and the former Eastern
European countries have been fast growing destinations.
Arrivals in Asia/ Pacific grew at an average rate of 7.2% per
annum, at a time when, overall, world tourism was growing
by 4.3% each year and European tourism by 3.6% .

Transatlantic travel is the largest inter-regional traffic flow
in the world. In 2001, 25 million Americans travelled east
and 20 million Europeans visited the Americas. The next
largest flow is between Europe and the Asia/ Pacific
region, with between 12 and 13 million visitors going
each way respectively.

Leisure, recreation or holiday travel accounts for some 60%
of international trips. However, throughout the 1990s,
international business travel grew at a faster rate than
leisure trips. Trips to visit family and friends or for religious
or health purposes, account for almost 25% of all travel.
While air travel and sea cruising are each fast growing
sectors, road transportation continues to be used by almost
half of all international travellers worldwide.

Figure 1.1 International Tourist Arrivals 1950 -2001 Figure 1.2 Share of Worldwide Arrivals by Global Region 2001

Source: World Tourism Organisation ( WTO) Source: WTO
Africa Middle East South Asia
Europe Americas East Asia/ Pacific

1950

800
(
million)

700
600
500
400
300
200
100
0
1960 1970 1980 1990 2000

Europe
Americas
Asia/ Pacific
Africa
Middle East Source: WTO

58%
17%

17%
4% 3%

1 According to World Tourism Organisation ( WTO) statistics. The WTO, based in Madrid, is an international governmental organisation that serves as a forum for tourism policy and issues. Its membership includes countries, territories and affiliate members from the public and private sectors.
2 Estimates from the World Travel and Tourism Council the Forum for business leaders in travel and tourism, , based in London.

5 25
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Tourism Policy Review Group
Despite the rapid growth in international travel, domestic
tourists outnumber international visitors in most developed
nations around the world. Accordingly, the domestic
market represents a very important component in the
viability of enterprises engaged in tourism. However, in
more developed economies, the rate of growth in
international travel tends to exceed that of domestic trips.

1.2 The Underlying Forces Driving Worldwide Tourism
Worldwide tourism growth has been driven by a number of
key factors, including economic wealth, mass communication,
information and communication technologies, socio-political
stability and availability of leisure time.

A strong underlying relationship exists between the
level of consumer disposable income and travel.
International tourism significantly outpaced the
growth of economic output ( GDP) between 1975
and 2000, growing on average 1.3 times faster, as
shown in Figure 1.3.

Increased leisure time, with more holiday
entitlements and flexible working conditions, has
stimulated a widespread desire for travel and
together with strong economic growth in
developed economies in recent decades has
generated the cash rich time poor population
segment seeking to maximise the use of available
recreational time.

A major driver of tourism growth has been the
increasing availability of affordable transportation,
especially air travel. Travel costs have fallen sharply
in real terms in recent decades at a time when
capacity and routes have dramatically increased.
Medium and long-haul air travel has become
significantly more affordable, while the low fare
airlines have revolutionised short-haul journeys
within North America, Europe and Australia.

The reduction in travel and border formalities ( e. g.
visa entry requirements, customs and currency
restrictions) has also contributed to the growth of
international travel.

Real GDP
Average 1975 -2000
Tourist Arrivals
Average 1975 -2000

Source: WTO/ International Monetary Fund ( IMF) Source: WTO/ International Monetary Fund ( IMF)
1975

% change over
previous year

8
6
4
2
0
-2
1980 1985 1990 1995 2000

Figure 1.3 Growth of GDP and International Tourist Arrivals

6 26
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7
The application of new information and
communication technologies has dramatically
broadened people s access to information and travel
opportunities. The result has been a transformation
in the way people plan and book travel. Online
travel sales, estimated at 55 billion in 2003, are
projected to almost double over the next two years.

The importance of a stable socio-political
environment for travel to grow is amply
demonstrated in the downturn in travel to
destinations affected by conflict and terrorism.
More recently, concerns on the part of travellers
about safety, security and health issues are
increasingly influencing travel patterns.

1.3 Key Trends in International Tourism and Travel
The international tourism and travel industry is a highly
dynamic sector of activity characterised by continuous
change. Significant changes in recent years include shifts
between markets, in customer profiles and preferences,
together with changes in the structure of the industry, its
management and the way it does business. The principal
customer trends to emerge, over the past decade or so,
have included:

shorter and more frequent trips
greater consumer use of modern information and
communication technologies

more experienced travellers with heightened quality
and value expectations

a trend towards later booking
mass marketing giving way to more individually
tailored holidays

growth of the older people share of the total market,
as this group now represents the wealthiest
segment of society in Europe, the US and Japan.

Sun holidays, city breaks and touring holidays together
account for almost 70% of all international holidays taken
by Europeans.

The way people make their holiday arrangements is also
changing. Internet use has had a major impact on travel
and the tourism industry. More than 6 in 10 US households
currently research their leisure travel online. In Europe low
fare air carriers have pioneered online booking for travel
and, also, for a wide range of travel-related services. While
Europe has some way to go before the Internet is as
significant a distribution channel as it is in the US, it has
already had a radical impact on consumer holiday decision-
making in all of Ireland s main markets and its influence is
continuing to grow strongly.

1.4 Recent Performance
Growth in international travel has stalled only twice in the
past 50 years -in 1982, following the oil crises, and in
2001. Weak demand due to economic conditions in the
early part of 2001, the outbreak of Foot and Mouth disease
in northern Europe, coupled with the impact of the terrorist
attacks of September 11th resulted in a drop of 0.6% in
tourism arrivals globally, with earnings falling by 5.2% .
However these global figures tend to understate the extent
of the severe downturn in travel experienced in the
Americas and to a lesser extent Europe, the world s top
destination and source markets. 27
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Tourism Policy Review Group
The September 11th terrorist attacks in the US resulted in
an unprecedented impact in terms of reduced demand for
leisure and business travel and accelerated changes already
underway in the structure of the travel and tourism
industry and the choice of type and location of holiday
travel. The industry, in many countries, experienced job
losses and business closures. The more lasting impact
included an increasing concern regarding safety and
security, a radical restructuring of the global airline industry,
changing patterns of travel and significant changes in how
destinations and products position are positioned in the
marketplace.

Results for 2002 indicated a slow recovery with
international arrivals worldwide increasing by over 3% to
reach a record 715 million. However, recovery has not been
universal. The war in Afghanistan, terrorist attacks on
tourists in a number of locations, fear of further terrorist
attacks and the anticipation of war in Iraq severely
dampened demand in 2002, at a time when low interest
rates were stimulating consumer spending. Trips tended to
be closer to home while uncertainty and heightened price

sensitivity encouraged later bookings. The business travel
sector continued to be severely depressed. Within the
airline industry, only low fare airlines recorded healthy
volume and profit growth, while sea cruise tourism
recovered largely on the basis of heavy discounting.

The position for 2003 is that soft economic conditions in
most of the main source markets, the conflict in Iraq,
terrorist attacks and the outbreaks of Severe Acute
Respiratory Syndrome ( SARS) , have combined to depress
demand for discretionary and business travel. This has been
reflected in a decline in international air travel and tour
operator holidays during the early months of the year.
Many airlines, tour operators and other tourism businesses
continue to issue profit warnings as the combined impact
of global events on tourism continues to threaten future
earnings. While the war in Iraq mainly affected forward
bookings and traffic flows on transatlantic, Middle East and
eastern Mediterranean routes, fears about the SARS
epidemic have had a significant impact on global travel,
especially to and from the Asia/ Pacific region.

International Tourist Arrivals Market Share Average
annual
( million) ( % ) growth ( % )
1990 1995 1999 2000 2001 1990 1995 2001 90-00 95-00

World 457.3 551.7 652.3 696.8 692.6 100 100 100 4.3 4.8
From:
Africa 11.3 13.1 15.6 15.8 16.3 2.5 2.4 2.4 3.4 3.8
Americas 96.2 111.8 130.0 130.6 123.9 21.0 20.3 17.9 3.1 3.2
East Asia and the Pacific 56.5 94.0 110.0 110.1 112.9 12.3 17.0 16.3 6.9 3.2
Europe 274.0 339.7 404.8 404.4 402.8 59.9 61.6 58.2 4.0 3.5
Middle East 8.1 8.3 11.5 12.4 12.4 1.8 1.5 1.8 4.5 8.4
South Asia 4.0 5.3 7.4 7.8 7.9 0.9 1.0 1.1 6.9 8.1
Origin not specified 3 7.3 -20.6 -26.9 15.5 16.4 1.6 -3.7 2.4

Same region 362.6 436.6 513.1 546.4 549.9 79.3 79.5 79.4 4.2 4.5
Other regions 79.7 99.8 123.5 134.8 126.2 17.4 18.1 18.2 5.4 6.2
( Data as collected by WTO September 2002)
3 Countries that could not be allocated to a specific region of origin. As information is derived from inbound tourism data this occurs when data on the country of origin is missing
or when a category such as other countries of the world is used grouping countries together that are not separately specified. .

Table 1.1 Outbound Tourism by Region of Origin 1990-2001

Source: WTO 28
28 Page 29 30
Some recovery is anticipated in bookings for leisure travel
for the remainder of the year, with the European market
likely to show greater buoyancy than North America,
provided that the threat of terrorism decreases and as fears
of the SARS virus continue to abate.

1.5 Future Prospects and Determinants of Growth
The short to medium term prospects for international
tourism may be summarised as follows:

a quick return to the buoyant market conditions of
2000 is unlikely. However, international arrivals
worldwide are forecast to continue to increase in
the immediate future, although at a slower rate of
growth than that experienced in the 1990s.
According to WTO projections, the number of
arrivals is expected to double over the next 20 years
to almost 1.6 billion, an outturn which, if achieved,
would be broadly in line with the rate of growth
experienced over the previous 20 years. The current
conditions and uncertainties caused by the
economic downturn will continue to depress
demand in the immediate future but the underlying
trends suggest a resurgence in demand in the
medium and longer term. Travel and tourism is
firmly established in the lifestyle and discretionary
spending pattern of the developed economies. The
market of experienced international travellers has
expanded greatly, and there is increasing potential,
in several important source markets such as China
and Central and Eastern Europe

travel recovery will lag somewhat behind an uneven
and slow economic recovery, particularly for
business travel. Economic recovery and a stable
geo-political environment are both inextricably
intertwined as major determinants of future
demand for travel and tourism. While worldwide
GDP is forecast to increase from 3% in 2002 to
3.2% in 2003 and 4% in 2004, according to IMF
estimates, consumer confidence is vulnerable and
wide areas of business are likely to continue to
retrench. Consumer spending is expected to slow
down even if interest rates remain low. Any
weakening in the US dollar, while good for the
global economy, has a dampening demand on
external travel, particularly transatlantic. Overall, as

long as the threat of terrorism and war persists, the
short-term prospects for intra-regional travel remain
better than for inter-continental travel

while leisure demand will continue to increase,
markets will become more competitive. The ageing
population in the developed world, especially within
Europe, presents significant new challenges and
opportunities for tourism, relating to changing
travel patterns, different customer needs and
demand for more customised products and services.
In addition, factors such as the increasing number
of single person households, changing work and
career patterns, an emphasis on personal well-being
and evolving value systems, will all influence the
volume, type, frequency and duration of leisure
trips in the future

the US as a source of international tourists has been
hardest hit by the threat of terrorism and will take
longest to recover. Asia/ Pacific is set to become the
fastest growing region for tourism with a decline in
the relative share of global tourism in Europe and
North America

the factors that determine demand for travel will
continue to change with greater emphasis being
placed on value for money, personal fulfilment,
unique experiences, authenticity, emotional
involvement and travel convenience. Security,
health and environmental issues, and increased
competition from new destinations and products,
will continue to influence demand patterns

greater consolidation within the industry,
particularly in the airline sector, and increased
integration along the tourism supply chain is
envisaged. Although liberalisation and deregulation
have radically altered the face of commercial
aviation over the past decade, the structure of the
airline industry is set to change further. The
traditional business model for full service network
airlines no longer appears to be sustainable with the
global airline industry cumulatively losing US$ 31
billion over the past two years. While growth in air
travel will continue to be a function of economic
growth, pricing and deregulation, the continuing
decline in fares is not guaranteed. The availability of
air services will change with low fare point-to-point
carriers predominating in the short haul markets

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Tourism Policy Review Group
and a rationalised structure of long haul services by
a more limited number of network airlines

the expansion of internet technology -applications,
functionality, and accessibility will continue to
revolutionise how travel businesses operate and
interface with a more knowledgeable, price and
value aware customer

effective marketing and communications will
continue to be important motivators of travel in the
future. Integrated marketing campaigns, meeting
specific customer needs, will become increasingly
powerful generators of discretionary travel in a
more competitive environment.

1.6 Tourism and Government Policies Internationally
As an increasingly important source of wealth-creation,
employment and foreign earnings from external and
domestic sources, Governments worldwide have put in
place a wide range of policies both direct and indirect
to support the development of their tourism industries.
Within these policies a number of key features and trends
are apparent:

an increasing emphasis on the sustainability of tourism
development in environmental and societal terms

closer linkages between tourism policy and other
policy areas including those dealing with national
economic development, regional development,
transport, arts and culture, sport, conservation and
environmental planning

greater involvement at local political and
community levels in the development and
implementation of policies relating to tourism

stronger industry associations taking increased
responsibility for developing networks and initiatives
to support their members and the industry and in
working with Government bodies

widespread initiatives by both Government bodies
and industry associations to strengthen the use of
information and communication technologies in
developing tourism

increasing focus on high standards of public health,
workplace conditions and general training.

In general, tourism policy internationally is being given
increased weight and emphasis in the range of
Government policies aimed at national and regional
development.

1.7 Overview/ Conclusions
In summary, while the nature and structure of international
tourism is undergoing fundamental change, the future
prospects remain highly promising and positive according
to the projections of the most authoritative sources,
including the WTO. As set out later in this Report, the Irish
tourism industry has demonstrated a strong record of
success, particularly over the past fifteen years, in attracting
visitors and gaining share in a number of important areas
of the tourism market. The challenge for the tourism
industry in Ireland over the next decade and beyond is to
build on that success and to respond effectively to the
changes underway in international tourism as set out in this
Chapter. Chief among these changes are the greater
competition between destinations and changing customer
profiles in economic status, age, discernment and value-
consciousness. 30
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12
Ireland s Tourism Industry: Economic Contribution,
Structure and Policy

Irish tourism is a major economic sector
of enterprise, and of national and
regional wealth creation. The industry
at present generates 4 billion in foreign
revenue earnings, supports 140,000
jobs and is by far the largest, Irish-owned
internationally-traded sector of the
Irish economy.

Tourism Policy Review Group
2 chapter two 32
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14
Summary of Main Conclusions
Irish tourism in a major sector of successful enterprise and a significant
instrument of national and regional economic and social development

Six million overseas visitors spent 4 billion in Ireland in 2002, while Irish people
took close to six million trips in the country, spending almost 1 billion.

To put the annual tourism receipts of 4 billion from overseas visitors in
perspective, it is equivalent to

more than 50% of the total value of exports by Irish-owned manufacturing
industry, or

more than twice the value of exports of Irish-owned internationally-traded
services.

The Irish tourism industry embraces a wide range of diverse small and medium
sized enterprises that are predominantly Irish-owned.

The industry supports some 140,000 jobs or one in 12 of all jobs in the
economy. Employment grew in the sector by more than 70% between 1990
and 2002 a rate of growth considerably above the 50% % growth in
employment generally in the economy over that period.

Tourism generates as much as 2.2 billion in tax receipts and contributes 4.4%
of GNP.

The public and private sectors play joint and complementary roles in the
development of tourism in Ireland with organisational structures in place to
promote partnership, particularly in relation to marketing.

Total capital investment in tourism during the 1990s amounted to 4.3 billion.
The direct Exchequer spend on tourism amounts to 107 million in 2003, of
which approximately 80 million is related to marketing and associated costs,
while the industry spend on marketing was of the order of 134 million in 2001.

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2.1 Tourism' s Contribution to Economic, Social and Regional Development
Tourism is a major and largely Irish-owned sector of enterprise,
and of national and regional wealth creation delivering the
following very significant benefits to the economy:

expenditure ( including receipts of over 700
million paid to Irish air and sea carriers) by the 6
million overseas visitors to Ireland in 2002
amounted to almost 4 billion. The equivalent
figure in 1990 was approximately 1.5 billion. In
real terms, when inflation is taken into account, this
represents a doubling of revenue since 1990.
Domestic expenditure amounted to approximately
1 billion in 2002, making tourism in total a major
5 billion turnover industry

to put the 2002 tourism receipts of 4 billion from
overseas visitors in context, it is equivalent to

more than 50% of the total value of exports by
Irish-owned manufacturing industry, or

more than twice the value of exports of Irish-
owned internationally-traded services.

Tourism goods have low import content in
comparison to other exports

tourism supported approximately 140,000 jobs in
2002 up from 82,000 jobs in 1990. . With an
estimated 1,765,000 people at work in Ireland in
2002, tourism spend supported 8% of
employment, equivalent to one in 12 of all jobs in
the economy. The equivalent proportion in 1990
was 7% . The 70% growth in jobs in the sector was
considerably above the 50% growth in
employment generally in the economy
notwithstanding that general employment growth
was at unprecedented high levels

it is estimated that each million euro of overseas
tourism expenditure supports 30 jobs and every
million euro of domestic tourism spend supports
23 jobs

it is estimated that, in 2002, the Government
earned as much as 2.2 billion through taxation of
tourism expenditure in VAT, excise duties and
income tax receipts 1.9 billion of which came
from foreign tourists

tourism made a direct contribution of 4.4% to GNP
in 2002

tourism is a major instrument of regional
development. Many tourism enterprises are
situated in areas where other employment
options are limited

local communities benefit from investment in
facilities for tourists such as leisure and sporting
facilities and in associated infrastructure including
access transport and roads

a vibrant tourism industry contributes to the
viability and sustainability of a wide range of local
enterprises

tourism promotes an enhanced awareness and
positive appreciation of local traditions, way of life
and cultural facilities

Figure 2.1 Tourism Revenue
1990 & 2002 ( m)
Figure 2.2 Overseas Visitor Numbers
1990 & 2002 ( m)

Source: Fáilte Ireland
1,446
1990 2002 1990 2002

3,985
3.1
5.9 35
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Tourism Policy Review Group
2.2 The Structure of the Tourism Industry
The Commercial Sector
Tourism is not easy to categorise as a readily definable
sector within the economy. It embraces a wide range of
different activities in both the private and public sectors.
It comprises thousands of individual businesses. Indicative
of that fact are the some 10,000 members in the Regional
Tourism Authorities ( RTAs) . The tourism industry in Ireland
comprises predominantly Irish-owned, small and medium
sized enterprises ( SMEs) . Table 2.1 contains estimates of the
number of establishments/ operations in certain key sectors.

There is also an important range of State-owned facilities
including visitor information centres, museums and
heritage attractions, national monuments and national
parks. A limited number of large commercial enterprises,
including publicly listed companies and State-owned
corporations, are important providers of transport and
accommodation. A number of foreign-owned air and sea
carriers also provide transport links to and from Ireland.
Most foreign involvement in hotels is through use of
franchise and management contract arrangements under
leading international brands. There has been a trend for
Irish-owned family groups to increase their share of the
stock of hotels over recent years.

Table 2.2 describes the tourism related enterprises within
the main sub-sectors of the industry. The right hand
column of the table indicates the ownership structure of
the industry. The predominance of SMEs is very apparent.

Tourism Industry Representative Bodies
( The Irish Tourist Industry Confederation)

Over the past 20 years the Irish tourist industry has formed
into a number of sectoral representative groupings, many
of which have come together under an umbrella
representative body -the Irish Tourist Industry
Confederation ( ITIC) . Established in 1984, ITIC is the
national representative organisation for the tourism sector
encompassing membership from both the public and
private sectors. Current membership includes the Irish
Hotels Federation, the key B& B Groups ( Town and Country
Homes Association, Irish Farm Holidays Association) , the
Irish Tour Operators Association, Restaurants Association of
Ireland, Coach Tourism and Transport Council of Ireland,
Car Rental Council of Ireland, Irish Boat Rental Association,
Irish Caravan Council, MEI ( Marketing English in Ireland) -
RELSA and a number of other interests as well as air and sea
carriers. The purpose of the Confederation is to act as a
single voice for tourism, to address strategic issues critical
to the success of the sector, to influence the
regulatory/ legislative environment and to influence
Government and EU tourism policies. The Confederation
pursues its objectives through a strategy of influencing
policies that impact on tourism, through professional case
making and by seeking industry representation on State
bodies which deal with tourism. However, the diversified
nature of the sector and the preponderance of SMEs have
challenged the ability of the industry to highlight at
national level in a fully effective way, and to highlight, the
scale of its importance in economic and social terms.

Table 2.1 Number of Establishments/ Operations by Sector 1996-2002

Source: Fáilte Ireland
Sector 1996 1998 1999 2000 2001 2002
Hotels 716 775 826 844 854 860
Guesthouses 356 427 475 481 495 488
Restaurants 1,619 1,890 1,987 2,120 2,129 2,115
Licensed premises 8,694 n/ a 8,071 8,100 8,110 8,000
Tourism Services & Attractions 2,012 n/ a 2,680 n/ a 3,074 3,018 36
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The Public Sector
In addition to its role in helping to develop the tourism
sector through direct support for product development,
marketing and training/ education, the public sector is also
responsible for a number of activities that are essential to
the development of tourism. These include:

the provision of infrastructure and services, in
particular those relating to access transport, roads
and telecommunications

the protection and maintenance of natural, cultural
and heritage resources

the regulation of building and site development and
environmental protection

the regulation of business and the labour market
the determination of fiscal policy.
Responsibility for the formulation of national tourism
policies rests with the Department of Arts, Sport and
Tourism. Its goal is to facilitate the continued development
of an economic and environmentally sustainable and
spatially balanced tourism sector, through formulating,
monitoring and reviewing a range of supporting policies
and programmes, particularly within the framework of the
National Development Plan and North/ South co-operation.
Policy is implemented by State-sponsored bodies and
executive agencies, operating under the aegis of the
Department. The principal State Agencies are Fáilte Ireland,
Tourism Ireland, Shannon Development and the Regional
Tourism Authorities.

Table 2.2 Main Sub-sectors, Services and Structure of Tourism Industry
Source: Fáilte Ireland
Sub-sector Services Structure
Transport Airlines & Shipping Companies, Air & Sea
Ports, Internal Transport Bus, Rail Services,
Car Hire, Coach Tours

Mainly public and larger companies, except
in case of coach and car hire

Accommodation Hotels; Guesthouses; B& B s; Self-catering;
Hostels; Caravan & Camping Parks;
University Campus; Host Homes

Mainly SMEs although larger hotel groups
are growing in number

Food Accommodation providers; Restaurants;
Pubs; Fast Food Outlets; Shops
SMEs apart from larger hotel groups

Facilities/ Amenities Historical sites; Houses; Gardens; Museums;
Art Galleries; Theatres; Entertainment; Pubs
SMEs & State enterprises

Activities Golf; Walking; Angling; Cycling; Cabin
Cruising; Equestrian Activities; Events; Sailing;
Other Water Based Pursuits; Shopping;
Language Schools and Genealogy

SMEs almost exclusively except in the case of
cabin cruising

Basic Services Petrol Stations; Banking; Communications;
Tourist Information; Other Retail Outlets
Mainly SMEs but including major companies
in banking services and petrol distribution 37
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Tourism Policy Review Group
The functions of the two principal State agencies involved
in tourism at national level are as follows:

National Tourism Development Authority
Fáilte Ireland : Established by legislation in May
2003, the new agency s mission is to foster
sustainable and competitive tourism development
by working in partnership with the industry and
State bodies to achieve world-class standards of
excellence in the products, services and marketing
of the sector, thereby contributing to wealth
creation and employment in the economy of Ireland
and its regions. The new agency is intended to
streamline the State s support services to tourism by
incorporating the services and programmes
previously carried out by Bord Fáilte and CERT.
Fáilte Ireland has responsibility for supporting the
tourism industry in the areas of:

product development
marketing of domestic tourism on the island
of Ireland
training and education
research and strategic planning
niche/ specialist product marketing
and promotions
implementation of special initiatives to
attract international sports events to Ireland
and to support the marketing of festivals and
cultural events.

It also has statutory functions for registration and
grading of certain tourism accommodation, the co-
ordination of activities of the Regional Tourism
Authorities and the promotion of sustainable
tourism. In carrying out these functions, Fáilte
Ireland provides a range of supports to the tourism
industry, including those that support the building
of business capability, improve the quality of
product which the industry offers and enhance its
competitiveness.

Tourism Ireland: As part of the Agreement reached
in the Multi-Party Negotiations concluded in Belfast
in April 1998, tourism was designated an area for
co-operation under the North/ South Ministerial
Council. In December 1998, the parties to the
Agreement decided that a publicly-owned limited
company would be established jointly by the
Northern Ireland Tourist Board ( NITB) and the then

Bord Fáilte to carry out functions aimed at
promoting tourism to the island of Ireland. Tourism
Ireland was incorporated in December 2000 and
has taken over responsibility with effect from the
2002 season, for the overseas marketing of the
island of Ireland as a tourist destination.
In exercising its overseas marketing activities,
Tourism Ireland has taken on a number of functions
including ownership and management of the
tourism brand for Ireland, strategic all-island
destination marketing in all markets outside the
island of Ireland and responsibility for the overseas
office network. Tourism Ireland is also responsible
for the international delivery of product/ regional
marketing programmes on behalf of both Fáilte
Ireland and NITB. Appendix D sets out a brief
outline on Tourism Policy on the Island of Ireland .

In addition to Fáilte Ireland and Tourism Ireland, a
number of other State Bodies as set out in Appendix E ,
have functions associated with the development of
tourism. The number and range of such bodies has given
rise to some concerns about the risk of overlap and
duplication in the delivery and efficiency of services.
While there has been a recent major restructuring of
bodies at national level, regional and local structures
have remained largely unchanged.

Tourism Marketing Partnerships
While the concept of partnership has existed within the
tourism industry for many years, it is only in recent years
that formalised structures have been put in place to
facilitate the mutual engagement of the private and public
sectors in the design and implementation of tourism
marketing and development plans and programmes. In the
mid 1990s, a new industry-led joint marketing body, the
Overseas Tourism Marketing Initiative ( OTMI) , was formed
and operated on an all-island basis. The tourist boards from
both Northern Ireland and the South were members of
OTMI and its board included industry representation from
both jurisdictions. In 1995, the island of Ireland theme was
used to advertise Ireland. The use of a branded approach to
marketing Ireland emerged during this time, culminating in
the development of Tourism Brand Ireland ( TBI) . TBI was
adopted by the tourism industry in both jurisdictions and
by OTMI. In 1996, for the first time, an all-island branded
advertising campaign was used to promote holidays to
Ireland in the four main markets i. e. US, Britain, France and
Germany. The Tourism Marketing Partnership ( TMP) 38
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structure has succeeded the OTMI to facilitate, in a formal
way, co-operation between the public and private sectors in
formulating marketing policies and plans. There is an all-
Island TMP group under the aegis of Tourism Ireland and
individual TMPs in the South and Northern Ireland
operating in association with the tourist boards.

2.3 Tourism Policy
The Components of Tourism Policy
Government policy for the development of the tourism
sector in Ireland has focused on supporting sustainable
growth in visitor expenditure with an emphasis on a wider
regional and seasonal spread of business.

The Agreed Programme for Government 2002, recognises
that the tourism industry will continue to be a vital
industry requiring sustained support and investment in the
coming years . The Programme sets out 10 priority
measures relating to marketing, access transport, product
development and standards, the role of local authorities
and environmental management, the creation of a new
National Tourism Development Authority, and the
construction of a state of the art National Conference
Centre. The Government regards the maintenance of top
class standards and services, and a continued focus by the
industry on value for money, as imperative for the
continuing success of the tourism industry.

Key policy measures in the recent past have supported:
product development: principally through use
of EU funded Tourism and Regional Operational
Programmes and selective fiscal incentives
for investment

overseas marketing: through annual funding from
the Exchequer, together with funding under earlier
EU Operational Programmes for Tourism

human resource development/ training: primarily
focused on the provision of educational, basic
training and recruitment services, in the past largely
funded from EU sources.

Evolution and Trends in Irish Tourism Policy 1980 -2002
The Government White Paper on Tourism Policy 1985 was the
first comprehensive statement on tourism policy in Ireland
and set the following objectives:

To optimise the economic and social benefits to Ireland of the
promotion and development of tourism both to and within the
country consistent with ensuring an acceptable economic rate
of return on the resources employed and taking account of
tourism' s potential for job creation; the quality of life and
development of the community; the enhancement and
preservation of the nation' s cultural heritage; the conservation
of the physical resources of the country; and tourism' s
contribution to regional development.

The White Paper gave rise to a response from the key
industry representative groups. The industry recommended
ambitious targets for the sector which were subsequently
adopted by Government. Since the late eighties, the prime
objectives of national tourism policy were clearly articulated
in successive national partnership development plans, and
within the EU Community Support Framework for Ireland.
Key developments included are set out below.

The Programme for National Recovery 1988 -1993
identified tourism as a major instrument of national
and regional economic and social development and
set out a number of measures to encourage
investment in tourism, including through the
Business Expansion Scheme ( BES) . Initiatives were
also taken at that time to open the airline industry
in Ireland to competition with far-reaching
beneficial consequences for airfares and tourism
numbers subsequently.

The Operational Programme for Tourism 1989 -1993 ,
with EU grant support, resulted in some 980
million being invested in tourism over the period of
the Programme. This was more than the total
investment over the previous 20 years.

The Tourism Task Force 1992 , appointed by
Government, made a number of recommendations
to support the development of the sector including
the liberalisation of the Shannon stop requirement,
greater co-operation between industry and
Government and special initiatives to address
seasonality and product development. 39
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Tourism Policy Review Group
The National Development Plan 1994 -1999 set out
ambitious growth targets for the industry. Ireland s
competitiveness improved during this period with
economic buoyancy, falling inflation, favourable
currency developments, the further liberalisation of
air service regulations, and an improving political
situation in Northern Ireland.

The Operational Programme for Tourism 1994 -1999 ,
with support from the EU, introduced a number of
measures designed to extend the tourism season, to
secure large scale anchor projects, to develop
cultural and heritage projects, to encourage co-
operative marketing, to build marketing skills in
tourism enterprises and to improve training and
human resource development within the industry.

Bord Fáilte s role was re-defined, following a review
carried out for the Government by consultants
A. D. Little in 1995. The new emphasis was on
international marketing, product development and
strategic research, with the outsourcing of non-core
functions. This in turn led to the development and
launch of the Tourism Brand Ireland project, under
which Ireland was marketed internationally in line
with modern brand practice.

Overseas Tourism Marketing Initiative 1995 was the
first ever all-island destination marketing campaign
structured on a public/ private sector partnership
basis, with funding from the Operational
Programme for Tourism, the public sector North
and South and commercial enterprises.

Tourism Ireland, the jointly funded all-island tourism
destination marketing organisation, was
incorporated in December 2000 as a co-operation
body under the terms of the Agreement reached in
the Multi-Party negotiations concluded in Belfast in
April 1998.

The National Development Plan 2000 -2006 ( NDP)
shifted the prime tourism policy objective from job
creation to sustained foreign revenue earnings with
a growing emphasis on sustainable and spatially
balanced development, reflecting the need to
ensure the benefits are distributed throughout the
country while alleviating any negative
environmental impacts. The NDP included provision
for the first ever multi-annual Tourism Marketing

Fund, with a budget of 190 million over the
period of the plan.

The Tourism Product Development Scheme 2000 -
2006, funded under the two Regional Operational
Programmes, was established with a total budget
of 130 million, including 55m in EU funding,
to support a range of new product developments,
with the emphasis on regional spread, cluster
development, specialist niche market products and
environmental sustainability.

2.4 Industry, Government and European Union Expenditure on Tourism
Capital Investment
Led by the private sector and assisted by EU and Exchequer
funding, spending on tourism-related capital projects
increased substantially during the 1990s. Total capital
spending on physical investment in Irish tourism-related
projects amounted to 4.3 billion over the years 1989 to
1999, according to estimates prepared by the economic
consultants Fitzpatrick Associates. The scale of tourism
investment in physical assets on an annual basis is set out
in Table 2.3. 40
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Exchequer Expenditure
The current direct annual Exchequer spend on tourism
through the Vote of the Department of Arts, Sport and
Tourism is budgeted at 107 million for 2003.
Approximately 80 million of this budget relates to general
marketing activities, including the administrative costs of
the key Tourism State Agencies. Details of expenditure over

the period 1997 to 2003, in current terms, are set out in
Table 2.4. The substantial increase in Exchequer funding
from 2000 onwards took into account the scaling down in
EU funding after completion of the Operational Programme
for Tourism, 1994 -1999.

Table 2.3 Capital Investment in Irish Tourism 1989-1999 ( m)
Source: Fitzpatrick Associates 1 Investment unallocated by year in 1998 and 1999
Year EU/ International Fund for Ireland Private Sector Exchequer Total
1989 1 105 22 128
1990 14 135 50 198
1991 34 185 76 296
1992 44 193 79 316
1993 41 207 69 316
1994 29 137 42 208
1995 22 151 47 220
1996 34 274 89 397
1997 70 368 240 678
1998 44 532 196 772
1999 31 420 164 615
Other 1 0 91 84 175
Investment 1989-1999 364 2,798 1,156 4,319
% Total 1989-1999 8% 65% 27% 100%

Source: Department of Arts, Sports and Tourism
1997 m 1998 m 1999 m 2000 m 2001 m 2002 m 2003 2 m
Bord Fáilte 33.3 44.8 46.7 57.6 87.0 51.1 46.4
CERT 4.2 4.4 15.0 19.2 21.2 21.0 20.6
National Tourism Development Authority -Fáilte Ireland ------0.6
Tourism Ireland ----1.7 34.0 38.6
Shannon Development 1.3 1.1 2.3 1.2 0.9 0.9 0.9
Total 38.8 50.3 64.0 78.0 110.8 107.0 107.1

2 2003 Estimates provisions -the establishment of Fáilte Ireland in May 2003 will impact on the outturn for the year by Agency

Table 2.4 Tourism Agency Funding from Exchequer 41
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Tourism Policy Review Group
European Union Investment
EU investment support for tourism under the Operational
Programme for Tourism, 1994 -1999 amounted to
approximately 431 million, details of which are set out in
Table 2.5.

Under the current EU Community Support Framework,
2000 -2006, EU co-funding for tourism is confined to the
Tourism Product Development Measure under the two
Regional Operational Programmes. By mid-2003 no grants
had been allocated to specific projects although
consideration of applications, under an open bid process,
had been well advanced. The Product Development
Scheme provides for 55 million in EU funding under the
European Regional Development Fund over the life of the
Programme.

Industry Investment in Marketing
The ITIC Marketing Expenditure Survey of February 2002
estimated that the Irish tourist industry spent 134 million
on marketing in 2001. The industry spent a total of 35
million on advertising, a further 38 million on promotional
campaigns and brochures with the balance of expenditure
attributed to marketing staff and associated overheads.

2.5 Overview/ Conclusions
Tourism is a major sector of economic and social
development in Ireland. Employment grew in the sector by
more than 70% between 1990 and 2002 a rate of
growth considerably above the 50% growth in
employment generally in the economy over the same
period notwithstanding that general employment growth
was at unprecedented high levels.

The structure of the Irish tourism industry is predominantly
that of Irish-owned small and medium-sized enterprises
( SMEs) in hotels, guesthouses, restaurants, licensed
premises and tourism services and attractions. The industry
has a well-structured representative system that works well
with Government Departments and State agencies in a
generally productive private-public partnership to promote
the development of the industry.

Government involvement in the development of tourism
has been of long-standing duration reflecting the
importance of the industry to national and regional
development and the market failures ( ie. the likely returns
not justifying private sector investment) intrinsic to a highly-
dispersed, small scale industry operating in a sophisticated
internationally-competing services sector. Today, Irish
tourism policy is focused on supporting sustainable growth
in visitor expenditure, with an emphasis on a wider regional
and seasonal spread of business. The fundamental
components of policy encompass:

a Government Department ( the Department of Arts,
Sport and Tourism) which represents tourism within the
general Government decision-making process

Table 2.5 EU Investment in Tourism 1994-2001

Source: Department of Tourism, Culture and Sport
EU Funding 1994 m 1995 m 1996 m 1997 m 1998 m 1999 m 2000 m 2001 m Total
Product Development 6 18 29 47 44 41 46 22 252
Marketing 5 11 13 12 11 11 8 -72
Training 15 16 16 18 19 20 4 -107
Total 26 45 57 76 74 72 58 22 431 42
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a number of Tourism State Agencies which have
recently been restructured to focus on the overseas
marketing of the island of Ireland and the development
of the sector

a strong regional organisational structure for the
promotion of tourism exercised through the Tourism
State Agencies, the Regional Tourism Authorities and
Shannon Development, County Tourism Committees,
Product Development Management Boards, County
Enterprise Boards and LEADER Groups

a number of evolving partnership arrangements
between the Tourism State Agencies and private sector
representatives of the industry

the periodic statement and re-statement of the vision,
targets and objectives guiding tourism development in
Ireland by the Department and the State Agencies
which operate under its aegis

a range of State fiscal, financial and advisory supports
both Exchequer and EU funded -for the promotion of
tourism operating generally, but not exclusively, under
the aegis of the Department of Tourism, Culture and Sport.

The first comprehensive statement on tourism policy in
Ireland was set out in a Government White Paper in 1985.
Government policy statements have gone through a
number of iterations since then in response to changing
national and international circumstances and the
underlying organisational structures have evolved in
keeping with these changes. This period of more structured
policy development and implementation has coincided
with a substantive take-off in the development of tourism in
Ireland. A number of factors underlie the expansion of
tourism here, including a major international increase in
demand driven by the rising real income levels in many
parts of the world, the falling cost of communications and
transportation and currency developments favourable to
Irish tourism. But it is also reasonable to conclude that
improvements in policy formulation and implementation in
Ireland played their part, as did the entrepreneurship of an
Irish-owned industry rooted in the natural and built
environment, and in the culture and people of Ireland. 43
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Tourism Policy Review Group
26
Ireland s Tourism Industry: Overview of Performance
1990 -2002

Visitor numbers to Ireland and tourism
receipts throughout the 1990s grew well
ahead of global trends, benefiting all
regions of the country. Irish tourism gained
market share in most markets in which it
competes. While visitor experience
generally has consistently met or exceeded
expectations for over 90% of visitors, the
perception of good value for money has
fallen significantly in recent years.

3 chapter three 46
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Tourism Policy Review Group
Summary of Main Conclusions
Visitor numbers to Ireland grew well ahead of global trends throughout the
1990s, increasing by an average of over 7% each year compared with a
corresponding world figure of 4.3% .

In terms of average annual tourism receipts, Ireland' s performance ( 5.8% ) is also
ahead of European ( 4.4% ) and global ( 5.3% ) growth rates over the period
1990-2001.

The best performing source markets for Irish tourism have been the US and
Britain while performance from Germany and France was below average.

Travel to Ireland by those whose main purpose for visiting was a holiday has
grown slightly ahead of the trend in overall visitor numbers.

Irish tourism has increased its market share of visitors from the US, but has been
losing market share from Germany and France and has seen a decline latterly in
its share of an expanding British market.

All regions of Ireland have benefited from the growth of Irish tourism in recent
years, with Dublin and the South West benefiting most while Shannon, the West
and the North West regions have recorded the lowest growth rates.

Domestic tourism remains a bedrock for the Irish tourism industry contributing
almost half of all visitor numbers seeking accommodation in 2002 and
representing a fifth of the overall revenue generated by tourism.

Survey analysis shows that the core tourism appeal of Ireland is characterised by
people, place and pace .

The holiday experience of visitors to Ireland has met or exceeded expectations in
the case of over 90% of visitors.

There has been a significant drop in the perception of good value for money
among visitors in recent years. 48
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3.1 Tourism Performance Visitor Numbers and Revenue
Overall Performance 1990-2002
Visitor numbers to Ireland grew well ahead of global trends
throughout the 1990s, increasing by 7.3% per annum from
1990 to 2000. This compared with a world annual average
increase of 4.3% over the corresponding period. Because of
Foot and Mouth disease and the impact of the terrorist
atrocities of September 11th, Ireland s relative performance
worsened somewhat in 2001. Table 3.1 illustrates
comparative trends, taking the latest year for which
estimates are available.

Tourism receipts in WTO comparative data are measured in
US dollars and, therefore, reflect exchange rate
movements. In terms of tourism receipts, Ireland' s
performance is ahead of European and global growth rates.
In local currency, Ireland s revenue earnings have grown
ahead of inflation at an annual rate of 9.5% % for the
period 1990 to 2001. As set out in Table 3.2, the increase
in visitor numbers has been the main stimulus to revenue
growth while per capita and per diem visitor spend have
increased more slowly one of the contributing factors
being the significant growth in short breaks in Dublin.

Country of Origin
Total visitor numbers to Ireland increased at an annual
average rate of 5.5% over the period 1990 to 2002. The
British market matched the overall growth rate over the
twelve year period and growth from Mainland European
markets other than Germany and France was above
average. North American visitor numbers also grew by
5.5% per annum to 2002, having achieved a 9% annual
average growth rate up to 2000 prior to the outbreak of
Foot and Mouth disease and the impact of September
11th. German and French growth was below average for
the period, at 4.1% and 3.5% , respectively. The details are
set out in Tables 3.2 and 3.3.

Table 3.1 Average Annual Growth ( % ) in Overseas Visitor
Numbers and Receipts 1990-2001

Source: Fáilte Ireland
Visitor Numbers Tourism Receipts
World 3.8% 5.3%
Europe 3.2% 4.4%
Northern Europe 3.4% 2.3%
Ireland 6.1% 5.9%

Table 3.2 Annual Average Trends in Tourism Performance ( % Change)
Source: Fáilte Ireland
Total Revenue Tourism Visitor Numbers Per capita spend ( per visit) Per diem visitor spend
2002 v 1990 + 9.8% + 5.5% + 4.0% + 3.3%
1996 v 1990 + 10.5% + 7.1% + 3.2% + 3.4%
2002 v 1996 + 9.0% + 4.0% + 4.8% + 3.2% 49
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Tourism Policy Review Group
Overall tourism receipts are influenced by variations in the
market mix. For example, an above average growth in
visitors from the American market would tend to drive up
average revenue earnings because these visitors generally
stay longer, travel more within Ireland and spend more
than other visitors. Figure 3.1 shows the share of visitor
numbers and revenue attributable to each major market
source in 2002.

Source: Fáilte Ireland

000 Visitors
1990 1995 2000 2001 2002

Britain 1,785 2,285 3,428 3,340 3,452

Table 3.3 Visitor Numbers and Foreign Revenue Earnings 1990-2002

North America
Other Areas
Mainland Europe
Britain

Source: Fáilte Ireland

Figure 3.1 Share of Visitor Numbers and Revenue
2002 Share of Visitors -5.9 million

North America
Other Areas
Mainland Europe
Britain

2002 Share of Revenue - 4 billion
59% 42%
23% 23%

4% 7%
14%
28% 50
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Britain provides the largest number of visitors ( 59% ) and
share of revenue ( 42% ) . The share of revenue accounted
for by overseas visitors, other than from Britain, is larger
than their share of visitor numbers.

Table 3.4 shows that North American visitors have a
consistently very high level of per capita spend in
comparison with Britain and Mainland Europe. As a
consequence any downturn in the American market has a
disproportionate effect on the overall revenue stream.

Purpose of Visit
In examining visitor flows, it is relevant to distinguish
between discretionary and non-discretionary travel. Table
3.5 shows that travel to Ireland by those whose main
purpose for visiting was for a holiday has grown slightly
ahead of the trend in overall visitor numbers.

Total holiday visits peaked in 2000 at 2.5 million, but
slipped back to 2.4 million in 2002 ( the second highest
level on record) . The highest growth rate over the decade
was attributable to business travel, undoubtedly fuelled by
strong economic growth in Ireland. In contrast, the lowest
increase was evident in the numbers visiting friends and
relatives reflecting, perhaps, the fall-off in emigration in
the 1990s.

Overseas Holiday Visitors
Despite the problems encountered in 2001 and 2002,
overseas holiday visitor numbers grew by an average of
more than 6% per annum over the 12 years from 1990.
Holidaymakers from Britain recorded the strongest
growth at 8.3% . North American holiday visitors grew by
9% per annum up to the record performance in 2000.
However, following the setbacks in 2001 and 2002, the
annual average growth rate dropped below 6% . Holiday
visitors from Mainland Europe grew by almost 4% per
annum since 1990 with the major markets, Germany and
France, performing below average at 2.5% % per annum
for Germany and France registering a reduction of 1%
per annum.

Table 3.6 sets out the growth in overseas holiday visitor
numbers, broken down between key source markets.

Table 3.4 Overseas Visitor Spend per Capita ( ) 1990-2002
Source: CSO/ Fáilte Ireland
1990 1995 2000 2001 2002
Britain 237 279 317 362 372
Mainland Europe 425 447 506 610 629
North America 477 545 652 795 840
Other Areas 483 601 684 801 933
Total Overseas 326 386 434 505 522

Table 3.5 Growth Rates in Visitor Numbers by Purpose of Visit
2000 v 1990 2002 v 1990
Total Visitors + 7.2% + 5.5%

Holiday ( main purpose of visit) + 8.0% + 6.3%
Business + 9.8% + 7.5%
Visiting Friends/ Relatives + 5.1% + 4.8%

Average per annum growth rate %

Source: Fáilte Ireland 51
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32
Tourism Policy Review Group
Overall growth in the absolute number of British
holidaymakers to Ireland belies significant changes in the
pattern of demand, within that market, that have had a
disproportionate impact on the nature of tourism within
Ireland, particularly in terms of product usage and
regionality. The key changes are set out below.

British holidays of 1 to 5 nights duration increased
by 19% per annum in the 10 years since 1992
when they accounted for 1 in 5 holidays. Today
they account for 56% of all British holidays to
Ireland. Holidays of 6 plus nights have increased by
less than 2% per annum over the same period.

The number of British holiday visitors not using a
car in Ireland has grown by 18% per annum in the
past decade while those using a car, either brought
or hired, have only grown by 1% per annum.

Visits to Dublin increased at double the rate of
overall British holiday visitors over the 10 year
period ( 13% per annum compared to 7% per
annum overall) . They have increased more than
four-fold since 1996 and account for more than half
( 52% ) of the total increase in British holiday visits
since 1996.

British holiday arrivals by air have grown by 17%
per annum over the past 6 years while arrivals by
sea have declined.

Within the holiday segment, several other trends of
note were:

a growth in short-stays, mainly in Dublin
a decline in activity holidays ( e. g. angling, cycling,
hill-walking)

strong growth in conference and associated travel
up to and including 2000, followed by a severe
drop subsequently

significant growth in the adult English language
learning segment.

Total promotable segments defined as holiday, , conference,
incentive 1 and language learning visitors amounted to
2.68 million in 2002, having peaked at 2.8 million in 2000.
Within the promotable category, the greatest growth has
occurred in Dublin city breaks. This segment increased from
95,000 in 1996 to 372,000 by 2002 and contributed
significantly to overall growth. If Dublin city breaks are
excluded, there is no increase in the promotable segments
in the 1996 to 2002 period.

Table 3.6 Overseas Holiday Visitor Numbers 1990-2002
Source: Fáilte Ireland
1990 000s 1993 000s 1997 000s 2000 000s 2001 000s 2002 000s Annual Average Growth ( % )
1990-2002

Britain 466 575 925 1,123 1,112 1,215 8.3

North America 368 262 475 647 563 521 5.7
Mainland Europe 379 535 561 618 571 581 3.6
Germany 112 169 179 172 150 151 2.5
France 127 143 117 116 119 113 -1
Other Europe 140 223 265 330 302 317 7
Other Areas 61 64 111 145 144 127 6.3
Total 1,274 1,436 2,072 2,533 2,390 2,444 6.3

1 Incentive travel refers to reward trips offered by companies to staff and family members for work performance 52
52 Page 53 54
33
Market Share Analysis and Trends
Not only has the number of visitors to Ireland increased in
recent years but, more importantly, the share of global
tourism that Ireland now attracts is higher than in the past
and it has outperformed most of its competitor
destinations. For example, Ireland has:

captured 14% of all international tourist arrivals ( 43
million) in Northern Europe ( by 2002) , up from an
11% share ten years previously

attracted 7% of all US visitors to Europe, up from
5% in the early 1990s

attracted 19% of Australians visiting Europe, almost
a doubling of share in a decade

maintained similar levels of market share of
outbound travel to Northern Europe from Italy, the
Netherlands and the Nordic countries

seen a decline latterly in its share of an expanding
British market to Europe, now at 7.2% ( down from
8% in 1999)

lost share, compared to the mid-nineties, of the
German outbound market to Northern Europe and
has been losing share latterly of French outbound
travel to Northern Europe.

2 Real growth based on 2002 prices

Market share trends must be seen in the context where it is
likely that the worsening economic environment in many of
the major source markets increases price sensitivity among
consumers. All overseas tourist expenditure in Ireland is, in
effect, equivalent to an export and, as such, is highly
sensitive to international competition.

Regional Destination within Ireland
Table 3.8 shows that all regions have benefited from the
growth of tourism in recent years. The best performing
regions have been Dublin fuelled by the growth in urban
and short break markets, and the South West because of
its strong tourism base and international reputation. The
weakest regions in terms of growth were the North West,
West and Shannon.

Analysis of the regional destination of visitors shows
contrasting fortunes for Dublin in trends between the
overseas and domestic markets. Dublin enjoyed the
strongest growth of all regions from overseas tourism of
9.1% per annum since 1990 compared with 6% nationally.
In contrast, Dublin showed only a 1% increase per annum
from domestic trips against an overall growth for domestic
tourism of 3.6% per annum. All other regions recorded a
growth of less than 4% per annum since 1990 in overseas
visitor numbers.

Table 3.7 Ireland s Share of Outbound Travel to Northern Europe
Source: Fáilte Ireland
Ireland s Share ( % ) 1996 1997 1998 1999 2000 2001 2002
Italy 11.6 11.1 10.9 11.4 13.3 12.1 12.0
France 14.8 15.8 17.8 11.9 8.3 8.8 9.6
Netherlands 8.5 8.9 9.9 8.2 9.5 9.6 8.2
Germany 4.8 5.0 5.0 4.6 4.8 4.6 4.6
Nordics 1.0 1.0 1.1 1.5 1.6 1.4 1.3

Table 3.8 Regional Distribution of Overseas and Domestic
Tourism Revenue

Source: Fáilte Ireland
1990
m
2002
m
Real Growth 2
1990-2002
As a % of
1990 revenue
As a % of
2002 revenue

Dublin 356 1,257 151% 22% 30%
South West 290 793 94% 18% 19%
Midlands/ East 159 414 85% 10% 10%
South East 169 434 82% 10% 10%
Shannon 198 433 55% 12% 10%
West 276 596 53% 17% 14%
North West 175 284 15% 11% 7%
Total 1,623 4,211 84% 53
53 Page 54 55
34
Tourism Policy Review Group
Activity Holidays
Most activity holidays showed considerable growth in the
late 1980s and early 1990s but as shown in Figure 3.2,
have recorded declines since then. This is of concern given
Ireland s comparative strength in this area over a number of
years. In the case of angling, the decline is attributable to a
combination of a declining interest in angling as a leisure
pursuit, increasing competition and product deterioration
in Ireland.

Golf is holding up better than most niche activities but has
reached a plateau since 1997. It should be borne in mind
that outdoor pursuits were adversely affected in 2001 by
Foot and Mouth restrictions. However, a number of
products were in decline before 2001, notably walking,
cycling and angling. Preliminary results for 2002 do not
show any reversal of this decline.

Breakdown of Expenditure by visitors
Tourism, both international and domestic, impacts on a
wide range of sectors, including food and drink, retail and
distribution, internal transport and personal services, as set
out in Figure 3.3.

Figure 3.2 Overseas Holidaymakers Engaging in Outdoor Activities 1990-2001

0
50

100
150
200
250
300

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Source: Fáilte Ireland Source: Fáilte Ireland

Hiking/ Walking
Golf
Angling
Cycling
Equestrian

Fares to Irish Carriers
Bed & Board
Other Food & Drink
Sightseeing/ Entertainment

Internal Transport
Shopping
Other
93m

Source: Fáilte Ireland/ CSO

Figure 3.3 Breakdown of Out-of-State Visitor Expenditure
2002 ( million) -Total 4 billion

278m
525m
718m

957m
1,111m

302m 54
54 Page 55 56
35
Domestic Tourism
Domestic residents spent almost 1 billion on close to 6
million trips, of at least one night away from home, within
Ireland during 2002. Domestic holidays accounted for 3
million of these trips and were worth an estimated 640
million. Holidays of 1 to 3 nights duration constituted 2
million trips while almost one million were holidays of 4 or
more nights. Details in relation to the number and
associated expenditure of domestic trips are set out in
Figures 3.4 and 3.5.

Irish tourists have long been an important bedrock for the
tourism industry. They are particularly important for certain
sectors of the industry, for particular areas and at off-peak
times. Hotels are the most popular type of accommodation
for domestic holidaymakers accounting for 45% of all bed-
nights on short holidays. The South West Region
consistently accounts for some 25% of all domestic
holidays, while the West and the South East each account
for a further 20% . In addition, some 30% of all short break
holidays are taken between January and April. In 1990, Irish
residents took some 5 million trips at a time when the
number of overseas visitors was 3.6 million. In per capita
terms, domestic holidaymakers do not spend as much as
overseas visitors. In 1990, although they accounted for
58% of tourist numbers, they contributed a quarter ( or
0.5 billion) of the overall revenue generated by tourism
( 2 billion) . The comparative figures for 2002 show that
domestic tourists accounted for 48% ( or 5.9 million) of
overall tourist numbers and generated less than 20% ( or
0.9 billion) of tourism earnings.

In 2002, against the expectations of the industry, the
number of domestic trips recorded at 5.8 million
represented a 21% decrease on 2001 performance ( 7.5
million trips) and a 10% decrease on 2000 ( 6.4 million
trips) . Figure 3.6 illustrates, by purpose of trip, the pattern
of domestic tourists from 1995 to 2002.

Figure 3.4 Number of Domestic Trips 1995-2002

Figure 3.5 Expenditure on Domestic Trips 1995-2002
Source: Fáilte Ireland

Source: Fáilte Ireland

8
7
6
5
4
3
2
1

1400
1200

1000
800
600
400

200
0

No.
of
Trips

(
m)

million

1995 1997 1999 2001 2002

1995 1997 1999 2001 2002
Short Holidays
Long Holidays
Other Domestic Trips

Short Holiday Spend
Long Holiday Spend
Other Domestic Spend

Source: Fáilte Ireland

Figure 3.6 Domestic Visitors by Purpose of Visit 1995-2002 Domestic Visitors by Purpose of Visit 1995-2002
1995 1998 1999 2000 2001 2002
Business Trips
Other Domestic Trips
Home Holidays
Visiting Friends/ Relatives Trips

4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

(
000s) 55
55 Page 56 57
36
Tourism Policy Review Group
3.2 The Irish Tourism Experience
Identifying and analysing the Irish tourism experience i. . e.
the experience of the customers of Irish tourism -is of
primary importance in the formulation of Ireland s tourism
policy and in shaping the competitive position for the
industry. From a supplier viewpoint, there is a natural
inclination to define tourism through the perspective of a
particular product. While analysis along product lines can
be useful, and provide valuable, if partial, insights, it is
essential that overall analysis of the industry is undertaken
from a customer perspective and that the tourism product
is defined accordingly. From this perspective the tourism
product can best be described as the complete experience
of the tourist from time of departure from home to the
time of return .

Typically, the tourism experience embraces a number of
inter-related elements as set out in Figure 3.7.

Evaluation of the Ireland tourism experience must take into
consideration the range of elements set out in the
diagrammatic representation. The weighting attached to
the different elements in the evaluation will, of course, vary.
It is essential that all elements of the holiday experience
fully meet customer expectations and that they compare
well with competitor destinations in order for the industry
to meet its full potential in the future.

Survey analyses indicate that the core tourism appeal of
Ireland is characterised by people, place and pace . Visitors to
Ireland are motivated principally by:

the expectation of a warm and welcoming people
with the opportunity to interact with the people
and the culture in all of its diverse forms

the perception of beautiful unspoilt scenery and
opportunities for sightseeing

the comfort of a relaxed pace of life delivering both
physical and emotional benefits to the visitor.

These three key elements exert a different pull depending
on factors such as the country of residence of the potential
visitor, whether they are first time or repeat visitors and
whether or not they have ancestral or more immediate
ethnic ties with Ireland.

Surveys of overseas holiday visitors have consistently
confirmed the importance of the above core product
values and provide a rating of visitor satisfaction with
these aspects of the Irish holiday experience as set out in
Table 3.9.

Figure 3.7 Ireland s Tourism Product -Principal Components
Place
Natural Attractors
Scenery/ Landscape
Seascapes
Countryside
Waterways

Accessibility
Airports/ Seaports
Airlines
Shipping companies

Facilities/ Services
Roads/ Signposting
Internal Transport
Communications
Accommodation
Restaurants
Pubs/ Bars
Entertainment
Activities
Things to see and do
Shops
Other support services
People and Pace

Intellectual Value System
People/ Way of life
History/ Heritage
Arts/ Culture
Folklore/ Beliefs
Towns/ Villages
Land use

People, place
and pace/
Value for money/
Safety/ security 56
56 Page 57 58
37
Ireland delivers substantially on the most important factors.
In most cases, and in particular with regard to easy, relaxed
pace, the level of satisfaction exceeds the level of
importance. Consistently, and with little variation over the
past 10 years, the holiday experience of visitors to Ireland
has met or exceeded expectations in the case of over 90%
of visitors. However, underlying all of these core factors is
the perception of value for money. On this factor, Ireland
has been significantly losing out in recent years. In 2002,
55% of overseas holidaymakers considered that they had
not got good value for money well down on previous
years.

Successful promotion of the Irish tourism product to a
more discerning customer base requires a natural and built
environment together with a range of experiences and a
level of service up to the highest international standards.
Tourists today are more demanding and expect more of
their investment of time and money. While holidays, in
general, are becoming shorter but more frequent, with a
recent emphasis on city breaks and weekend trips and a
growing tendency to try to cram a greater amount into a
shorter stay, there is a much higher level of expectation of a
positive experience, on the part of the visitor, than was the
case in the past.

Table 3.10 illustrates the significance of the various
elements of the Irish tourism product in terms of usage by
overseas holidaymakers. Of particular note is the

importance of hotels, guesthouses and B& Bs in tourist
accommodation, the high incidence of eating out in
pubs/ bars, the significance of the built heritage in terms of
visitor attractions and the low levels of activity holidays.

Table 3.9 Important Factors when Choosing to Holiday in Ireland
and Satisfaction Ratings

Source: Fáilte Ireland Visitor Attitudes Surveys 1997-2002
Very Important ( % ) Rating -% Very Satisfied
1997 1999 2000 2001 2002

Table 3.10 Use of Various Elements of the Tourism Product by
Overseas Holiday Visitors
Accommodation Type Overseas Holiday Visitors ( % )
Guesthouses/ B& Bs 45
Hotels 36
Holiday Hostel 9
Self-catering group schemes 6
Camping 2
Youth Hostel 2
Self-catering ( individual Premises) 2
Self-catering apartments 1
Cabin Cruiser 1

Food Services Use of Food Service Outlets ( % )

Food in pubs/ bars 61
Budget restaurants 36
Food in Hotels 30
High quality restaurants 30
Food in other accommodation 18

Internal Transport Use of Internal Transport Services ( % )

Car hire 31
Intercity bus services 21
Taxis 18
Day coach tours 10
Intercity rail services 9
Coach tours ( including overnight stay) 5

Places of Historical/ Cultural Interest Use of Visitor Attractions ( % )

Historic houses/ castles 56
Monuments 39
Gardens 32
Heritage/ Interpretive Centres 31
Museums/ Art Galleries 27
Theatre/ Concerts 10

Activity Use of Activity Products ( % )

Cycling/ Hiking/ Walking 7
Golf 7
Fishing 4
Equestrian pursuits 2

Source: Fáilte Ireland Survey of Overseas Travellers 2002 57
57 Page 58 59
38
Tourism Policy Review Group
3.3 Overview/ Conclusions
The success of Irish tourism as an important instrument of
national and regional economic development in recent
years, in particular, has resulted from the outstanding
achievement of the industry in gaining or holding market
share in virtually all the markets in which it competes in a
strongly expanding market environment. Ireland' s share of
US visitors to Europe increased from 5% in 1990 to 7% in
2002. Latterly Ireland has seen a decline in its share of the
expanding British market a share it held since 1990. .
However, in line with the significant increase in the number
of British people taking overseas holidays, holiday visitor
numbers from Britain to Ireland increased by over 8% per
year on average between 1990 and 2002 a growth rate
higher than from any other market. France, and to some
extent Germany, are exceptions to the increasing or constant
market share of Irish tourism over the past 10 years.

Domestic tourism remains a bedrock for the Irish tourism
industry and accounted for almost half of all visitor
numbers seeking accommodation in 2002. Its contribution
to tourism earnings is considerably less, largely because of
the length of stay but, nevertheless, accounted for almost
1 billion in tourism revenue in 2002.

The perception of visitors with respect to the Irish tourism
experience has remained consistently high over the past 10
years across most of the factors that determine the
attractiveness of Ireland to overseas visitors ( including
people, scenery, environment, security etc) . This might be
expected given the increased market share that Ireland has
gained. An exception, in more recent years, has been in
visitor perception of value for money, with only 45% of
visitors in 2002 considering that Ireland represented
good/ very good value for money. 58
58 Page 59 60
Dublin
To
be
purchased

directly
from
the

Published
by
the
Stationery

Office

GOVERNMENT
PUBLICATIONS
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OFFICE

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59 Page 60 61
39 60
60 Page 61 62
40
Tourism Policy Review Group
Tourism in Ireland Today -An Assessment
Irish tourism is, arguably, the most successful sector of
Irish-owned enterprise since the foundation of the
State. The industry today has strong foundations which
underpinned its success in the 1990s. It is, however, at
an important turning point in its evolution. Recent
years have seen a significant loss of competitiveness
which, if not redressed, will undermine the capacity of
the industry to benefit from the strong growth
envisaged in international tourism in the years ahead.

4 chapter four 61
61 Page 62 63
41 62
62 Page 63 64
42
Tourism Policy Review Group
Summary of Main Conclusions
The strong foundation blocks on which the Irish tourism industry rests today include a historically high
customer base of almost 6 million visitors, consistently high overall customer satisfaction ratings, a competent
and experienced workforce and a modern and efficient capital stock of accommodation and other attractions,
including air and sea transport services.

Following competitive gains in the 1990s, Ireland in 2002 was perceived by 55% of visitors as not providing
good value for money.

High insurance costs are a major burden and there is an urgent need to accelerate the Government' s
insurance reform programme to reduce premiums.

While specific Government actions are necessary to address price inflation generally, the tourism industry itself
has the primary role and responsibility in driving down costs in the industry.

The range of tourism products and services has improved significantly but there are indications of under-utilised
capacity and falling margins that threaten reinvestment and the maintenance of standards in the future.

A number of gaps in tourism infrastructure, most importantly the development of a National Conference
Centre, need to be addressed, as well as a greater emphasis on environmental conservation, product
innovation and the packaging and presentation of tourism product to meet changing customer requirements.

While there have been major improvements in air and sea access to Ireland during the 1990s, additional
visitors could be attracted through changes in transport policy and improvements in access infrastructure.

A greater level of industry investment is needed in human resource development and training to upgrade skill
levels in the industry to the highest international standards.

There is considerable scope to improve the efficiency and effectiveness of spend in marketing and promotion
by the State and tourism industry.

The ability of the Department of Tourism, Culture and Sport, the Tourism State Agencies and the tourism industry
to more effectively shape and influence policy in the wider issues that impact on tourism, will be a key
influence in determining the future success of the sector.

The role of the Department of Tourism, Culture and Sport in policy formulation and analysis requires to be
strengthened if the tourism industry is to contribute its full potential to national and regional development. 63
63 Page 64 65
43
4.1 Foundations for Future Success
As set out earlier in this Report, the Irish tourism industry
made significant advances during the 1990s, with above
average international growth rates and gains in market
share, in particular from North America and Britain. The
strong foundation blocks on which the Irish tourism
industry rests today include:

a historically high customer base with almost 6
million overseas visitors in 2002 close to the peak
6.18 million achieved in 2000. This is more than
twice the number of overseas visitors for 1990 and
more than three times the number who came to
Ireland in 1985. Moreover, some 6 million domestic
tourist trips were made in 2002. This is a major
customer base, by any standards, which generated
in total approximately 5 billion in revenue
earnings in 2002

high overall customer satisfaction levels as indicated
in comprehensive visitor attitude surveys conducted
over the years. Consistently, and with little variation
over the past 10 years, the holiday experience of
visitors to Ireland has met or exceeded expectations
in the case of well over 90% of visitors. Satisfaction
with accommodation is also generally high with the
CERT Hospitality Survey for 2002 showing that close
to 80% of visitors were well satisfied with the
accommodation they used, ranging from top class
hotels to B& B establishments. A high proportion of
visitors ( between 80% and 90% of survey
respondents) would recommend Ireland as a
holiday destination which is significant in the light
of the importance of word of mouth
recommendations in determining holiday choices

the high employment base of Irish tourism,
currently estimated at 140,000, with a very strong
upward trend over the past 10 years in excess of
the rate of employment growth nationally. This
increasingly competent and experienced workforce
represents a major asset going forward given the
nature of the industry in which the attitudes,
competence, enterprise and innovation of the
people are both part of the production process to
meet customer needs and the product itself which
the customer experiences

the capital stock of Irish tourism has increased
significantly in both quantitative and qualitative
terms in recent years, financed primarily by the
private sector but with major support through EU
and Exchequer funds and tax incentives. The
additions to the accommodation base have been
particularly noteworthy but there have been
similarly high levels of investment in tourism
attractions, leisure facilities, State heritage and
cultural facilities, tourist information offices and
passenger transport including aircraft, , sea ferries,
coaches and car hire fleets. This rate of expansion
means that a high proportion of the current
physical stock of Irish tourism is modern, efficient
and up-to-date.

In short, there is a confidence, professionalism and
expertise in the industry today, based on the competitive
success of recent years, which did not exist in the past. The
industry has generally achieved the challenging investment,
revenue earnings and employment targets set for it under
successive national plans and EU Operational Programmes
for Tourism. These are invaluable foundations which
provide a solid base on which the new challenges facing
the Irish tourism industry can be addressed with
confidence.

Any review of Irish tourism requires an assessment of its key
components as a necessary foundation for the development
of a new strategy for the future development of the sector
and an associated set of actions to drive the industry
forward. This Chapter provides such an assessment under a
number of headings:

competitiveness and value for money
product development
access transport
the people in tourism
marketing and promotion
the wider issues affecting future growth
tourism policy formulation and implementation. 64
64 Page 65 66
4.2 Competitiveness and Value for Money
Satisfaction Ratings
During the 1990s, the Irish tourism industry performed
well in terms of competitiveness, as indicated in the
overall satisfaction ratings accorded by overseas visitors
and the increase in market share attained, as set out
earlier in this Report. Increasingly, Ireland was seen to be
offering a better quality product. It was competitively
priced, assisted by favourable exchange rates for the US
dollar and sterling. Deregulation in the aviation sector
meant easier and cheaper air access. The friendliness of
the Irish people and the scenic beauty of the country
were increasingly appreciated and the growing interest in
Irish culture, particularly in the performing arts,
contributed to Ireland becoming an attractive and even
fashionable destination. However, declining market share
of holiday visitors from Germany and France during the
1990s was a worrying trend.

The most significant finding from Bord Fáilte Visitor
Attitude Surveys is the increasing proportion of those
questioned who say that the value for money of their
holiday experience is only " fair, poor or very poor" .
The value for money rating declined significantly in 2002
when 55% of overseas visitors surveyed considered that
Ireland did not provide good value for money. Such a
rating, if sustained, constitutes a potential competitiveness
crisis for the industry. While there were a number of factors
that accounted for this ( including fluctuations in exchange

rates and more easier price comparisons resulting from the
introduction of the euro) , deterioration in satisfaction
ratings were evident across all markets. Figure 4.1 illustrates
the significant drop from the 63% satisfaction peak
achieved in 2000 down to 45% in 2002. Looking at the
results by market, there was an even steeper decline in the
US market where satisfaction ratings dropped by 25
percentage points, from 73% to 48% from 2001 to 2002.

The aspects most frequently mentioned by survey
respondents, as offering poor value for money, were eating
out, drink, food purchased in shops or supermarkets, and
the cost of living generally. Figure 4.2 illustrates the extent
to which actual experience of prices exceeded visitor
expectations in 2002.

Tourism Policy Review Group
Figure 4.1 Overseas Holidaymakers Rating of Value for Money Overseas Holidaymakers Rating of Value for Money
Source: Fáilte Ireland/ Survey of Overseas Travellers
%
of
holiday

visitors

Very good/ good value Fair/ Poor/ Very poor value
1997 1998 1999 2000 2001 2002 30

40
50
60
70
80

Figure 4.2 Overseas Visitors View of Prices in Ireland 2002 Overseas Visitors View of Prices in Ireland 2002
Source: Fáilte Ireland
0102030405060
Self-catering
Hotels
Guesthouse/ B& B
Car Hire

Eating Out

Food ( other than eating out)
Taxis

Drink ( Alcoholic)

% more than expected
44 65
65 Page 66 67
45
There are a number of factors influencing the price
competitiveness of the Irish tourism product but the
external shocks suffered in 2001, and the downturn in
visitor numbers since then, have brought competitiveness
into sharper focus. These factors include:

inflation and how it impacts on operating costs and
prices generally

taxation levels, in particular indirect taxes and excise
duties

currency movements
insurance costs
the ability of the industry to manage costs and
prices through improvements in productivity,
innovation, use of new technologies and
discounts/ special offers.

Inflation
Figure 4.3 illustrates the annual change in the Consumer
Price Index since 1996 and how it compares with inflation
in the eurozone. The Irish index ( 100) was set in
November 1996 and, by December 2002, had increased
to 121.4. In July 2003, the Central Statistics Office ( CSO)
reported that inflation had decreased in each of the
previous four months but, even at 3.5% , was almost twice
the EU average of 1.8% .

The CSO also reported that, among the most notable price
changes in the year, were increases in alcoholic beverages
and tobacco ( + 9.9% ) and in restaurants, hotels and
licensed premises ( + 6.5% ) , which were increasing well in
excess of the average rate of inflation.

Comparisons within the eurozone
The price competitiveness of Ireland within the European
Union is a useful measure against which to measure
performance for two reasons firstly, , because the majority
of overseas visitors to Ireland are European in origin and
secondly, because Ireland competes with other European
destinations for long-haul visitors.

With the introduction of the euro there is now total
transparency of costs among the twelve eurozone
countries. As Figure 4.4 demonstrates, recent research
published by Forfás ( Consumer Pricing Report, May 2003)
found no abatement in the rates of consumer price inflation
( since the euro changeover) , but rather indications were
that Ireland could soon emerge as the most expensive
country for consumer goods/ services within the eurozone.
Specifically the research found that Ireland' s position was:

the second most expensive of the 15 EU member
states -it was fifth from the bottom in 1999 and is
markedly more expensive when compared to
Greece, Spain or Portugal

the most expensive of the eurozone countries for
food and for prices in pubs and restaurants

the second most expensive for off licence alcohol
with 10 of the 12 eurozone countries some 40% to
60% cheaper than here

the second most expensive country for recreation
and culture.

Figure 4.3 Consumer Price Index 1996-2002 Annual Percentage Changes Consumer Price Index 1996-2002 Annual Percentage Changes

Source: CSO
0%
1%
2%
3%
4%
5%
6%

1996 1997 1998 1999 2000 2001 2002
Eurozone Ireland 66
66 Page 67 68
46
For visitors, the price issue relates not so much to the cost
of access and accommodation, which is generally pre-
booked at a known and fixed price, but, as already
indicated, to the price of eating out, drink, food in shops
and the general cost of living when they get here.

In order to address Ireland' s comparatively high inflation
rate in European terms, it is essential that the provisions of
the Social Partnership Agreement 2003 -2005 Sustaining
Progress are fully implemented by all the social partners, ,
to help restore, and enhance, national competitiveness. In
this respect the provisions relating to pay, productivity and
the facilitation of change in the workplace are particularly
important to the tourism industry, as well as the
Agreement' s anti-inflation initiative. The analysis and
measures proposed by the National Competitiveness
Council and Forfás, in their May 2003 Statement on
Inflation , are also of importance, in particular the
recommended commitment to an inflation target
benchmarked to the eurozone average, prudent fiscal
policy, enhanced competition reform and the avoidance of
further increases in excise duties, VAT and in charges for
Government services for the remainder of 2003 and in
Budget 2004.

Taxation Levels
Reforms in the Irish taxation system over the past decade
have resulted in generally favourable rates of income and
social insurance taxes and corporation tax in comparison
with other EU countries. This operates to the benefit of the
Irish tourism industry, as well as business generally, in terms
of labour costs and the availability of profits for re-
investment. The Irish tourism industry also benefited from
very generous capital allowances for hotels and other forms
of accommodation and roll-over relief until the changes
introduced in the Finance Act 2003. There are some
indications that some of the investment that has taken
place was tax driven rather than tourism driven.

Price differentials at international level for tourism products
and services can often be partially explained by differences
in tax rates. Table 4.1 sets out the current VAT rates
applicable to hotels and restaurants in the EU. The Table
shows that Ireland is in the mid-range of rates applicable to
restaurants while it is the fourth highest in the case of
hotels. The VAT rate applicable to hotels and restaurants
was increased from 12.5% to 13.5% in the 2003 Budget.

Tourism Policy Review Group
Figure 4.4 Index of Affordability of Consumer Goods 2002 Index of Affordability of Consumer Goods 2002

Source: Forfás Consumer Pricing Report
0 20 40 60 80 100 120

Finland
Ireland
Netherlands
Germany
Luxembourg
France
Belgium
Austria
Italy
Spain
Greece
Portugal

Table 4.1 VAT Rates in Hotels and Restaurants 2003

Source: Department of Finance
Hotels
1 Denmark 25.0
2 Britain 17.5
3 Germany 16.0
4 Ireland 13.5
5 Sweden 12.0
6 Italy 10.0
7 Austria 10.0
8 Greece 8.0
9 Finland 8.0
10 Spain 7.0
11 Belgium 6.0
12 Netherlands 6.0
13 France 5.5
14 Portugal 5.0
15 Luxembourg 3.0

Restaurants
1 Denmark 25.0
2 Sweden 25.0
3 Finland 22.0
4 Belgium 21.0
5 France 19.6
6 Britain 17.5
7 Germany 16.0
8 Ireland 13.5
9 Portugal 12.0
10 Italy 10.0
11 Austria 10.0
12 Greece 8.0
13 Spain 7.0
14 Netherlands 6.0
15 Luxembourg 3.0 67
67 Page 68 69
47
The combined impact of the relatively high rates of excise
duty and VAT in Ireland on alcoholic drinks, in particular
wine, exacerbates price differentials with other European
destinations. Table 4.2 illustrates the position in the case of
a standard 750ml bottle of still wine. It is obviously
important, therefore, that the potential impact on the
tourism industry and on Exchequer tax receipts of any
proposed changes in excise duties and VAT rates are
carefully taken into account before decisions are taken to
adjust such rates in the future.

Currency Movements
Another factor that has led to Ireland becoming a more
expensive tourist destination has been the strengthening of
the euro against the US dollar in particular, but also
sterling. By 2002, the currency appreciation led to Ireland
becoming some 11% and 5% more expensive for US and
British visitors respectively since 1999 as set out in Table
4.3. While such developments also impact on other
eurozone countries, any further weakening of the value of
sterling or the US dollar, against the euro, would accelerate
a worsening of Ireland' s competitive position.

Insurance Costs
High insurance costs are a particular concern of the tourism
industry and very significant increases in premiums have
been experienced over the past 3 years. Not only are
general insurance increases raising industry costs, but the
scale of the increases are also placing in jeopardy many of
the activity holidays, tourist attractions and festivals that
offer good prospects for future tourism development.

The Government' s Insurance Reform Programme seeks to
bring about a reduction in insurance costs by the insurance
industry, for the benefit of consumers and businesses,
through improving the functioning of the insurance
market, decreasing the cost of delivery of compensation
and investigating the competitiveness of the market. The
Programme is overseen by a Ministerial Committee which
meets monthly. Implementation of the recommendations in
the Motor Insurance Advisory Board Report of April, 2002
are being advanced. The Interim Personal Injuries
Assessment Board ( PIAB) is up and running and proposals
to establish the PIAB on a statutory basis are expected to be
substantially advanced by the end of 2004. The Report on
competition in the insurance sector by the Competition
Authority is also expected to be completed by year end.

Given the negative impact of recent increases in insurance
on the tourism industry, there is an urgent need to
accelerate the Insurance Reform Programme, to assess the
specific impact of insurance increases on the tourism sector
and to bring about reductions in premiums at the earliest
possible date. The tourism industry itself should also
consider the scope for co-operative actions, in areas such as
the management of claims, health and safety measures and
self-insurance, to address the issue.

Table 4.2 Excise Duty and VAT on Still Wine
Excise Duty
per 750ml VAT

Ireland 2.05 21.0%
Britain 1.88 17.5%
Sweden 1.81 25.0%
Finland 1.77 22.0%
Denmark 0.71 25.0%
Netherlands 0.44 19.0%
Belgium 0.35 21.0%
France 0.03 19.6%
Austria 0.00 20.0%
Germany 0.00 16.0%
Greece 0.00 18.0%
Italy 0.00 20.0%
Luxembourg 0.00 12.0%
Portugal 0.00 12.0%
Spain 0.00 16.0%

Source: Department of Tourism, Culture and Sport

Table 4.3 Exchange Rates: Units per euro
US $ Stg £
US $ Stg £
1999 1.0658 0.6587
2000 0.9236 0.6095
2001 0.8956 0.6219
2002 0.9456 0.6288
% change since 1999 -11.28% -4.54%

Source: Department of Finance 68
68 Page 69 70
48
Tourism Industry Initiatives on Inflation
While actions at Government level are desirable to address
inflation, the tourism sector itself has the primary
responsibility to manage within the given cost environment
and to seek to drive down costs in the industry. While
inflation, insurance costs, currency movements and taxation
rates constitute major pressures on costs, tourism pricing
and margins are substantially influenced by the actions of
businesses themselves. Network groups and the tourism
industry representative bodies can play an important role in
developing and supporting initiatives which help to reduce
costs and prices. There is a need for the industry, in
co-operation with the Tourism State Agencies, to identify
specific measures to improve competitiveness at operational
level, through improvements in general management and
human resource practices, more effective and efficient use
of new information and communication technologies,
enhanced productivity measures, more innovative pricing
initiatives and a relentless drive to reduce costs.

4.3 Product Development
Product Development Strategy
As highlighted in Chapter 2 of this Report, the range of
tourism products and services in Ireland has improved
significantly both in terms of quantity and quality, over the
past decade. Some 4.3 billion has been invested in
tourism capital stock during the 1990s.

The two EU backed Operational Programmes for Tourism,
1989 -1993 and 1994 -1999, helped to identify the
investment requirements of the industry and supported the
upgrading of tourist accommodation and associated all-
weather leisure and conference facilities, the development
of specialist activities ( such as golf, angling, equestrian,
walking) , enhancement of national and local public cultural
and heritage infrastructure and the modernisation of the
tourist office network.

The Tourism Development Strategy, launched by Bord
Fáilte in October 2000, emphasised the need for a more
integrated approach to tourism planning and investment
for the purposes of the National Development Plan, 2000 -
2006, and in allocating investment support under the
tourism product development measure of the two Regional
Operational Programmes under the Plan. The strategy,
which is very much in line with the aims and objectives of

the National Spatial Strategy launched in November 2002,
identified and categorised the country' s tourism zones and
outlined the critical issues to be addressed for the 2000 -
2006 period i. e. regional spread, seasonality, infrastructural
bottlenecks, sustainability, congestion, customer service and
quality management. Investment supports under the
current product development measure are being targeted
at a range of projects including:

major attractors ( and clusters of existing attractors)
special interest pursuits
tourism/ environmental management.
The product development measure is intended to address
the key product gaps currently found in Ireland' s tourism
infrastructure, with support focused, in particular, on
developing and underdeveloped tourism areas of the
country. Support available for the established tourism areas
( Dublin, Cork, Galway, Shannon and Killarney) is confined
to environmental and visitor management initiatives. No
support is available for additions to tourism
accommodation as any further expansion is expected to be
met through normal market forces.

Some remaining national strategic product gaps exist, most
importantly the development of a dedicated state of the art
National Conference Centre in Dublin. The recent decision
by the Government to advance this project by way of a
leasing arrangement through an open competitive
procurement process is a major step towards the realisation
of a Conference Centre which has the potential to generate
an additional 30,000 annual visitors. Moreover, there are
untapped opportunities arising from the hosting of
international field-based sporting events, which would be
strengthened through the development of the proposed
National Sports Stadium in Dublin. The artistic and cultural
infrastructure of Dublin also needs to be upgraded to
compete with other European capital cities.

Tourism Accommodation Stock
In line with the expansion of the Irish tourism industry
during the 1990s and driven by favourable taxation
arrangements, there were significant additions to the
tourism accommodation stock as set out in Table 4.4. The
expansion mainly occurred in the hotel and guesthouse
and registered self-catering categories, due to changes in
customer demand and the availability of taxation

Tourism Policy Review Group 69
69 Page 70 71
incentives. The number of approved B& Bs fell, although it
is unclear to what extent this development may have been
compensated by increases in unapproved accommodation.
The current stock of accommodation is generally regarded
to be of high quality although the high number of hotels
opting out of the official voluntary classification system is a
matter of concern, given the growing customer emphasis
on standards and quality of service.

While the levels of investment in, and expansion of, tourism
accommodation since the mid 1980s would suggest that
the rates of return to those involved in the industry have
been attractive, recent information indicates that the
outlook is not as favourable as it has been. Based on annual
surveys of the hotel industry conducted by Horwath Bastow
Charlton, average room occupancy rates have been
declining since 2000, as well as profit before tax per room,
as set out in Table 4.5. Further development, investment and upgrading in tourist accommodation will be heavily dependent on the returns

available in the sector and the tax treatment of such
investment. If occupancy rates and margins continue to
decline, future investment in facilities is likely to be
curtailed giving rise to an eventual deterioration in quality.
However, current pressures and levels of unused capacity in
the hotel and wider accommodation sector would suggest
that a cautious attitude should be taken in the short-term
in relation to new investment, unless warranted by clearly
identified market needs.

As at 1st January 1996 1997 1998 1999 2000 2001 2002 % ' 96-' 02
Hotels Premises 713 728 771 838 847 851 858 + 20 Rooms 26,350 26,976 30,445 36,282 39,656 40,008 41,983 + 59

Guest Houses Premises 344 370 422 489 488 489 486 + 41 Rooms 3,616 3,856 4,501 5,114 5,207 5,272 5,336 + 48
B& Bs Premises 3,921 3,926 4,267 4,221 3,904 3,791 3,563 -9 Rooms 16,131 16,975 17,216 17,123 17,828 15,529 14,652 -9
Caravan & Camping Premises 133 132 133 133 132 132 127 -5 Pitches 8,079 8,753 8,457 8,390 8,405 8,299 7,396 -8
Hostels Premises 188 227 224 230 207 206 198 + 5 Beds 9,304 11,381 10,898 11,230 11,027 11,015 10,771 + 16
Registered Self-Catering Units 2,008 2,162 2,165 2,390 2,527 2,432 2,461 + 23
Listed Self-Catering Units N/ A N/ A N/ A N/ A N/ A 5,978 5,649 -6

Source: Fáilte Ireland

Table 4.4 Tourism Accommodation Stock 1996-2002

Table 4.5 Hotel Room Occupancy Average Rates and Profit before
Tax per Room 2000-2002
2000 2001 2002
Room Occupancy Average %
National 68.3 65.9 64.8
1-49 Room Hotel 57.0 50.7 54.8
50-99 Room Hotel 68.4 63.0 63.3
100+ Room Hotel 68.6 68.1 64.6
Profit before Tax per Room 9,895 9,067 8,555

Source: Horwath Bastow Charleton Hotel Industry Surveys
2000-2002

49 70
70 Page 71 72
50
Environmental Issues
The quality of the natural environment is regarded as one
of the core assets in promoting Ireland overseas, and in
seeking competitive advantage for Ireland as a tourism
destination. Visitor Attitude Surveys have shown a generally
high level of satisfaction on the part of overseas visitors
under a range of environmental issues such as beautiful
scenery, natural unspoilt environment, nature/ wildlife/ flora
and attractive cities/ towns. Satisfaction levels in relation to
litter and pollution are at much lower levels, suggesting the
continuing need for improvements. The details are set out
in Table 4.6.

The main challenges at national level now facing
environment and sustainable development policy are
improving the quality of inland waters, improving waste
management, enhancing the urban and rural environment
through good design of new development and sensible
development control decisions, controlling greenhouse gas
and other emissions in accordance with Ireland' s
international commitments, and protecting natural
resources.

The intensity of tourism activity in Ireland is low by
international standards, given our population density and
visitor numbers. However, congestion and visitor
management issues do arise, in particular in some flagship
major tourism attractions and locations during the peak
period. A pilot initiative on tourism and the environment,
launched in February 1998 following the mid-term review
of the Operational Programme for Tourism, 1994 -1999,
provided over 3 million in grant aid to twenty two
projects, covering a range of different tourism
environmental issues. The pilot initiatives included visitor
and traffic management, area-based planning and analysis

of carrying capacity, training and awareness, litter control,
development of alternative touring routes and best practice
in environment restoration. However, the take-up under the
environmental heading of the current tourism product
development measure has been poor, suggesting a possible
lack of appreciation of the importance of sustainable
development. Accordingly, the contribution of Local
Authorities, as the regulatory authority for the sustainability
of the environment, will be critically important to
maintaining an attractive natural and built environment. In
the past, Bord Fáilte played an important role in
championing environmental issues and highlighting their
importance in terms of sustainable tourism development.
An enhanced role in this area should now be taken on by
Fáilte Ireland, with support from the tourism industry. This
would have a number of benefits:

it would be consistent with an increasing public
concern that tourism development be well aligned
with the conservation of the national and built
environment which, in itself, is a major tourist
attraction in Ireland

it would be consistent with the increasing number
of tourists who are concerned about environmental
issues and who increasingly choose locations,
accommodation, visitor attractions and visitor
services on the basis of their fit with good
environmental practices

it would be consistent with the trends in EU and
national legislation which is driving environmental
related change to minimise waste, reduce waste
disposal costs and conserve energy

it would provide an opportunity for tourist
enterprises to achieve cost reductions through
reduced energy and water use, reduced food and
packaging waste, and reduced linen rental and
laundry charges.

Innovation and Better Packaging and Presentation of
the Tourism Product

The under utilisation of many tourism facilities and attractions
and reducing occupancy rates in tourism accommodation,
suggests that more could be done at local and regional level
to cluster, integrate and better market our existing range of
facilities. These include heritage, cultural and sporting
attractions that could meet many of the changing

Tourism Policy Review Group
Environment 1997 % 1999 % 2000 % 2001 % 2002 %
Beautiful scenery 89 89 89 89 91
Natural unspoilt environment 83 77 79 79 83
Attractive cities/ towns 59 62 66 64 65
Nature/ wildlife/ flora n/ a 73 75 75 78
Litter free/ pollution free n/ a 54 54 54 56

Table 4.6 Rating of Ireland on Environmental Issues ( % Very Satisfied)

Source: Fáilte Ireland Visitor Attitude Surveys 71
71 Page 72 73
51
international customer requirements identified in Chapter 1 of
this Report. There should also be a more proactive and
innovative focus by enterprises and the Tourism State Agencies
on packaging the Irish holiday product to meet specific
customer needs e. . g. specialist sporting activities including
horse and greyhound racing, car touring, health and well
being tourism. This approach should be informed by the
international product benchmarking of Fáilte Ireland and
advice for the adoption of best international practices. State
support for major sporting events and festivals should be
conditional on guaranteed appropriate levels of access for
overseas visitors and the capacity of the events to generate
incremental visitors and international publicity.

An important role for Fáilte Ireland, therefore, will be to
help strengthen the capability of the industry in product
innovation and development.

The processing of project proposals for grants under the
existing tourism product development measure of the
Regional Operational Programmes needs to be accelerated,
and the criteria and procedures need to be reappraised, in the
light of experience under the existing round of applications.
In particular, additional resources require to be put in place to
promote the scheme effectively, to encourage innovation and
greater private sector involvement and to ensure that good
projects are brought forward and supported.

Validated Accessible Scheme for People with Disabilities
Fáilte Ireland has introduced a new voluntary scheme for the
validation of all listed and registered accommodation that
provides for the needs of people with disabilities. Proprietors
are invited to have their premises validated and promoted
through the new scheme. No fee is required to enter the
scheme. The Validated Accessible Scheme ( VAS) will enable
people with disabilities to make an informed choice when
booking accommodation. This information will be available on
the national tourism websites commencing 2003 and in the
various accommodation guides from 2004. Initially the new
scheme will apply to premises with accommodation suitable
for guests with mobility impairment. The scheme will then be
expanded to encompass premises with accommodation
suitable for guests with hearing/ sight impairments.

Special Interest/ Activity Products
Special interest activities such as golf, angling, walking, cycling
and equestrian pursuits, rural tourism and holidays based on
Irish language, culture and way of life, add to the range and
variety of the Irish holiday experience, contribute to regional

development objectives and have a higher yield than other
tourism segments. Although some decline has occurred in
these segments since the early 1990s, such holiday activities
have good growth prospects based on the changing customer
trends identified earlier in this Report. While many of the issues
already identified to support the future development of
tourism will benefit special interest segments, there are other
sector-specific issues that also need to be addressed. In many
cases, special interest sectors are not well co-ordinated at
national level. While Product Marketing Groups are active in
most segments and are supported by Fáilte Ireland, there is a
need to expand membership to provide a basis for long-term
viability, in terms of funding and marketing. For many special
interest segments, the barriers to realizing full potential are not
directly within the control of tourism interests and require to
be addressed at a wider national level. For example:

the difficulty regarding access to walking routes on
privately-owned land remains to be resolved

the decline in angling catch levels would be
improved through better water quality

the speedy processing of visa applications would
support the English Language Training sector

the ongoing viability of certain heritage attractions
is at risk without a comprehensive plan to address
the need for on-going maintenance and capital
reinvestment.

Many special interest segments are comprised of small
family-run enterprises which have limited resources for
marketing and development. They require advice and
support at national level in areas such as research, training
and marketing.

4.4 Access Transport
One of the principal drivers of success of Irish tourism in the
1990s was the improvement in the range, quality and
competitiveness of air and sea access over that period.
Overall passenger throughput at Dublin, Shannon and Cork
airports was close to 20 million in 2002 compared with a
figure of 11 million in 1995 with almost 80% % travelling
through Dublin Airport. Increased capacity and lower air
fares have enhanced the attractiveness of Ireland as a
destination, generating most of the increase in visitor traffic
and outpacing the performance of sea travel. The position is
summarised in Figure 4.5. 72
72 Page 73 74
52
Competitive and convenient access transport in terms of
routes, capacity, services, frequency and fares will be a
crucial determinant of future international demand for
tourism destinations, especially in the case of an island such
as Ireland. The increase in the incidence of short leisure trips,
the growth in popularity of urban tourism, and the search for
convenience and good value ( spurred by low fare carriers
and advances in information and communication
technologies) all point to the growing importance of
convenient and competitive direct access if Irish tourism is to
thrive in the future. It will be essential, therefore, to expand
access services, to open up new routes, to promote
competition and to have in place the modern port and
airport infrastructure to service such requirements.

Air Services to and from Ireland
The past decade was one of liberalisation of EU regulations
governing air services. For the first time, an effective free
market in intra-European air travel was created within the
EU, resulting in greater competition, more services and
lower fares pioneered by the new, low fare airlines. Air travel
to and from Ireland was revolutionised, radically changing
the route and pricing structures on cross channel services,
and, more recently, in the case of a number of European

routes. Ireland also benefited from the introduction of
several new carriers, and existing carriers expanded their
capacities on cross channel and European routes. Low fare
carriers are expected to expand further and indications are
that there are significant opportunities to expand the route
network to Ireland, in particular from mainland Europe. This,
however, will require additional, competitive, fast
turnaround terminal facilities, in particular at Dublin Airport,
at the earliest possible date. The impact of such additional
air routes would, in turn, increase the potential for greater
competition between airlines leading to even more
competitive fare structures. The recent decision to establish
Dublin, Shannon and Cork airports as fully independent and
autonomous authorities under State ownership is intended
to have the effect of introducing further competition to
encourage the development of new services, particularly to
the regions. Visitor reception facilities at key international
access airports also need to be of the highest standards and
reflect Ireland' s reputation as a welcoming destination.

The airlines servicing transatlantic routes responded well to
the amendment to the Ireland-US Air Bilateral Agreement in
1994. Aer Lingus introduced a new transatlantic fleet and
capacity increased significantly subsequently with
Continental Airlines, Delta, Air Canada and US Airways

Tourism Policy Review Group
Figure 4.5 Total Passenger Movements ( Air and Sea) 1990-2001 Total Passenger Movements ( Air and Sea) 1990-2001

Source: CSO
25,000
20,000

(
000s) 15,000

10,000

5,000
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Cross Channel Continental Transatlantic Total Passengers 73
73 Page 74 75
53
providing access through an expanded number of
gateways. While the aftermath of September 11th saw a
capacity reduction of up to 25% in transatlantic seats, this
had largely been restored by 2003. Indications from the
carriers suggest that there is untapped potential for further
expansion in the medium-term on transatlantic routes, with
the possibility of opening up new gateways leading to
enhanced visitor flows from North America. The recent
decision of the EU Transport Council to mandate the
European Commission to negotiate an EU/ US aviation
agreement in the light of a ruling by the European Court of
Justice, offers the prospect of an open skies policy but may
take a number of years to achieve. This does not rule out
the possibility in the meantime of an early renegotiation of
the Ireland -US Bilateral Air Agreement with a view to
accelerating the expansion of air services, opening up the
prospect of additional visitors from the US.

Route of Travel
Figure 4.6 illustrates how visitors travelled to Ireland over
the past five years. It shows that in 2002, over half of all
visitors ( 3 million people) came by air cross-channel. In
1998 the corresponding figure was 45% ( or 2.57 million) .
In absolute terms this represents an increase of 20% in the
number of visitors travelling by air cross-channel. Mainland
Europe routes showed a similar increase of 20% over the
same period ( up to 1.17 million from 0.97 million) . The
level of direct transatlantic visits has remained fairly
constant since 1998 at 0.48 million, although significant
growth took place during the mid 1990s.

There are a small number of direct air services from certain
regional airports to Britain and mainland Europe, and direct
links from Dublin to Derry airport. Dublin dominates as the
gateway to Ireland, with even western regions more
dependent on Dublin, than on other gateways, for their
incoming visitors. This underlines the importance of
ensuring adequate gateway infrastructure, and internal
transport networks, not only converging on Dublin but on
other international airports also, and of offering the highest
standards in bus, rail, and road ( including signposting)
services. With decreasing mobility of visitors and shorter
length of stay, the under-utilisation of regional gateways for
air services is very apparent. A particular issue for regional
airports must be their continued viability, in view of their
number, proximity, and relatively low usage by tourists.

Ferry Services to/ from Ireland
Capacity on the Irish Sea routes has increased significantly
over the past decade, with substantial levels of investment
in new fleets by the major sea carriers. The provision of
passenger and car ferry services is particularly important in
catering for visitors bringing their own car and this market
has the potential to expand with appropriate marketing
support and attractive fare structures and services. These
visitors have a tendency for longer stays in Ireland and, as
they tend to travel more extensively throughout the
country, they are especially important in terms of tourism
development outside the major tourist areas. While overall
ferry services may be dependent economically on the
carriage of freight, returns on the significant investment in
fast craft will largely depend on premium car and
passenger business. Figure 4.6
Visitors to Ireland ( by Route of Travel) 1998-2002

Source: CSO
0.00
0.50

1.00
1.50
2.00
2.50

3.00

Visits
(
m)

3.50

1998 1999 2000 2001 2002
Air Cross-Channel
Sea Cross-Channel
Continental European
Transatlantic

Figure 4.7 Own Car Visitors 1991-2002

Source: Fáilte Ireland
1,500
1,000

500
0
No.
of
Cars

(
000)

1991 1993 1995 1997 1998 1999 2001 2002
Europe Britain

202
667 799 914 1,026 1,152 1,132 974 966

217 187
187 188 172 135 152 74
74 Page 75 76
54
The 1990s saw steady growth in the number of own car
visitors to Ireland up until 1998, , when it peaked at 1.34
million cars ( an increase of over 70% on 1990) . The
number of British visitors bringing their own car has
remained reasonably constant over the past 5 years in the
region of 1 million visitor cars. In contrast, the number of
Europeans bringing their own car is now at 152,000 a
decline of some 20% since 1998, reflecting the trend for a
greater proportion to travel to Ireland by air and hire cars
on arrival. Trends towards shorter stays, and the increasing
competition from low fares on air services, have combined
to present particular challenges for the ferry operators, but
ferry services will continue to be an important element in
sustaining the Irish tourism industry. The importance of
having in place a competitive ports structure together with
modern reception facilities providing for the comfort and
convenience of passengers is also important.

Internal Air Services
The Cork/ Dublin and Shannon/ Dublin routes are served on
a commercial basis. The public service obligation ( PSO)
regime provides regular links between Dublin and the
regional airports in Kerry, Galway, Sligo, Knock and
Donegal. These are heavily subsidised routes, with an
average subvention of 70 per trip in 2001 and 2002, and
at an estimated cost to the Exchequer of 20 million in
2003. The Irish Government also supports the Dublin/ Derry
service, operated by Loganair/ British Airways, at an
estimated cost of 2 million per annum. While traffic on
the internal air services has increased in recent years
( 260,000 trips in 2002) , due to improved timings and
frequency, the extent of usage by tourists is estimated to be
very low. This is because the services are primarily designed
for domestic and business traffic and they currently lack any
code share arrangements with connecting international
services at Dublin.

4.5 The People in Tourism
The friendliness and hospitality of the Irish people
differentiates Ireland from competitor destinations. The
2002 Visitor Attitude Survey found that 45% of holiday-
makers identified this as the dominant distinguishing
advantage, while one in every two tourists ( 49% ) who said
that their holiday exceeded expectations attributed this to
the friendliness and hospitality they found here.
Unfortunately, the trend in both instances is declining since
1997. This is an issue which needs careful management by

the industry, in terms of impressing on staff, and the wider
general public, the importance of day-to-day interaction
with tourists.

Despite the widespread acknowledgement of the
importance of education and training for the ongoing
development of the tourism sector, and despite the
availability of significant State funding for improvements in
recent years, there has been relatively little direct
involvement or investment by the industry in this area.
A culture of continuous training of staff in the industry has
not traditionally existed and there remains a lack of
structured, systemic training in enterprises. Similarly,
continuing training for managers and owner-managers of
tourism enterprises, in particular in the case of SMEs, is not
at present on a scale that would permit an upward
development shift in the sector. The 2002 Tourism and
Employment Survey found that some 52% of employees
had received formal training the highest levels being in
the restaurant sector ( 75% ) and the lowest in guesthouses
( 33% ) . The final objective of training and human resource
development in tourism must be to improve the quality of
the tourism product offered to customers, to build
productivity and capability in enterprises and to enhance
career prospects for talented and ambitious students and
employees. Given the competitiveness challenges facing the
sector as outlined earlier in this Chapter, there is an urgent
need to improve productivity which can be assisted by
training at both operative and management levels.

A key issue is the relatively low priority given by the
industry to formal educational qualifications. The tourism
sector has traditionally employed a relatively large number
of untrained staff, except in areas requiring specific skills
and in management and supervisory positions. Levels of
professionalism in the sector need to be enhanced, the
status and esteem associated with working in the industry
must be raised, the employment of non-skilled staff
requires to be addressed, and areas where pay and
conditions remain low need to be made more attractive.
Unless this is done across the industry as a whole, the
status and credibility of education and training
programmes will be called into question and students will
believe their qualifications are not valued and will
question their personal investment in preparation for a
career in the industry through education and training.
This will have implications for the considerable investment
in third level educational courses which has taken place in
recent years, leading to lower take-up of places and
higher drop-out rates.

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55
High turnover of staff in the tourism sector, which is not
unique to Ireland, is another challenge facing employers.
It is a particular problem for seasonal attractions, especially
in rural areas, in the restaurant and fast food sectors and in
kitchen and food service departments. The 2002 Tourism
and Employment Survey conducted for CERT found that
23% of the businesses surveyed had vacancies but, in
absolute terms, this was 8,000 jobs or only 3.7% of overall
employment. The majority ( 83% ) of staff in the five sectors
surveyed were employed on a permanent basis up from
73% in 1999 and the hotel sector had the highest
proportion of permanent staff, at 90% . The shortage of
Irish staff has been addressed, in part, by the employment
of overseas workers in increasing numbers. This is a trend
that is likely to continue for the foreseeable future, with the
Irish industry becoming increasingly more dependent on a
more culturally diverse workforce. This has important
implications for training and the maintenance and
enhancement of the traditional Irish welcome.

While there has been significant financial and other support
from the State for the provision of tourism training in
enterprises, it has been somewhat fragmented and has
failed, for the most part, to promote the development of a
structured systemic approach to training in-house. The
fragmented nature of the tourism industry and the
prevalence of small, owner-operated enterprises is part of
the underlying reason for this failure. As part of the new
strategy for Irish tourism, a coherent strategic overview of
the education and training requirements of the industry
needs to be developed as well as a series of actions to meet
these needs. In this context, Fáilte Ireland, working with the
industry, educational institutions and other interested
stakeholders, including students, should:

develop a Human Resource Strategy for the tourism
sector. This should see the industry becoming a
first-choice employer for all who seek employment,
whether this be a career, a full-time job, a part-time
or temporary job, in an industry where people are
facilitated to do their jobs with pride and
satisfaction and where there are opportunities for
progression

as part of the Human Resource Strategy, and taking
into account appropriate manpower planning
issues, develop a National Strategy for Capability
Building in the Tourism sector, as a focus for
strategic planning for education and training

provide a focus for leading, instigating and
influencing the policy instruments and activities,
across the State and private sectors, which will
enhance overall capability building for the industry,
and for the quality assurance, coordination,
facilitation and support of training activity. This will
encompass a variety of interventions, ranging from
quality assurance to programme delivery, and it is
essential that these different interventions be
delivered in an integrated way.

4.6 Marketing and Promotion
Effective marketing and promotion has long been
recognised as a key element of tourism policy and has been
important in building up the customer base of Irish
tourism. Strong consumer research and analysis in key
source markets have underpinned the general marketing
approach and mix of advertising and promotional activities.
Current marketing strategy for the destination of Ireland is
built around Tourism Brand Ireland, a concept which
emerged from within the industry, North and South, with
the assistance of public and EU funding. It is a strategy
which ensures that the branding of Ireland as a tourism
destination is based solidly on research and is carefully
managed to produce a cohesive image of Ireland as a
holiday destination, while recognising the different
characteristics of individual markets.

In the National Development Plan, 2000 -2006, it is
acknowledged that the case for Government funding of
tourism marketing is strong, because of the diversity of
activity within the sector and the proliferation of small and
medium sized enterprises. The provision of 190 million in
Government funding over the life of the Plan for the
establishment and operation of Ireland' s first ever Multi-
Annual Tourism Marketing Fund ( TMF) is the practical
manifestation of that acknowledgement. The fund is
available to finance all-island destination marketing and
niche product marketing, in close consultation and
co-operation with the tourism industry. The funding is
additional to the staff and overhead costs of the Tourism
State Agencies and does not take into account
contributions to Tourism Ireland from Northern Ireland.
Funding is directed towards advertising and media and
trade promotions and the production of promotional
material. Allocations under the TMF to date are set out in
Table 4.7 76
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According to a survey conducted on behalf of the Irish
Tourist Industry Confederation, annual expenditure by the
industry on marketing was estimated at 134 million in
2001 made up of 35 million in advertising, 38 million on
promotional campaigns and brochures, with the balance of
expenditure attributed to marketing staff and associated
overheads.

Given the levels of expenditure allocated to promotion and
marketing activities, it is essential that evaluation of the
efficiency and effectiveness of that spend is undertaken at
regular intervals. The Tourism State Agencies themselves
have systems to review activities and the design of annual
marketing programmes is carried out in consultation with
key stakeholders, most importantly the tourism industry
through the Tourism Marketing Partnership arrangements
outlined in Chapter 2.

In June 2001, the then Department of Tourism, Sport and
Recreation undertook a Public Expenditure Review in respect
of the strategy and outcome of the marketing programme of
Bord Fáilte, over the period 1997 to 1999. The Review
looked at the effectiveness of the spending on the delivery of
the intended benefits in terms of income, employment and
tax revenue. Some key findings to emerge from the Review
were that:

foreign earnings and employment levels significantly
exceeded the national targets set

the average yield per visitor improved over the
three years in all segments other than first time
holiday visitors

relating marketing expenditure to visitor numbers
resulted in an average cost per visitor of 8. A more
detailed breakdown for 1999 showed that the
average cost of attracting
a holiday visitor was 22

a promotable visitor was 19
a first time holiday visitor was 41

the marketing costs associated with attracting visitors
from Germany and France were much higher than
was the case in other key markets

relating total marketing expenditure to total revenue
generated by visitors gave a return of 50 for every
1 spent in 1999.

In terms of recommendations for tourism marketing policy,
the Expenditure Review concluded that the Tourism
Marketing Agencies should be more flexible in market
operations and more responsive to changes in the
marketplace and that targets and performance indicators
should be reviewed to more accurately assess efficiency and
effectiveness of spending with a focus on the promotable
market segments. The establishment of the new all-island
body, Tourism Ireland, provided an opportunity to review
marketing policy and how its effectiveness is measured.

In 2002, Tourism Ireland spent over 30 million on
marketing activity to promote the island of Ireland of
which two-thirds or 20 million was provided by the
Exchequer in the South. The core of this funding was spent
on advertising, which includes TV, radio, print, posters and
co-operative campaigns. The production and distribution of
market brochures to serve the enquiries generated was
another substantial part of the overall marketing spend.

Tourism Ireland undertakes a range of assessments of the
effectiveness of its core marketing activities. For example, the
level of advertising efficiency is measured through consumer
research which seeks to identify the level of recall of people
in particular markets in relation to the Irish tourism
marketing campaign in comparison to the campaigns of
competing destinations.

Quantitative research commissioned by Tourism Ireland in
2003 measured advertising recall at three levels among
Ireland s target market 1 in the top four territories ( Britain, the
US, France and Germany) , namely:

spontaneous ( respondents were asked which
destinations outside their home country in respect of
which they recalled seeing advertising)

Tourism Policy Review Group
2000 2001 2002 2003
Million

18.3 23.2 25.9 30.42

Table 4.7 Exchequer Allocations under the Tourism
Marketing Fund

Source: Department of Tourism, Culture and Sport

1 The target market is broadly defined as all ABC1 individuals who had taken a holiday outside their home country in the last 5 years for longer
than 4 nights. In the US it is further refined to residents of 10 metropolitan areas with European holiday potential. Responses relate to the island of Ireland, north and south.
56 77
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prompted Ireland ( respondents were asked if they
recalled seeing or hearing any advertising for Ireland
recently)

prompted Tourism Ireland ( respondents were read
out the local copy of the advertisements and asked
if they recalled seeing or hearing it) .

The results of the research are set out in Figure 4.8.

Almost one in five ( 19% ) British respondents spontaneously
recalled advertisements for Ireland. When prompted, had
they seen or heard any advertisement for Ireland between a
third and a half of target consumers in Britain, France and the
US recalled seeing or hearing some advertisement for Ireland.
When the Tourism Ireland advertisements were described to
individuals in the markets, more than half of all respondents
recalled seeing or hearing some advertising for Ireland, with
the exception of Germany. The campaign performance was
weaker in Germany as no television advertising was used in
2003, unlike the other three territories.

In comparison to other destination campaigns, Ireland s
campaign had comparatively high levels of competitive
stand-out. Ireland s spontaneous recall was strongest in
France, where the campaign was recalled behind those of
only Morocco and Tunisia. In all four markets, Ireland s
campaign was recalled ahead of that of all other near-
competitors including the British campaign in the US, ,
France and Germany.

In a quantitative study of advertising effectiveness, the
Ireland campaign was rated as more motivating or equally
as motivating as competitor advertising by those who
spontaneously recalled it.

The use of internet-based technologies remains at an early
stage of development across the majority of enterprises in
Irish tourism. Enterprises that have the capability to
effectively use information and communication
technologies in areas such as customer relations
management and marketing will have a competitive
advantage in the future. A range of measures should be
taken by industry and the Tourism State Agencies to help
accelerate the exploitation of these new technologies in
Irish tourism.

4.7 Wider Issues Affecting Tourism Growth
Consultations undertaken by the Review Group have served
to highlight the diversity of the tourism sector and the
range of external factors which impact on its development.
Among the more important policy areas identified are:

macroeconomic policies that enhance the business
environment for tourism ( including central and local
government charges)

issues affecting competitiveness and value for money
air and sea access and internal transport ( including
roads and signposting)

the environment, physical planning, the natural and
built heritage

licensing laws and the proposed smoking ban in the
workplace

education and training.
The ability of the tourism industry, the Tourism State
Agencies and the Department of Tourism, Culture and Sport to
more effectively shape and influence Government policy in
the wider issues that impact on tourism, will be a key
influence in determining the future success of the sector.

In the past, the Government Department and State
Agencies with responsibility for tourism focused on the
development of the sector and policy measures were
concentrated in helping the industry to build up its
strengths in key business areas such as marketing, product
development, standards and training. Such a policy was
appropriate to the development phase of the industry at
that time when it was operating on a much more modest
scale than it is today. However, a wider policy now needs to
be defined and a different and more holistic policy

Figure 4.8 Respondant Recall for Irish Tourism Advertising Respondant Recall for Irish Tourism Advertising
Source: Tourism Ireland
Prompt
Tourism
Ireland

Prompt
Ireland

Spontaneous
Britain France US

59%
11

61%
16

51%
14

27
10
Germany

33%
11

16
6

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58
approach is needed to address the broader issues which will
impact on the future development of tourism in Ireland.
Such a role will require new bilateral structural
arrangements between the Department of Arts, Sport and
Tourism and other Departments, as well as an internal
reorganisation and strengthening of the Department' s
Tourism Division and the support structures within the
Tourism State Agencies.

Such a new role for the Department of Arts, Sport and
Tourism will also require the support of the industry
representative bodies. One of the disadvantages of the
fragmented structure of the tourism industry, with its large
number of SMEs and the diversity of product providers, is
that the value of its economic contribution is not fully
appreciated. Strong industry associations can, through well-
researched and presented proposals, do much to influence
the wider Government agenda in a way beneficial to both
tourism and national development. An enhanced focus on
influencing the wider agenda will require a strengthening
of industry representative structures to more effectively
champion industry interests based on objective,
professional research and industry knowledge.

4.8 Tourism Policy Formulation and Implementation
Responsibility for the formulation of national tourism policy
rests with the Department of Tourism, Culture and Sport.
Current policy for the development of the sector is focused
on supporting sustainable growth in visitor expenditure
with an emphasis on a wider regional and seasonal spread
of business. The Department' s policy goals and strategies
are set out in its Statement of Strategy and its
Departmental Business Plan and reported on in its Annual
Reports. Current Government policy and objectives for the
sector are set out in the Agreed Programme for
Government as already outlined in Chapter 2 of this
Report.

The Department' s focus has been on setting general policy
objectives and targets, determining the annual Exchequer
tourism budget and its allocation, and setting the
framework for the implementation of tourism policy
through its legislative and corporate governance role in
respect of the Tourism State Agencies. Development
strategies for the industry in the past were set out in the EU
Operational Programmes for Tourism which specified a
range of schemes and programmes to address product

development, marketing and training requirements, with
associated national and sectoral targets for the industry.
This position changed in the context of the National
Development Plan, 2000 -2006 when tourism priorities
and investment plans were incorporated over a smaller
range of Operational Programmes covering Productive
Investment, Employment and Human Resource
Development and Regional Development. The current plan
incorporates a programme budget of some 400 million
for tourism, of which only 55 million is being provided
through EU funds.

The tourism industry has been a highly successful sector of
mainly Irish-owned enterprise arguably the most successful
sector of Irish-owned enterprise since the foundation of the
State. As such it has contributed significantly to meeting
national investment, foreign revenue earnings and
employment creation targets under successive tourism
programmes, although the achievement of seasonality and
regionality targets have proved more elusive.

Recent Departmental priorities have focused on a major
restructuring of the institutional arrangements for the
implementation of tourism policy, with the establishment of
Tourism Ireland in 2000 as an all-island tourism marketing
co-operation body under the Multiparty Agreement of Good
Friday, 1998 and Fáilte Ireland under the National Tourism
Development Authority Act, 2003 to bring together
functions previously undertaken by Bord Fáilte and CERT.
Details of the functions now exercised by both bodies are
set out in Chapter 2. Following the reorganisation of
structures at national level, it is essential that an early review
of the functions, activities and interactions of the many
bodies involved in tourism promotion and development at
regional level is undertaken. In the case of the Regional
Tourism Authorities and Shannon Development, a closer
correlation between the identified core visitor servicing and
development functions and the State financial support
provided to them through Fáilte Ireland would be desirable.
This is all the more so given the recent deterioration in the
finances of a number of the Regional Tourism Authorities
due to the reduction in visitor numbers using their services
and rising costs.

The concept of a synergistic and mutually beneficial
approach to developing tourism on the island of Ireland
has evolved since the late 1980s. The establishment of
Tourism Ireland, as an all-island tourism destination
marketing body, is a logical progression of these
developments to the benefit of the economies of the

Tourism Policy Review Group 79
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59
island, North and South. While North/ South co-operation is
most advanced in the area of international marketing, it
also operates beneficially to the tourism industry at many
other levels. The principal policy challenges are to sustain
and grow the more mature parts of the industry on the
island while supporting the economic and regional
development policies of both jurisdictions which seek to
improve the socio-economic well being of less successful
tourism regions.

The overall thrust of the new Strategy for Irish Tourism set
out in this Report supports the principle of North/ South
co-operation. It will be a key aim of the Department of
Arts, Sport and Tourism, together with Fáilte Ireland, to
work with its Northern counterparts and Tourism Ireland on
areas of mutual benefit. A particular challenge will be to
bed down the new structures and to ensure clarity of focus
and responsibility for each body. It is expected that this
approach will be mirrored through the evolution of the
already strong industry links that are in place. Tourism has
been clearly identified as a mutually advantageous
opportunity for both jurisdictions with clear economic and
social benefits for both communities. The principal aim will
be to deliver on the potential manifested by the successful
co-operation which has evolved over many years.

In the case of Fáilte Ireland, the policy challenge will be to
integrate the former activities of Bord Fáilte and CERT to
create a new dynamic development body to help address
the new challenges facing the tourism sector and to
capitalise on the new opportunities opening up as set out
in this Report.

The policy formulation and implementation role of the
Department is set to change in the light of the new
strategy for the development of tourism set out in this
Report and in line with the new emphasis on influencing
the wider agenda. A tightening in the public finances will
also require a greater emphasis on the efficiency and
effectiveness of Exchequer tourism expenditure. The
Department will also continue its long-standing policy of
working in partnership with the tourism industry in the
further development and implementation of policy.

4.9 Overview/ Conclusions
The Irish tourism industry today has strong foundations
based on a substantial customer base, high overall
customer satisfaction ratings, competent and experienced
staff and the quantity and quality of its capital stock. The
industry represents what is, arguably, the most successful
sector of Irish-owned enterprise since the foundation of the
State. In becoming so, it has achieved the challenging
investment, revenue earnings and employment targets set
for it, in the past, under successive national plans and EU
Operational Programmes for Tourism. These significant
achievements provide a solid base to address with
confidence the new challenges facing the tourism sector.

The industry is, today, at an important turning point in its
evolution. The strong competitiveness gains achieved during
the 1990s have been eroded in more recent years. Unless
the industry, defined to encompass both its private and
public sector components, takes strong and immediate
action to regain competitiveness it will regress in the years
ahead. However, if corrective actions are taken with
resolution and efficiency, significant opportunities exist, in
the context of the anticipated strong growth in international
tourism in the years ahead, to build upon, and even surpass,
the major success story of Irish tourism in the 1990s.

The industry faces major challenges in regaining its
competitiveness in the light of reducing customer
satisfaction ratings, in particular as regards delivering good
value for money. For visitors, the price issue relates not so
much to the cost of access and accommodation, which is
generally pre-booked, but to the price of eating out, drink,
food in shops and the general cost of living when they get
here. While actions at Government level are necessary to
address price inflation generally, the tourism industry itself
has the primary role and responsibility for driving down
costs in the industry. Reforms in the Irish taxation system
have resulted in substantial gains to business generally but
comparatively high VAT rates and excise duties exacerbate
price differentials with other eurozone countries and pose a
competitive difficulty for Irish tourism. High insurance costs
are also a particular concern and there is an urgent need to
accelerate the Government' s insurance reform programme
to reduce premiums. 80
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60
The range of tourism products and services, including
tourist accommodation, has improved significantly in terms
of quantity and quality but there are indications of
underutilised capacity and falling margins which could
threaten reinvestment and the maintenance of standards in
the future. Some remaining gaps exist in tourism
infrastructure, most importantly the development of a
National Conference Centre and a National Sports Stadium,
as well as an enhanced emphasis on the environment,
product innovation and the packaging and promotion of
tourism products to meet changing customer requirements.
While air and sea access to Ireland has seen major
improvements during the 1990s, additional visitors could
be attracted through changes in transport policy and the
further development of access infrastructure.

People are essential to the future development of the sector
and a greater level of investment is needed in human
resource development to upgrade skill levels to integrate
new entrants from home and overseas, and to address staff
retention and other problems. While a strong funding
commitment remains to tourism marketing and promotion
by the State and the tourism industry, there is scope to
improve the efficiency and effectiveness of spend in this
area. The ability of the tourism industry, the Tourism State
Agencies and the Department of Tourism, Culture and Sport to
more effectively shape and influence policy in the wider
issues that impact on tourism, will be a key influence in
determining the future success of the sector. The
Department' s policy formulation and implementation role
will need to be developed and strengthened in line with
the new strategy set out later in this Report.

Tourism Policy Review Group 81
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62
Tourism Policy Review Group
A Strategy for Irish Tourism 2003 -2012
The New Vision for Irish Tourism is that of a
dynamic, innovative, sustainable and highly-
regarded sector offering overseas and domestic
customers a positive and memorable experience
beyond their expectations. Assuming reasonably
favourable international economic and geopolitical
circumstances, the Review Group has set a
challenging target to double overseas visitor spend
to 6 billion over the 10 year period to 2012, with
an associated increase in visitor numbers from just
under 6 million to 10 million.

5 chapter five 83
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63 84
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64
Tourism Policy Review Group
Summary of Main Conclusions
Irish tourism requires a new strategy to chart the way forward at a pivotal point in
its evolution.

The Review Group s vision for Irish tourism is that of a dynamic, innovative,
sustainable and highly-regarded sector offering overseas and domestic visitors a
positive and memorable experience beyond their expectations.

The medium and long-term prospects for tourism worldwide remain strong and,
over the next 20 years, are projected to be similar to the doubling of tourist traffic
that occured over the period 1980 -2000.

Central to the future success of Irish tourism will be a recovery of the
competitiveness that has been lost in recent years and a capability to respond with
flexibility and agility to changes in the market place.

Assuming reasonably favourable international economic and geopolitical
circumstances, the Review Group has set a challenging target for Irish tourism to
double overseas visitor spend to 6 billion over the ten year period to 2012, with
an associated increase in visitor numbers from just under 6 million to 10 million.

The key strategic drivers of success for Irish tourism in the future will be the
business environment, competitiveness and value for money, access transport,
information and communication technologies, product development and
innovation, marketing and promotion, the people in tourism, the Government
sector and information, intelligence and research.

A clear decision-making process and implementation plan is needed to provide
focus and give credibility for the new tourism strategy outlined in this Report, to
review performance in changing circumstances, to drive forward on the specific
actions recommended and to report on outcomes. 85
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65
5.1 The Components of a New Tourism Strategy
In the early years of a new century characterised by major
changes and turbulence in the global geopolitical and
economic systems, Irish tourism requires a clear strategy.
Such a strategy is set out in this Chapter. It takes account
of the fundamental changes in the environment now
affecting Irish tourism at home and abroad and
encompasses the following components.

Vision It provides a clear articulation of what
tourism can contribute to the achievement of
national social and economic objectives.

Forces of Change It identifies the fundamental
changes affecting international and domestic
tourism at present and provides an assessment of
the key changes likely to occur in future years.

Targets and Objectives It establishes challenging
but realistic targets and objectives for the sector.

Future Drivers of Success It identifies the factors
that will determine success or failure in achieving
the targets and objectives.

Flexibility/ Agility It emphasises the importance of
an enhanced capability for the different operators
within the industry to respond in agile and
innovative ways to unforeseen changes in the
industry.

Decision-making Framework It provides a clear
framework within which good investment and
resource allocation decisions by private sector and
public sector participants in tourism can be
encouraged and facilitated.

5.2 Inter-dependency of Activities A Defining Characteristic of Irish Tourism
Irish tourism is a complex, diverse sector of economic
activity. It supports some 140,000 jobs in a range of sectors
including hotels, guesthouses, B& B establishments, hostels,
self-catering establishments, restaurants, public houses and
visitor attractions in the areas of heritage, culture, sport and
entertainment, as well as the many other jobs that are
dependent on tourism in other sectors such as the airlines,

shipping services, ports, airports, car-hire, coach-hire and
public transport. It also encompasses important areas of
activities in tourism-related Government promotional,
supervisory, regulatory, training, educational, research and
information services. The new strategy for Irish tourism set
out in this Chapter, accordingly, provides a coherent
framework within which the different parts of the industry
operate to create a development dynamic that is greater
than the sum of the individual parts. The inter-dependency
of the different segments of the industry is a defining
characteristic that requires to be reflected in national
tourism strategy.

5.3 A New Vision for Irish Tourism
The Review Group proposes the following New Vision for
Irish Tourism.

Vision for Irish Tourism 2003 -2012
Ireland will be a destination of choice for discerning
international and domestic tourists which:

provides a tourism experience that exceeds customer
expectations in terms of friendliness, quality of
environment, diversity and depth of culture

has a range of high quality, world-class, competitive
products and services widely distributed throughout
all the regions of the country

is a vibrant source of foreign and regional earnings
throughout the year

respects the natural and built environments and
supports their conservation and enhancement

provides attractive career opportunities in tourism for
people with a range of skills and employment needs

provides the opportunity for people working in
tourism to enhance their skills through experience,
training and life-long learning

respects and supports Irish culture in all its diversity
provides a positive international profile of Ireland. 86
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66
In short, the Review Group' s vision for Irish tourism is that
of a dynamic, innovative, sustainable and highly-regarded
sector that offers to overseas and domestic customers an
experience of Ireland which is positive, memorable and
beyond their expectations. The objectives are to see
customers of the tourism experience in Ireland repeat that
experience and to communicate it positively to friends and
acquaintances. And in meeting these objectives Irish
tourism should be seen as a major source and opportunity
for profitable enterprise and as a powerful tool of social and
economic development at national and regional levels.

5.4 Irish Tourism Forces of Change
Future Prospects The fundamental changes affecting
tourism internationally and in Ireland at present and as
anticipated in the future were outlined in earlier Chapters
of this Review. In summary, the medium and long-term
prospects for tourism worldwide remain strong despite the
fall-off from the long-term high growth trends since 2000.
Over the next twenty years it is anticipated that the growth
in international tourism will be similar to the doubling in
tourist traffic that occurred over the period 1980 -2000.
Tourism development will continue to be largely
determined by the rate of global and regional economic
growth and associated increases in the disposable incomes
of a wide distribution of individuals. The developed
countries will remain the strongest source and destination
of tourist numbers in absolute terms. But, from modest
beginnings, Eastern Europe and the Far East especially
China will claim an increasing share of the origin and
destination of international tourists including those who
may consider Ireland for a holiday.

Tourism Policy Review Group
Figure 5.1 The Components of Tourism Strategy 2003-2012
Forces of Change
Fundamental Changes Affecting Global &

Domestic Tourism

Future Drivers of Success
Competitiveness and Value for Money, Product, People, Marketing,

Technology, Access Transport & Business Environment

Flexibility
Agility to respond to change
Decision-making Framework
Improved Resource Allocation

Tourism Strategy
2003 -2012

Targets & Objectives
Motivators Benchmarks of Performance

Vision
Contribution to National Social & Economic Objectives 87
87 Page 88 89
67
Key Geographical Markets for Ireland For Ireland the
tourism markets of most importance will continue to be in
Britain, the US, the larger countries of Mainland Europe and
the domestic market. There are prospects of increased
visitor numbers to Ireland from the Far East, Australia and
other markets but, while important, these will continue, in
the short to medium-term, to account for a small
proportion of overall visitor numbers and revenue.

Changes in Customer Profile In each of Ireland s main
markets for tourism, however, the customer profile has
been changing rapidly and will continue to do so driven by
technology, demographics ( e. g. an increase in the older
people share of the population in developed countries) and
societal changes. Such societal changes include better
education, increasing interest in cultural experiences,
increased leisure time, multiple but shorter holiday breaks
throughout the year, greater interest in health-enhancing
tourist experiences and increasing empathy with
environmental conservation.

Transport Developments in access transport and in internal
transport are of fundamental importance in facilitating
tourism development. These are also undergoing
fundamental changes and will continue to do so in terms of
technology, organisation and provision of services. The
quality, price, frequency and routes of air and sea carriers
are clearly of major importance to an island tourism
destination such as Ireland. Transport services to and from
Ireland, particularly to and from Britain and some parts of
Mainland Europe, have greatly improved over the past ten
years and more. In doing so, they have made a significant
contribution to the strong growth in visitor numbers to
Ireland during the 1990s. In particular, low fare airline
services have transformed the market for travel between
Ireland, Britain and some parts of Mainland Europe and the
potential for additional route development remains strong.

Developments on transatlantic air routes have also shown
some improvements but to a lesser extent than on cross
channel and Mainland European routes.

Internal transport is particularly important for the regional
spread of visitors. Rapid economic and population growth
and major increases in visitor numbers in certain areas have
given rise to congestion problems that are causing
difficulties for the quality of the tourism experience. These
problems are being addressed through a major
Government investment programme in road and rail
infrastructure. The programme is, however, some distance

behind schedule because of project management and
planning administration difficulties and because of the
erosion of resource allocations to the programme by cost
inflation.

Technology Apart from the significant changes in
technology affecting both access transport and internal
transport, the other great technological driver of change in
the tourism industry lies in the rapid development of
information and communication technologies. Information
and communication technologies profoundly affect the way
that tourism business is conducted. Their impact is evident
in the areas of competition, marketing, customer relations
management, reservations, room/ accommodation
utilisation and optimisation, cash-flow management and
the delivery of tourism related education and training
services. Measures to optimise the use of these technologies
throughout the sector as they exist at present, and as they
continue to evolve, must be a central part of Ireland s
tourism strategy.

5.5 Strategic Targets for Irish Tourism 2003 -2012
The Nature of Targets
Ambitious but realistic targets for key indicators of
performance are an essential component of Irish tourism
strategy. These targets must relate to the fundamental
objectives of tourism policy. Such objectives are explicitly
concerned with sustainable national wealth creation and
regional distribution. Targets need to be few in number in
order to maintain a sharpness of focus in relation to the key
factors that determine the performance of Irish tourism.
They must seek also to capture the essence of the
contribution the sector makes to social and economic
objectives in Ireland, at both national and regional levels,
and to measure that performance against internationally
relevant benchmarks.

Strategic targets, while not forecasts, provide a sense of
direction for tourism policy and they facilitate the
prioritisation of actions to support the development of the
sector. Performance targets must not, however, become
inflexible straitjackets it can be expected that many
outcomes will be out of line with targets because of
changing circumstances, and that targets will need to be
adjusted. It should be understood that targets reflect
assumptions about the future course of the underlying 88
88 Page 89 90
68
factors that affect tourism development. At the core of these
underlying factors, as far as Irish tourism is concerned, are
the rate of economic growth in Ireland and in the main
markets in which it competes and the overall sense of
security, or otherwise, arising from geopolitical events.

The strategic targets for Irish tourism set out in this Chapter
also provide the higher-level benchmarks that can be used
by private sector operators and the Tourism State Agencies,
at national and regional levels, to develop detailed
operational targets. In setting targets it is important to
distinguish the segments of visitors that are most likely to
be influenced by the marketing activities of industry
operators and the Tourism State Agencies defined as the
promotable segments.

Strategic Target Areas for Irish Tourism 2003 -2012
Taking considerations discussed in previous paragraphs into
account, the following are the strategic areas for which
quantitative targets are being set.

Strategic Target Areas for Irish Tourism 2003 -2012
Tourism Revenue
Overseas
Domestic
Overseas Visitor Numbers
Total
Promotable Segment
Domestic Holiday Numbers
Regionality

The following paragraphs set out specific targets for each of
these areas. The main underlying assumptions, on which
these targets are based, are as follows:

average annual economic growth rates in Ireland s
main tourism markets ( Britain, US, Mainland
Europe) over the next decade will, on average, be
broadly similar to that of the 1990s

the rates of growth, and the time period in which
they are attained, will vary from one market to
another as they are dependent on rates of
economic recovery in these markets,
developments in air and sea access and the
capability of the tourism industry in Ireland to
reverse the recent deterioration in customer
satisfaction in value for money

the average annual rate of GDP growth in Ireland
will be 5% a year

international geopolitical stability will recover to a
level broadly similar to that of the 1990s.

Total Overseas Revenue and Visitor Number Targets
2003 -2012

Overseas visitors account for over two-thirds of the bed-
nights and over 80% of the revenue earned in Irish tourism.
In the light of the analysis set out earlier in this Report, the
Review Group believes that overseas revenue can be
doubled to 6 billion and visitor numbers can be
increased, from just under 6 million in 2002 to 10 million,
by 2012. The targets for this segment of tourism are set out
in the following tables and associated charts.

Tourism Policy Review Group

Revenue ( million 2002 prices) 2002 Actual 2006 Target 2012 Target Av. Annual Growth % 2002-2012
Overseas Visitor Spend 1 3,088 3,835 6,000 6.9%
No. of Visitors ( m)
Britain 3.5 4.1 5.5 4.8%
Mainland Europe 1.4 1.7 2.3 5.3%
North America 0.8 1.0 1.8 7.6%
Other areas 0.2 0.3 0.5 6.3%
Total 5.9 7.0 10.0 5.4%

Table 5.1 Overseas Revenue and Visitor Number Targets to 2012

1 Excluding receipts paid to Irish air and sea carriers & revenue from Northern Ireland vistiors 89
89 Page 90 91
69
Promotable Overseas Visitor Targets 2003 -2012
The promotable segments of visitors from overseas countries
comprise the potential visitors most likely to be influenced
to visit Ireland by the marketing activities of industry
operators and the Tourism State Agencies. The promotable
segment constitutes those visiting Ireland primarily for
holiday, conference, language study and incentive travel
purposes ( for example, the provision of travel packages to
reward employees or business partners for work
performance) . An important reason for focussing on the
promotable market segments is that those segments
generate greater revenue per capita than, for example,
those who stay with friends and relatives. In 2002, the
promotable segments accounted for 45% of total visitors.

The Review Group believes that a target should be set to
increase this share to 50% by 2012. Specific targets for the
promotable segments, by main market, are set out in the
following table and associated chart.

Figure 5.2 Overseas Visitor Revenue Targets to 2012 ( 2002 prices) Overseas Visitor Revenue Targets to 2012 ( 2002 prices)

2000 2006 2012
Overseas Visitor Spend

1,000
2,000

3,000
4,000 ( m)

5,000
6,000

7,000

Figure 5.3 Overseas Visitor Number Targets to 2012 Overseas Visitor Number Targets to 2012
No.
of
Visitors

(
m)

2000 2006 2012
North America
Other areas
Britain
Mainland Europe

0
1
2

3
4

5
6

Table 5.2 Promotable Overseas Visitor Number Targets to 2012
No. ( m) 2002 Actual 2006 Target 2012 Target Av. Annual Growth % 2002-2012
Britain 1.3 1.5 2.2 5.5%
Mainland Europe 0.7 0.9 1.3 5.8%
North America 0.5 0.6 1.1 7.9%
Other areas 0.1 0.2 0.3 6.6%
Total 2.7 3.3 4.9 6.2%
% of All Visitors 45% 46% 50%

Figure 5.4 Promotable Overseas Visitor Number Targets to 2012

Number
of
Promotable Visitors ( m)

2.5
2.0
1.5
1.0
0.5
0.0
2002 2006 2012

Mainland Europe
Other areas
Britain
North America 90
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70
Domestic Holiday Targets 2003 -2012
The domestic market is of key strategic importance to the
development of tourism in Ireland. Domestic tourism trips,
involving at least one overnight stay, numbered almost 6
million in 2002. Almost 50% of these trips were for holiday
purposes while a further 40% related to the visiting of
friends and relatives. The domestic market is important not
only in terms of size but is also a major instrument in the
regional distribution of tourism visitors and revenue. It is
characterised by a significant flow of visitors from the main
urban areas to the less developed regions including from
east to west. It, also, plays a major positive role in
extending the seasonal distribution of tourism. It
contributes over 50% of the bednights in hotels, one-third
of the demand in guesthouses and B& B establishments and
accounts for some 25% of visitor demand on golf courses.
Finally, a discerning, discriminating and demanding
domestic market can strongly influence better
developments in the price, quality and range of tourist
services and, in doing so, help increase standards and
competitiveness in the industry.

The most promotable segment of the domestic market is
the segment for holiday trips. The visitor and revenue
targets proposed by the Review Group in this area are set
out in the following table and associated chart.

Regional Targets 2003 -2012
The regional distribution of tourism is highly important for
a number of reasons. At a very basic level the tourism
product is distributed geographically. Developing,
facilitating and promoting access to that product is at the
very heart of tourism policy in Ireland. The tourism
product and associated visitor potential is not, of course,
distributed evenly throughout the country. Different areas
are more or less attractive to tourists depending on the
characteristics of their natural and built environment, ease
of access and competitiveness relative to other locations
in Ireland and overseas. An important determinant of
regional performance is the effectiveness and the spirit of
innovation of both tourism operators and promotional
bodies at local level.

Government policy strongly supports balanced regional
development as set out in the National Spatial Strategy
published in 2002. Tourism represents one of the strongest
means by which balanced regional development can be
achieved. Accordingly, a fundamental objective of tourism
policy must be to facilitate each tourist region in achieving
its full potential for tourism development in a way that
maintains and enhances the sustainability of its tourism
base. This will mean different rates of tourism growth in
different areas of the country.

For regional development purposes, Government policy has
placed specific emphasis on the need to promote
development in the Border Midland and Western ( BMW)
Region. Accordingly, the Review Group considers that a
doubling of the number of overseas promotable visitors
staying at least one night in the BMW region be set as a
target over the period to 2012.

Tourism Policy Review Group
Table 5.3 Domestic Holiday Targets to 2012
2002 Actual 2006 Target 2012 Target Av. Annual Growth % 2002-2012
No. of Holiday Trips ( m) 3.0 3.6 4.3 3.7%
Revenue from Holiday
Trips ( b) 0.6 0.8 1.0 4.4%

Figure 5.5 Domestic Holiday Revenue Targets to 2012 Domestic Holiday Revenue Targets to 2012
Revenue
(

1.2
1.0
0.8
0.6
0.4
0.2
0.0
2002 2006 2012 91
91 Page 92 93
Attaining this target will represent a considerable
achievement, particularly in the context of an increasing
share of visitors to Ireland taking short breaks which tend
to favour established tourist areas outside the BMW region.
As set out earlier in this Report, domestic visitors represent
a major contribution to regional tourism and the
promotion of this segment will remain a central element of
tourism strategy for regional development purposes.

5.6 Future Drivers of Success
Irish tourism is a highly diverse and complex sector. It
includes a wide range of operators from both the private
and public sectors. The combined actions of these
operators are what determine the success of Irish tourism
relative to that of other countries and relative to the vision,
targets and objectives discussed in previous paragraphs of
this Chapter. The key strategic drivers of success for Irish
tourism may conveniently be discussed under the following
headings

Key Drivers of Success
Business Environment
Competitiveness & Value for Money
Access Transport
Information and Communication Technologies
Product Development & Innovation
Marketing & Promotion
The People in Tourism
The Government Sector
Information, Intelligence & Research

The strategic contribution and requirements of each of
these areas is discussed in the following paragraphs. The
success of Irish tourism, within any particular international
environment that emerges, will depend on the
development and implementation of an integrated set of
well-formulated tourism promotion actions across each of
these areas.

Strategic Success Driver 1 Business Environment
The main driving force behind the major success of Irish
tourism over the past 20 years has been private sector
enterprise involving thousands of mainly small business
entities spread across all parts of the country. As already
indicated in this Report, the tourism sector represents the
most important and successful sector of Irish-owned,
internationally-trading, enterprise since the foundation of
the State something that is not always fully appreciated
and acknowledged.

The Government sector has played an important,
supportive and catalytic role in the success of the industry.
This role has been exercised directly in the form of financial
support, promotion and marketing, education and training,
research, information provision and the maintenance of an
economic and general policy environment supportive of
business investment. This has included significant reform of
the taxation regime which is now highly supportive of
business development and internationally competitive in
the areas of corporation tax, capital gains tax, income tax
and social security contribution rates. It has been exercised
indirectly through investment in tourism related
infrastructure and State-owned tourist visitor attractions.

The ultimate determinant of success in Irish tourism will
continue to be an energetic, innovative and profitable
private sector. This will require a domestic environment
where Government policies are supportive of business
investment in tourism and provide economic and
regulatory certainty in an increasingly volatile and
demanding internationally competitive environment.
Accordingly, maintaining the profitability of tourism
investment relative to alternative investment opportunities
in Ireland and abroad is an important and central objective
of tourism strategy. Achieving this objective will be
facilitated by a range of Government policies that enhance
the business environment for tourism. Some of the key
strategic requirements are as follows.

Table 5.4 Regionality Target to 2012
million 2002 Actual 2006 Target 2012 Target Av. Annual Growth % 2002-2012
No. of Promotable Tourists to BMW Region 0.8 1.0 1.6 7.5%

BMW share ( % ) of all promotable tourists 30% 31% 34%

71 92
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72
Government Policies Required to Enhance the Business
Environment for Tourism

Promote competition within tourism, within the
provision of tourism-related services and more
generally across the economy.

Ensure pro-competition regulation in tourism-
related services where free competition does not
prevail at present including in the area of services
provided by both the private sector and by
Government bodies.

Provide for competitive rates of direct and indirect
taxation on tourism related activities.

Use Government instruments of economic policy
including taxation, expenditure, charges for
Government services and social partnership
negotiations to keep inflation under control and
below the eurozone average.

Address urgently the factors that are generating
high absolute levels of, and high rates of increase in,
insurance costs for tourism enterprises as identified
in a number of analyses and recommended actions
already undertaken and identified, by the
Government.

Support the provision of essential tourism-related
infrastructure in areas where the potential returns to
private sector investors are below market rates.
Examples include a National Conference Centre, a
National Sports Stadium, roads and rail facilities at
points of international air and sea access and
tourism-attracting facilities in the less developed
tourism areas of the country.

Strategic Success Driver 2
Competitiveness & Value for Money

Competitiveness can be defined as the degree to which
Irish tourism can produce and deliver services to overseas
and domestic customers so that its share of international
markets is maintained and expanded while, at the same
time, the real incomes of people working in tourism are
maintained and increased in line with other sectors of the
economy.

The competitiveness of Irish tourism derives from a wide
range of factors. The price paid for tourism products and
services is one important factor but it is not the only one.
For each individual customer of Irish tourism the perception
of competitiveness is a function of total experience relative
to other alternative tourist destinations. It encompasses the
point of initial contact with Ireland as a potential tourist
destination, the transport services used in getting to and
from Ireland, travelling within the country, the quality of
product and of services experienced and a host of
intangibles which shape the perception of visitors in
relation to Ireland.

Competitiveness is not always easy to measure but the
systematically recorded views and perceptions of visitors
and trends in market share are reasonable, first cut
indicators of competitive performance.

By any standards the competitiveness of Irish tourism over the
period 1990-2000 was extremely good. Over that period:

the total number of overseas visitors doubled to
6.3 million

surveys conducted indicated that the holiday
experience of visitors consistently met or exceeded
expectations of well over 90% of visitors

Ireland s share of visitors from main markets in
Britain and the US increased.

These positive trends were helped by a relative fall in the
value of the Irish currency over that period against sterling
and the US dollar and by the significantly increased
availability of EU and Exchequer funds for product
development and promotion purposes. It is highly unlikely
that either of these factors will be replicated over the
coming decade.

The current position in relation to the competitiveness of
Irish tourism is less satisfactory as highlighted earlier in
this Report.

Since 2001, visitor surveys indicate a strongly
increased level of dissatisfaction on the part of
overseas visitors with their holiday experience in
Ireland in terms of value for money, although overall
satisfaction ratings remain high across most other
factors. In 2002, 55% of overseas visitors considered
that they did not receive good value for money.

Tourism Policy Review Group 93
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73
The 2003 survey undertaken on behalf of Forfás and
the National Competitiveness Council of price trends
in Ireland relative to other countries in the eurozone
shows that Ireland ranks at present as the second or
third most expensive country in Europe in terms of
prices in pubs and restaurants. Pubs and restaurants,
of course, form an important element of the tourism
experience in Ireland. Price deterioration in Ireland
relative to other eurozone countries has been on the
increase since the mid 1990s and is, increasingly, a
cause of negative comment on the part of visitors
and domestic tourists.

2002 saw the first deficit in recent history in the
balance of payments in tourism receipts for the
Irish economy as more Irish people holidayed
outside Ireland. Increased overseas travel on the
part of the inhabitants of any country is an
indication of its relative prosperity and the demand
for overseas holidays by Irish tourists is mainly
driven by increasing income levels. Nevertheless, it
is undoubtedly the case that the decisions of many
Irish holidaymakers to holiday overseas rather than
at home have been strongly influenced by the
relative deterioration in the price competitiveness
of Irish holidays in recent years.

Addressing the recent deterioration in competitiveness is a
major challenge for Irish tourism strategy. Tourism strategy
must therefore address a range of factors, both at the level of
the firm and that of Government, that determine the overall
competitiveness of the Irish tourism product. These factors
include the quality of product and of service, the availability
of new products and services, the price and quality of access
transport both external and internal and the professionalism
and skill levels of the people in tourism and the efficiency with
which they conduct their business. The strategy should also
address the impact on the competitiveness of tourism of
Government actions across a range of functional areas ( e. g.
education, training, taxation, transport, environmental
conservation and physical planning) .

Strategic Success Driver 3 Access Transport
Good access transport to and from external and internal
locations is of primary importance to the development of
tourism. The main developments in this area from the
perspective of tourism have already been summarised in
the Forces of Change paragraph and set out in more detail
in earlier Chapters.

Looking to the future, Ireland s national transport strategies
must encompass a number of fundamental requirements in
relation to tourism as set out below.

Strategic Transport Requirements of Tourism Strategy
The quality, price, frequency and route access of air
and sea transport to and from Ireland must be at
least as good as that available to potential visitors in
the case of other locations, taking distance and
market size into consideration.

Full and fair competition in transport services and in
the provision of the underlying infrastructure
services at air and sea ports should be the preferred
approach in meeting the objectives of quality, price,
frequency and route access that best meets the
needs of Irish tourism.

Any diminution in a strong competitive
environment should be accepted only where
compelling reasons exist and then only in the
context of a strong regulatory framework which
ensures costs and services are bench-marked
against, and maintained at least at par with, best
international practice in the locations against which
Irish tourism competes.

Good internal transport and services ( road, rail, bus)
are essential components of a national tourism
strategy. Government plans in place to address
these requirements are ambitious and well-
formulated. However, the project management,
planning, administration and cost inflation problems
which are undermining these plans need to be
addressed as a matter of urgency. 94
94 Page 95 96
Strategic Success Driver 4 Information and
Communication Technologies

Developments in technology will continue to drive
significant change in tourism, particularly in the areas of
transport services and the provision of information and
communications. The importance of information and
communication technologies has become more evident
throughout the industry and more widely. This impact will
intensify in the years ahead and will affect a number of
areas as set out below.

Information & Communication Technologies Main
Areas of Impact on Irish Tourism

Customers/ Potential Customers
Customer Relations Management ( CRM)
Competition
Promotion & Marketing
Networking
E-Commerce Transactions
Management Operations
Education & Training

Considering each of these areas briefly the following future
trends can be identified.

Customers/ Potential Customers Customers will
increasingly wish to interact directly with tourism
operators through internet based technology, with
consequences for existing planning and booking
arrangements through travel agents and tour
operators.

Customer Relations Management ( CRM) CRM
based on the use of internet technologies holds major
potential for sectors such as tourism where customer
contact is direct and intense and its base is dispersed.
Its use is becoming common in a number of sectors
including the retail sector, in magazine and
newspaper industries and in many sectors of
manufacturing industry. In tourism it is also
developing but so far has been confined mainly to the

larger hotel and transport groups. This will change in
the years ahead as internet based CRM is rolled out
more widely.

Competition Competition for tourists/ visitors will
increasingly take place through information and
communication technologies. Potential customers will
use the technology to seek information and compare
prices and locations. They will increasingly seek to
undertake booking/ reservation and payment
transactions through the internet.

Promotion & Marketing The new internet based
technologies provide a powerful new instrument of
marketing and promotion for individual tourism
operators and for the Tourism State Agencies. The
effectiveness with which the opportunities arising are
addressed will, increasingly, become a source of
competitive advantage, or otherwise, for both
individual operators and for tourist destinations.

Networking Information and communication
technologies provide an opportunity for the mutual
beneficial sharing of information and data between
operators in tourism and between these operators and
the Tourism State Agencies. Such networking
arrangements are in the early stage of development
but they hold considerable potential for improved
monitoring and delivery of tourism strategy.

E-Commerce Transactions Internet based
technologies will be used increasingly in the tourism
industry and will allow for considerable improvements
in cash management by tourist operators.

Management Operations Internationally within
tourism establishments, the use of information
technologies has started to transform operations in
areas such as finance, stock-control and personnel
operations. Effective use of these technologies can
generate considerable efficiencies. Again larger
operators are the main users of these technologies for
internal management purposes but this will change as
internet based skills become more common in the
population and the relative cost of the associated
technologies and software falls.

Education & Training The use of internet based
technologies in the tourism industry for training and
education purposes is still in its early stages of
development. This will change as the technologies are

Tourism Policy Review Group

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particularly useful for on-the-job training in a sector
where atypical working hours are the norm.

The use of internet based technologies remains at an early
stage of development across the majority of operators in Irish
tourism. The level of skills available within the industry and
the sectors that support it are low. A major challenge for
tourism strategy is to address these weaknesses and to
achieve the widespread adoption of internet based
technologies across all segments of the industry. This will be
a key task for industry operators individually, for their
representative support bodies and for the Tourism State
Agencies.

Strategic Success Driver 5
Product Development & Innovation

The product base of Irish tourism is highly diverse. It
encompasses the natural and built environment including
accommodation, restaurant and visitor attractions. There has
been very significant investment in the capital stock of Irish
tourism over the past ten years facilitated by EU and
Government financial support, attractive taxation incentives
and a low interest regime in more recent years.

In the case of the natural environment the emerging position
includes both positive and negative features. On the positive
side there is widespread acceptance of the importance of
good management and conservation practices in
maintaining and enhancing the attractiveness of both the
built and the natural environment. These consistently rank at
the top of the list of factors that attract visitors to Ireland. On
the negative side rapid economic and population growth,
increased car-ownership and the strong increase in visitor
numbers have generated a number of substantive problems.
These give rise to congestion in both urban areas and in the
more important, non-urban, visitor attraction destinations.
They have also resulted in inappropriate development in
sensitive areas of the natural and built environment, and
waste management systems in a number of areas which are
inconsistent with modern day standards and the green image
of Ireland, and an unsustainable tolerance of low
environmental standards and litter by too many people in
our society.

The strategic challenge for Irish tourism over the next ten
years in the area of product development lies in maintaining
and enhancing the quality of the capital stock and in
managing the natural and built environment in ways that
maintain and enhance their attractiveness for the benefit of

domestic and overseas visitors. There is a need for a far
stronger product innovation capacity in Irish tourism to meet
the changing needs of a more discerning customer base
whose product requirements and choice of destination are
becoming more varied. The potential customers for which
Irish tourism compete, increasingly seek a holiday which
enhances personal experience in terms of characteristics such
as personal well being, new life-enhancing experiences, new
cultural experiences and indeed experiences generally which
they consider unique to their individual requirements.

Strategic Success Driver 6
Marketing & Promotion

Effective marketing and promotion are an essential element of
tourism strategy and a major part of the complex of factors
that determine the achievement of targets. Clearly the main
responsibility for marketing and promotion rests with the
industry itself and its individual enterprises. The scope for joint
and complementary marketing and promotion between
enterprises is also significant. Such co-operative marketing has
increased in recent years and there is both a need and an
opportunity to build on this both on an all-island basis and in
each of the jurisdictions. With the advent of e-sales and
internet marketing, there will be greater need and scope for
individual firms to significantly develop their own marketing
and sales capability than has been the case heretofore.

Because of the dominance of small scale establishments and
the importance of tourism to national and regional
development, the case for significant State involvement in
marketing and promoting the industry, in close consultation
and cooperation with tourism operators, is also strong. State
participation is essential in the generic task of marketing and
promoting Ireland as a destination for overseas visitors, using
modern promotional strategies based on a strong brand
image. It is also essential in the marketing and promotion of
specific niche areas on both the demand side ( e. g. Irish
ethnic market, incentive travel, the adventurous young, the
independent traveller etc) and the supply side ( e. g. golf,
fishing, walking, conference facilities, rural tourism, Irish
language and culture etc) . Promotion and marketing is one
of the significant ways through which the Irish tourism
product is differentiated in the minds of potential visitors and
through which Irish tourism competes against alternative
tourist locations and against the market message and profile
that competing national tourism agencies convey.

Because they are central elements of an effective national
tourism strategy, it is essential that market and promotion

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76
activities are based on systematic and up-to-date market
research, are focussed on the best market prospects and
segments identified by that research and that performance is
systematically monitored and evaluated for effectiveness and
value for money.

Britain and the US have consistently accounted for almost
two-thirds of all overseas earnings 42% % and 21% ,
respectively, in 2002. Market research and analysis indicates
that these two markets will continue to dominate visitor
numbers and earnings in Irish tourism over the next ten
years. The prospects for an increased share of overseas
earnings coming from Mainland Europe are good
especially if the interests of Irish tourism can be more closely
aligned with low fare air access. Taking these factors into
account the strategic market priorities for Irish tourism over
the next decade are set below.

Tourism Policy Review Group

Market Priority Customer Characteristics
Medium Term Top Growth Prospects
Britain
US

Established markets with growth
potential
France
Germany

Developing Markets with
Potential
Italy
Netherlands
Australia
Nordic Countries
Spain
Canada
Switzerland
Austria
Japan

The principal target segments for
Ireland are
Urban-based
Mainly 24-55 age group
( other than in the US)
Pre and post family stages
Higher income earners
Well travelled
Appreciative of scenery, people
contact and culture
Interested in Irish ethnicity

Secondary target groups include
Active retirees
Families with children from
Britain
Those motivated by particular
sports, cultural or other interests.

Longer Term Central and Eastern Europe
Asia/ Pacific
South America

Strategic Overseas Market Priorities 2003 -2012 97
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77
While current analysis indicates that the areas set out in the
above diagram represent the best medium and long-term
market prospects, the international tourism industry is
undergoing fundamental change at present for reasons and
along the lines discussed in earlier Chapters. These Forces of
Change will persist over the next ten years and beyond.
Accordingly, it will be essential for Ireland s tourism strategy
to maintain the flexibility needed to respond with
imagination and agility to unforeseen changes in market
developments and prospects.

Key Overseas Market Segments In parallel with the
targeting of specific geographic markets, marketing
strategy will also need to focus on specific segments of
identified consumer demand including those relating to
niche products. The segments of highest potential
identified for this Review in terms of their contribution to
the objectives and targets of strategy including those
relating to regionality, and revenue goals are set out below.

Key Overseas Market Activity Segments 2003 -2012

In marketing and promoting the contribution of these
segments to the strategic objectives of regionality and
seasonality it is essential that a balanced approach is taken.
The objective must be to position Ireland as a destination
suitable both for short-stay breaks and for longer-stay
touring holidays so that both segments grow together and
that growth in one segment is not achieved at the expense
of the other.

In summary, the key elements of the proposed overseas
marketing and promotional strategy over the period to
2012 are as follows.

Key Elements of the Marketing & Promotional Strategy
for Overseas Visitors 2003 -2012

A consistent focus on the primary best prospect
markets.

Investing opportunistically using pilot programmes
in areas of new market development potential.

Greater segmentation of Ireland s potential market
to maximise use of marketing funds.

Increased integration of product and service
providers in co-operative and complementary
marketing and promotional campaigns.

The maximum deployment of marketing resources
to front line marketing activities.

An increased use of new communication
technologies and distribution channels.

A greater use of customer relationship marketing
programmes.

A continuous assessment of marketing effectiveness.
Exploiting the potential of an all-island approach to
tourism marketing based on an extended range of
individual and complementary products available to
tourists in both Northern Ireland and the South.

The Domestic Market The domestic market is strategically
important, not only in terms of its size, but because of the
significant contribution it makes to the achievement of the
regional, seasonal and business sustainability objectives of
tourism strategy. While it is a market of central strategic
importance to Irish tourism, it is also a market experiencing
major changes in demographic structure, in customer
profile and attitude and in purchasing capability. Marketing
and promotional activities will need to continue to reflect
these realities. Accordingly, the marketing strategy for
domestic customers will require to be based on a more
systematic research of customer profiles and requirements.
It will continue to need a high priority status and link the
full range of tourism products and services with customer
requirements. The domestic market is, particularly,
amenable to effective use of new technology-based
customer relations management ( CRM) .

Touring ( predominantly
longer stays)

Culture/ Sightseeing
Countryside

Castles and Gardens
Dublin breaks

Angling
Conference
Incentive travel
Sporting & Other Events
( e. g. horseracing,
greyhound racing, field
games)

English Language Learning
Golf
Walking
Equestrian
Youth Budget
Cycling
Cruising
Health Tourism 98
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78
Strategic Success Driver 7 The People in Tourism
The considerable success that the tourism industry has
achieved over the past twenty years is a reflection of the
many excellent people within the industry their initiative, ,
drive, energy, skills and customer know-how. Successive
customer surveys have shown consistently that the
character, personality and friendliness of the people with
whom visitors come into contact is a major attribute of Irish
tourism.

Maintaining the quality of the people experience must
remain a fundamental objective of tourism strategy. This
will only happen if the industry, its various segments, its
individual operators and the Tourism State Agencies work
together to ensure that generic training, skills-based
training ( both in-house and external) , recruitment policies,
team-working arrangements, motivation and incentivisation
systems within the industry are among the best in the
country and internationally.

In the years ahead the rate of increase in the labour force
and the number of school leavers will fall sharply in Ireland.
There will be increasing competition between sectors of the
economy and between individual businesses within and
between these sectors to recruit and retain the brightest and
the best people available. It is absolutely essential if the Irish
tourism industry is to attract and to keep the best people
needed to grow and develop the industry to its full
potential by exploiting the opportunities outlined in this
Report, that a Human Resource Development Strategy is
put in place which has the full support and commitment of
the industry itself and the Tourism State Agencies. This
strategy must position the different segments of tourism as
a career of choice for both new entrants and existing
employees as follows.

Human Resource Development Strategy for Irish
Tourism 2003 -2012: Key Requirements

Irish tourism and its different segments must be positioned
as a career of choice for new entrants and existing
employees through:

the excellence of its pre-entry, induction and in-
career training programmes

the high national and international standing of its
qualifications

a wide range of opportunities for career
development and advancement

the competitiveness of its remuneration and
employee incentivisation packages

the excellence of its conditions of employment
the opportunities provided to employees to
influence and shape the decisions that affect the
future development and employment prospects and
conditions of the enterprises in which they work

creating and promoting a high perception on the
part of the general public and potential employees
of the attractiveness of tourism and its different
segments as a career option.

Strategic Success Driver 8
The Government Sector

While the tourism industry in Ireland is driven by private
sector enterprise, innovation and investment, the
Government sector plays a critical role in the development
of the industry at national and regional levels. The effective
discharge of this role is an essential component of tourism
strategy. The role may be described under a number of
headings.

Tourism Policy/ Strategy A fundamental role of
Government, through the Minister for Arts, Sport
and Tourism, is to formulate, articulate and
communicate national tourism policy which puts in
place a consistent framework of integrated actions,
across all relevant areas of Government activity,
within which private sector enterprise, innovation
and investment in tourism flourishes.

Tourism Policy Review Group 99
99 Page 100 101
Regulation The Government also is responsible for
putting in place a regulatory framework for the
tourism industry which is administratively efficient,
promotes competition and safeguards standards in
essential areas such as registered accommodation,
tourism-related education and training, safety and
public health.

I ncentives & Supports The Government has an
important role in promoting tourism in developing
areas where the activities supported are not being
or likely to be provided by the private sector for
reasons of market failure ( i. e. the likely returns not
justifying private sector investment) and the social
or economic returns are greater than the cost of
intervention.

Partnership In formulating, monitoring and
implementing strategy, the Government needs to
do so in close consultation with representatives of
the tourism sector.

Strategic Success Driver 9
Information, Intelligence & Research

Tourism is a diverse, complex sector with a customer base
which is also highly diverse in terms of origin, age-profile,
income levels, educational attainment, leisure interests and
time availability. It is an internationally competing service in
which customers travel to experience the product at its
place of origin or operation. It is a highly volatile industry in
which instant decisions are made to travel or not to travel
to a particular destination and which is strongly affected by
economic growth rates and political instability.

Given the fundamentally volatile characteristics of tourism it
is essential that tourism strategy at national and regional
levels be based on the best possible data and information.
That data and information needs to be converted into
relevant intelligence and further converted into a
foundation for decisive actions. In short, good information,
intelligence and research are essential for the formulation of
effective tourism policy and the development of supports
which best meet the needs of a rapidly changing industry.
Such requirements need to cover the wide range of factors
that determine the potential of individual markets for Irish
tourism. These include shifts in the offerings of competitors,
economic and demographic projections, new technologies
affecting tourism and other factors in order to provide an
essential information input into the investment decisions
that will drive the tourism sector in Ireland in the future.

Putting in place a highly professional, efficient and effective
system of information and intelligence gathering and
research to underpin decision-making by individual
operators, by the Tourism State Agencies and by the
Government is an essential component of the new tourism
strategy.

5.7 Flexibility/ Agility
All available information indicates that the international
business environment has entered a period of fundamental
change, uncertainty and volatility that is likely to persist for
some time. For reasons well set out in this Report the
tourism sector is particularly affected by these
developments. It is, undoubtedly, the case that the industry
will come through the present period of turmoil into a
better business environment. The analyses of future market
trends undertaken by the World Tourism Organisation bear
this out. While there are some initial indications that
prospects for tourism are beginning to turn around at
present, it would be wise to prepare for further uncertainty
and for future volatility.

Accordingly, the strategy for tourism outlined in this Report
will require to be monitored and reviewed more frequently
and intensely than has been the case previously with
strategies formulated in more certain times. The objective
of such continuous reviews, and consequential adjustments
to strategy, recommendations and actions, is to be able to
respond quickly and effectively to changes in market
circumstances to the benefit of Irish tourism. Of particular
importance in achieving this flexibility and agility of
approach will be the upgrading of the system of
information, intelligence and research as a central element
of tourism strategy as set out earlier in this Chapter.

5.8 Decision-Making Framework
The tourism development strategy set out in this Report
provides a framework of actions to support the development
of tourism in Ireland and its regions at a level higher than
would be the case in the absence of the strategy. The specific
actions required are clearly set out in Chapter 6, together
with the reasons for taking them, the bodies responsible for
implementing the actions and the time-frame within which
the actions should be accomplished. The Report should,
therefore, be read as a manual for action rather than simply
as a consultative document.

79 100
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80
In order to reflect the action orientation of the Report a
small, high-level Implementation Group should be
established, for a two-year period, with representation from
the private and public sectors. The task of the
Implementation Group will be to oversee implementation
of the recommendations in the Report, revise them as they
consider necessary in consultation with the bodies
responsible for their implementation, consider what
reshaping of strategy is needed in the context of changes
in the market place and report on their deliberations at six-
monthly intervals. A strong on-going process of
consultation with the industry is a critical component of the
follow-up to this Report.

5.9 Overview/ Conclusions
Irish tourism in 2003 is at a crossroads. It has come through
a period of major development and success in the 1990s
probably the most successful decade in its history. Today, it
faces major changes in the international economic and
geopolitical environment very different to those which
helped to underpin its success in the 1990s. Significant
changes have emerged in the profile of its customer base,
both at home and abroad. The competition that it faces
from traditional competitors has intensified in the face of a
downturn in world tourism and some uncertainty about the
immediate future. At the same time new competitors from
Eastern Europe and further afield have entered the market in
which Irish tourism has traditionally competed.

All of this is happening at a time when the competitiveness
of Irish tourism has deteriorated and is under further threat.
This arises from a combination of price pressures, from a
certain complacency at industry and Government levels that
the good performance of the past can be sustained in a
changed international and domestic environment and from
congestion factors following a decade of both economic and
tourism growth faster than had been anticipated and faster
than the capacity of many elements of infrastructure to
adjust to the increased demands.

It is also happening at a time when it is clear that the
significant levels of financial support for the development of
the industry from EU and Government, widely available in
the 1990s and to the present time through direct grants,
taxation incentives and infrastructural supports, will not be
available at anything like the same level in future years.

Accordingly, a successful Irish tourism industry in the years

ahead will be an industry that is more self-reliant, agile and
adaptable to change in the market place. The industry has
shown, over the past decade and more, its capacity to adapt.
It has many strengths including, and beyond, those available
when the industry started on an extraordinarily successful
development path in the 1990s. Among these strengths are
its proven track record of meeting customer needs and a
deep knowledge of customer requirements associated with
that success, a capital stock based on recent investment that
is modern and efficient across all segments of the industry
and a people-in-tourism resource to which customers/ visitors
have consistently awarded the very highest accolades.

Central to the success of Irish tourism in the years ahead will
be a recovery of the competitiveness that has been lost in
recent years.

To address these issues a new strategy for Irish tourism is
needed which clearly sets out a new way forward in the
context of the fundamental changes now affecting the
industry. Such a strategy is set out in this Report and
particularly in this Chapter. It encompasses:

a clear vision of where Irish tourism wants to go
a description of the underlying forces that are
shaping the industry at present and those that will
continue to do so in future

the establishment of challenging targets and
objectives for the industry going forward

an analysis of the factors that will drive success in the
industry

an approach to developing an enhanced capability
within both the private and public sector
components of the industry to innovate and respond
effectively to unforeseen circumstances

a decision-making framework that facilitates the
formulation of such a strategy and its implementation
through consistent and decisive actions at
Government level and across the different sectors of
the industry itself.

The Review Group believes that the analysis contained in this
Report and the new strategy for Irish tourism set out in this
Chapter offers a path to the future successful development
of the sector.

Tourism Policy Review Group 101
101 Page 102 103
81 102
102 Page 103 104
Tourism Policy Review Group
Implementing the Strategy -The Actions Required
The policies and actions that have delivered strong
performance in Irish tourism in the past will not
suffice to do so in the future. The way in which the
changes now required are anticipated, managed
and put in place will determine the future success of
Irish tourism as a sector of investment opportunity,
innovation and enterprise, and as an instrument of
Government developmental policies.

6 chapter six 103
103 Page 104 105
83
6.1 Translating Strategy into Action
Irish tourism is a highly complex and diverse sector of
interdependent, economic activities operating within both
the private and public sectors. The actions now required to
implement the new strategy for Irish tourism outlined in
this Report are equally diverse and wide-ranging. They
encompass many different decision makers in both the
private and public sectors.

In identifying the key actions needed to deliver the strategy
outlined, the Review Group was guided by three
fundamental principles.

Fundamental Principles Guiding Recommended Actions
1 The growth and development of the tourism industry throughout Ireland must, primarily, be
driven by private sector enterprise, innovation and
investment with sensible and appropriate
Government support.

2 The basic function of tourism policy is to put, and maintain, in place a consistent framework of well-
chosen actions, across all relevant areas of
Government activity, within which enterprise,
innovation and investment in the tourism industry
flourishes.

3 Government has an important complementary role in supporting the enhancement of business
capability and capacity within a tourism industry
that is largely owner-operated and small in scale. In
exercising this role, direct public sector intervention
in the tourism sector should be confined to those
areas of clear market failure ( i. e. the likely returns
not justifying private sector investment) and then
only, in close consultation, and partnership, with
the industry itself.

Tourism has made a major contribution to national and
regional development in Ireland for many decades and at
no time more so than over the past 10 years. The analyses
undertaken by the Review Group indicate clearly that it can
continue to do so over the next decade and beyond.

The Group have set ambitious targets for the industry over
the period to 2012 covering the key areas of revenue
generation, overseas visitor numbers, domestic tourism and
regional development. The policies and actions that have
delivered strong performance in Irish tourism in the past
will not suffice to enable the industry to meet these targets
in the significantly changed circumstances that face the
industry today and over the coming decade.

Substantive change is required in key areas of Government
policy, in the delivery of that policy by the Tourism State
Agencies, in the work of the industry representative bodies
and, most importantly, at the level of individual enterprises
throughout the industry. The effectiveness and efficiency
with which the changes required are anticipated, managed
and put in place will determine the future success of Irish
tourism as a sector of investment opportunity, innovation
and enterprise and as an instrument of Government social
and economic development. The fundamental
components of that change require:

a new policy framework and set of related actions
that continue to promote strong, self-reliant,
profitable, innovative, customer-focused tourism
enterprises

an industry that itself anticipates and embraces the
changing needs of its customer base both
overseas and domestic tourists and offers to each
customer a product, service and experience which
surpasses that available from alternative providers
both at home and abroad. 104
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84
6.2 Action Plan 2003-2005
Chapter 5 of this Report sets out a new strategy for Irish
tourism over the period 2003 -2012. In it the key strategic
drivers of success for the industry are identified.

Irish Tourism 2003-2012: Key Strategic Drivers of Success
1 Business Environment
2 Competitiveness and Value for money
3 Access Transport
4 Information and Communication Technologies
5 Product Development and Innovation
6 Marketing and Promotion
7 The People in Tourism
8 The Government Sector
9 Information, Intelligence and Research

The following sections of this Chapter set out the specific
actions required to be taken under each of these key drivers
of a successful Irish tourism industry. The actions focus on
the period 2003-2005. To attempt to recommend today
what actions will require to be taken beyond 2005 is not
realistic. What is required, instead, in an increasingly
volatile tourism environment, is a process of frequent
review of strategy at not longer than two-year intervals and
the adoption of a series of rolling 2-3 year action plans
which reflect changing circumstances, the periodic review
of strategy and the outcomes that arise from the
immediately preceding action plan.

The set of actions recommended in this Chapter may,
accordingly, be regarded as the first rolling action plan for
the development of Irish tourism over the next decade.
Each section sets out clearly:

the rationale underlying the identification of the
particular driver of success for Irish tourism

the objectives which the actions recommended seek
to achieve

where primary responsibility lies for undertaking the
actions recommended

the timeframe within which the actions
recommended should be progressed.

A number of the actions recommended will help to shape
and strengthen more than one particular strategic driver
of success and are, therefore, repeated in more than one
section. These multi-purpose actions are marked by an
asterisk ( * ) .

An immediate and urgent task for the Department of Arts,
Sport and Tourism, once this Report is published and
distributed, will be to enter into substantive bilateral
discussions with the bodies that have key responsibilities for
the implementation of the strategy and recommendations
set out. The Review Group strongly recommends that the
Department establish a small high-level Implementation
Group of the key decision makers in both the public and
private sectors to provide an impetus to the effective
follow-through on the strategy and recommendations set
out in this Report and to the development of the shared
understanding and partnership between the key decision
makers without which the full development potential of
the tourism industry will not be realised.

Executive Summary 105
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85
Strategic Success Driver 1 Business Environment
Objective To facilitate the development of the tourism industry through a range of tourism-supportive Government macroeconomic and other policies that enhance the business
environment and encourage investment
Rationale The ultimate determinant of success in Irish tourism will be an energetic, innovative and profitable private sector operating within a domestic environment where Government
policies and actions are supportive of business investment in tourism.

Actions Lead Role Milestones/ Timeframe
1 Government Commitment: Strengthen Government Government/ Department Immediate and ongoing commitment to creating and maintaining a positive of Arts, Sport and Tourism
legislative, budgetary and regulatory environment for
tourism investment and development by

a stronger and more frequent acknowledgement of
tourism as an important, highly-valued instrument of
national and regional development policy

a redefinition of tourism policy to encompass not
only the traditional role and functions of a
" Department of Tourism" and the Tourism State
Agencies but, in addition, all areas of Government
policy and actions that impact in a significant manner
on the development of tourism

establishing a stronger analytical and resource base
within the Department of Tourism, Culture and Sport,
to monitor, influence and shape developments, in
conjunction with the Tourism State Agencies, across
the wider arena of Government policy that
significantly affects tourism.

2 Competition: Strongly support competition, Department of Arts, Immediate and ongoing or pro-competition regulation where market competition Sport and Tourism/ Tourism
does not operate, in the case of both private and public Industry Representative
sector activities that affect tourism -including the Bodies
hospitality sector, access transport carriers and
infrastructure ( ports and airports) and internal
transport services.

1 Actions that support more than one driver of successful tourism development are denoted by an asterisk *

Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005
Actions to Improve the Business Environment for Tourism Operators* 1 106
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86
Actions Lead Role Milestones/ Timeframe
3 Inflation: Take resolute action to maintain recent Government/ Department Immediate and ongoing progress to bring inflation and tourism prices down to of Finance
the eurozone average and below through
the full implementation by all the social partners of
the provisions relating to pay, productivity and the
facilitation of change in the workplace contained in
the Social Partnership Agreement 2003-2005
-Sustaining Progress , as well as the Agreement' s
anti-inflation initiative

Government commitment to an inflation target
benchmarked to the eurozone average rate

maintaining any increases in charges for
Government services below the general rate
of inflation

avoiding further increases in excise duties and VAT
in Budget 2004.

4 Taxation: While company and personal taxation rates in Ireland are generally competitive and the narrow base of
taxation in Ireland and EU State Aid Rules constrain
Government action in this area, nevertheless, within that
framework a number of actions should be taken

promote reinvestment in maintaining the capital Fáilte Ireland/ Tourism Immediate and ongoing
stock in Irish tourism at high standards through Industry Representative
use of the accelerated write-offs already available Bodies/ Regional
for plant and machinery Tourism Authorities

establish and publish annually information on Fáilte Ireland/ Revenue First Investment
investment in tourism facilities undertaken with the Commissioners/ Tourism Report published
aid of capital allowances and other tax reliefs in order Industry Representative in 2004
to monitor and assess investment in maintaining the Bodies
quality of Ireland' s tourism stock

bring indirect taxation levels on key tourism-related Department of Finance From Budget 2004 and ongoing
consumables down to average eurozone levels
focussing initially on the high excise duties on wine. .

Executive Summary 107
107 Page 108 109
5 Insurance: Address the factors generating the high absolute levels of, and high rates of increase in, insurance
costs for tourism enterprises through
the acceleration of the Government' s Insurance Reform Department of Enterprise, Reduction in insurance charges
Programme, in particular the establishment of the Trade and Employment levied from 2004
Personal Injuries Assessment Board on a statutory basis

the consideration of the particular impact on tourism Competition Authority By end 2003
of insurance increases in the analysis/ report on the
insurance sector being prepared at present by the
Competition Authority

the consideration of the scope for co-operative action Tourism Industry Immediate
by the tourism industry in areas such as the Representative Bodies
management of claims, health and safety measures
and self-insurance.

6 * Infrastructure: Accelerate the completion of key elements of tourism related infrastructure including
* National Conference Centre ( Strategic Success Department of Arts, See later Actions for details
Driver 5 also refers) Sport and Tourism

* National Sports Stadium ( Strategic Success Department of Arts, See later Actions for details
Driver 5 also refers) Sport and Tourism

* National Roads Programme, in particular the early Department of Transport/ See later Actions for details
completion of the Dublin M50 orbital route and the Department of Environment,
route network around international air and sea access Heritage and Local
points and routes/ centres of high tourism demand Government
( e. g. Kerry, Connemara and the mid-West) including
regional and inter-regional access to Shannon Airport
( Strategic Success Driver 3 also refers)

* National and Regional Road Signposting Department of Transport/ See later Actions for details
Programmes ( Strategic Success Driver 3 also refers) . Department of Environment,
Heritage and Local
Government

7 Regional Infrastructural Priorities: Update the Regional Tourism Authorities/ Immediate and ongoing audit of the tourism-related infrastructural needs of each Fáilte Ireland
of the regional tourism authority areas and prioritise the
key actions required to bridge the gaps for submission
to the relevant Department/ agency.

* Actions that support more than one driver of successful tourism development are denoted by an asterisk *
87 108
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88
Actions Lead Role Milestones/ Timeframe
8 Tourism State Agencies Business Plans: : Fáilte Ireland/ Tourism For 2004 and ongoing In order to facilitate investment in tourism and Ireland/ Department of
tourism related bodies from a number of sources in the Arts, Sport and Tourism
private and public sectors, Fáilte Ireland and Tourism
Ireland to prepare and publish annually business
development plans which establish key targets of
performance in the development, promotion
and marketing of tourism at national and regional levels
within a clear policy framework articulated by the
Department of Tourism, Culture and Sport and set out in
the plans.

9 Proposed Smoking Ban in the Workplace: Department of Health and Immediate While supporting action to reduce the adverse impact Children/ Tourism Industry
on public health of smoking in the workplace and in the Representative Bodies
light of the overall assessment by Tourism Ireland that
the proposed ban will not have a dramatic effect on
visitor numbers, discussions should continue between
the Department of Health and Children and the tourism
sector on the detailed arrangements for the introduction
of the new measures to help minimise any adverse
impact on the sector.

Executive Summary 109
109 Page 110 111
Strategic Success Driver 2 Competitiveness & Value for Money
Objective To address the deterioration in the competitiveness of Irish tourism in recent years
Rationale The competitiveness of Irish tourism is a function of the total visitor experience relative to other locations. Restoring competitiveness is a major challenge for Irish tourism. It is not
just a pricing issue, it is about wider value for money. It encompasses the experience for
customers from the initial point of contact with Ireland as a potential tourist destination,
through the transport services used in getting to and from Ireland, travel experience within
the country, the price and quality of products and services, and a host of intangible factors
that influence the perception of customers of the Irish tourist product. Accordingly, the
competitiveness of Irish tourism is influenced by the full range of factors and actions set
out in this Chapter. There is, however, a need to focus on a number of issues in this section
that have a more direct impact on competitiveness.

Actions Lead Role Milestones/ Timeframe
1 Tourism Industry to Acknowledge Primary Tourism Industry Immediate and ongoing Responsibility for Restoring Competitiveness: Representative Bodies and
The Irish tourism industry should acknowledge through tourism enterprises
its representative bodies and through individual
enterprises that

in recent years it has lost competitiveness and that a
high and increasing proportion of customers have
expressed concerns about value for money

primary responsibility for restoring competitiveness
and better value for money rests with the industry itself.

2 * Government Action on Inflation: Government/ Department Immediate and ongoing The Government should resolutely implement the of Finance
package of anti-inflation actions identified in Strategic
Success Driver 1.

3 Benchmark the Competition: The price and Tourism Industry For 2004 and ongoing product offerings against which Irish tourism competes Representative Bodies/
should be identified each year and the information Fáilte Ireland/
widely distributed within the industry. Tourism Ireland

4 * New Management Development Capability Fáilte Ireland Early 2004 and ongoing Programme: Fáilte Ireland should develop and
introduce a programme on management development
capability for the industry similar to that which Enterprise
Ireland has developed for Irish-owned industry and

Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005
Actions to Improve Competitiveness and Value for Money

89 * Actions that support more than one driver of successful tourism development are denoted by an asterisk * 110
110 Page 111 112
Actions Lead Role Milestones/ Timeframe
internationally-traded services ( non-tourist) . The objective
of the programme will be to enhance the capability of
industry to manage more effectively the major changes
now affecting it, and those in prospect, to increase
productivity and standards and to restore competitiveness.

5 * Customer Relations Management: Fáilte Ireland in partnership Early 2004 and ongoing Fáilte Ireland should develop and introduce a programme with Tourism Industry
to improve the standards of the tourism industry in Representative Bodies
customer relations management ( CRM) , making particular
use of the potential which modern information and
communication technologies provide to enterprises for
this purpose, including the sharing of information for
mutual benefit between enterprises offering products
and services that are complementary. ( Strategic Success
Drivers 4 and 6 also refer)

6 * Competition: Strongly support competition, Department of Arts, Immediate and ongoing or pro-competition regulation where market competition Sport and Tourism/ Tourism
does not operate, in the case of both private and public Industry Representative
sector activities that affect tourism including the Bodies
hospitality sector, access transport carriers and
infrastructure ( ports and airports) and internal
transport services. ( Strategic Success Driver 1 also refers)

7 Management/ Employee Partnerships: Tourism Industry Immediate and ongoing In order to enhance the scope to anticipate and introduce Representative Bodies
change in the workplace as an inherent and ongoing
element of work practice, management/ employee
partnership arrangements to enhance performance,
productivity and competitiveness should be strongly
encouraged by the Tourism Industry Representative
Bodies, in consultation with Fáilte Ireland and the
National Centre for Partnership and Performance ( NCPP) .

8 Make High Standards the Competitive Fáilte Ireland/ Immediate and ongoing Advantage of Irish Tourism: Recognising that at its Tourism Industry
current stage of development, Ireland is a high-wage, Representative Bodies
high-productivity economy, a relentless upgrading of
standards within the tourism sector should be promoted
as a competitive response to lower cost alternatives in
other countries. These high standards should encompass
product, ( accommodation, restaurants, visitor centres,
activity products, natural and built environment) ,
transport infrastructure and services.

* Actions that support more than one driver of successful tourism development are denoted by an asterisk *

Executive Summary

90 111
111 Page 112 113
91
Actions Lead Role Milestones/ Timeframe
9 Stronger Role for Tourism Industry The Tourism Industry For 2004 Representative Bodies: The tourism industry itself Representative Bodies
should strengthen the capability of its representative
bodies through a widening of their functions and the
recruitment or secondment from industry of people with
the requisite analytical and other required expertise to
promote and to provide leadership in relation to
competitiveness throughout the industry and its different
segments. Measures in which industry representative
bodies should take a lead include

identifying and promoting competitiveness
enhancing actions

facilitating joint cooperative action between
enterprises in areas such as marketing, training
and insurance provision

joint product development initiatives
the establishment of management networks at local
and regional level

providing training supports in productivity
enhancement, cost management, marketing and
customer relations management

benchmarking performance of Irish tourism against
developments in competitor countries

investing in research and planning that supports the
development of tourism and enhances the objectivity
and credibility of tourism representative bodies.

10 Training: Develop specific training supports to Fáilte Ireland/ Tourism Early 2004 and ongoing enhance the industry' s capability in cost management. Industry Representative
Bodies 112
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92
Strategic Success Driver 3 Access Transport ( External)
Objective To ensure that the price, quality, frequency and route access of air and sea transport to and from Ireland are at least as good as that available to potential visitors of alternative tourist
locations
Rationale Competitive and convenient air and sea access is a crucial determinant of international demand for a tourist destination and, especially, in the case of Ireland as an island
destination.

Actions Lead Role Milestones/ Timeframe
1 Ireland-US Bilateral Air Agreement: Department of Transport Immediate
Renegotiate the Ireland-US Bilateral Air Agreement,
in advance of an EU-US Aviation Agreement, in order
to remove the US gateways constraint and maximise
the benefits to Ireland from additional air services
and enhanced visitor flows

Establish a high-level Task Force to advise on the Department of Transport Immediate
issues involved, from the perspective of tourism,
general business investment, the airline industry,
the airport authorities and regional development
including enhanced promotional and regional and
inter-regional access requirements.

2 Dublin Airport Terminal Facilities: Facilitate Department of Transport Decision in principle on provision additional, competitive, fast turnaround terminal facilities of terminal by end 2003
at Dublin Airport to help develop additional air services,
particularly from Mainland Europe.

3 Dublin Airport Visitor Reception Facilities: Aer Rianta/ By start of 2004 season Implement a series of actions to improve visitor reception Dublin Airport Authority
facilities at Dublin Airport including baggage handling,
information and general facilities in arrivals/ departures areas.

Executive Summary
Actions to Improve Access Transport
Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005 113
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93
4 * Additional Air-Routes: Actively pursue the best Tourism Ireland in Immediate and ongoing and for prospects for additional route access into Ireland from conjunction with airlines inclusion in operational plans of
Mainland Europe and Britain with airport authorities and and airport authorities Tourism State Agencies and
air carriers, including low fare airlines that demonstrate an Airport Authorities for 2004 and
ability to develop and sustain new routes and carry subsequently
significantly increased numbers of visitors. ( Strategic
Success Driver 6 also refers)

5 Regulation of Sea Ports: Appoint a regulator, similar Department of Before end 2003 to that for aviation, to regulate port charges with a specific Communications, Marine
mandate to enhance facilities, services, competitiveness and Natural Resources
and transparency.

6 Visitor Facilities at Seaports: Develop a programme Port Authorities By start of 2004 season to improve facilities for visitors at major seaports including
information on arrival, improved reception facilities, easier
and more attractive access through the ports.

Strategic Success Driver 3 Access Transport ( Internal) continued
Objective To ensure that tourism priorities are reflected in national infrastructural development plans in order to improve internal travel arrangements and facilities for tourists
Rationale Direct, easy and affordable access to all tourism areas within Ireland, through improvements in roads, sign-posting, public transport and domestic transport links, is
essential if regionality targets are to be achieved. Management of tourism flows and
congestion in developed tourist areas, especially in peak season, must also be addressed in
terms of the impact on sustainability.

Actions Lead Role Milestones/ Timeframe
7 * National Roads: Improve and upgrade the National Department of Transport/ Tourism priorities reflected in the Roads Programme and, in particular, accelerate actions to Department of Environment, 2004 Roads Programme
achieve the early completion of the Dublin M50 orbital Heritage and Local
route and the route network around international air and Government
sea access points and routes/ centres of high tourism
demand ( e. g. Kerry, Connemara and the mid-West
including regional and inter-regional links to Shannon
Airport) . ( Strategic Success Driver 1 also refers)

* Actions that support more than one driver of successful tourism development are denoted by an asterisk * 114
114 Page 115 116
94
Actions Lead Role Milestones/ Timeframe
8 * Signposting: Prioritise major tourism routes in the Department of Transport/ 2004 annual reports to include National and Regional Road Signposting Programmes Department of Environment, progress on meeting tourism
and provide annual progress report on implementation Heritage & Local priorities
with particular reference to tourism routes. ( Strategic Government
Success Driver 1 also refers)

9 Bus Services: Bus Eireann should work more closely Bus Eireann in consultation By start of 2004 season with the Regional Tourism Authorities to improve bus with Regional Tourism
services to, and within, key tourist destinations. Authorities

10 Rail Travel, Facilities and Customer Services: Irish Rail Immediate and ongoing A significant upgrading of station facilities, passenger
communications and rolling stock on main inter-urban
routes is required which, for example, makes provision for

simplified ticketing arrangements for tourists to allow
greater interchange between bus and rail services

the priority delivery of electronic information systems
at key transport locations for journey planning and
on board trains

ensuring sufficient and adequate seating and luggage
facilities for all passengers on inter-urban routes

higher standards of service in terms of punctuality,
cleanliness, reliability, frequency and comfort of trains
and stations and more independent monitoring of
customer service charters

the priority deployment of modern rolling stock on
key tourist routes.

11 Dublin Airport Metro Link: Accelerate proposals Department of Transport Decision in principle to proceed by for developing a metro link between Dublin airport and end 2003
Dublin city centre with provision for ease of transfer to
national road, rail and bus services.

* Actions that support more than one driver of successful tourism development are denoted by an asterisk *

Executive Summary 115
115 Page 116 117
Strategic Success Driver 4 Information and Communication Technologies
Objective To accelerate the exploitation of the potential of information and communication technologies and e-commerce for the tourism industry

Rationale The use of internet-based technologies remains at an early stage of development across the majority of operators in Irish tourism. The impact of information and communication
technologies on tourism will intensify in the years ahead. Enterprises that have the
capability to effectively use information and communication technologies in areas such as
customer relations management, marketing, payment, cost control, accounting, training
and human resource management, will have a competitive advantage.

Actions Lead Role Milestones/ Timeframe
1 Information and Communication Technologies Fáilte Ireland/ Tourism Early 2004 and ongoing Development Programme: Develop a programme Ireland
with the industry to maximise the use of information and
communication technologies for training, marketing and
customer relations management, including a strong
demonstration campaign, co-operative networks and
shared databases, web-based training and the alignment
of websites. Fáilte Ireland will have the enterprise facing
role and Tourism Ireland will have the market and
consumer facing role

2 Support Programme: Support the industry in the Fáilte Ireland In 2004 and ongoing introduction and development of effective customer
friendly e-commerce applications and in building
capability in their use.

3 Co-operative Networks: Promote best practice The Tourism Industry Details of case studies published models of co-operative networks in the application of Representative Bodies in 2004
information and communication technologies and
e-commerce strategies.

4 Training Courses New Technologies: : Fáilte Ireland Early 2004 Ensure that training courses operated directly, or
supported, by Fáilte Ireland involve a computer use
and operation module

Make it an objective that graduates from Fáilte Ireland
operated or supported courses are proficient in the use
and application of new technologies in the industry.

Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005
Actions to Improve the Use of Information and Communication Technologies

95 116
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96
Actions Lead Role Milestones/ Timeframe
5 Leadership Role for State Agencies: Fáilte Ireland Fáilte Ireland Immediate and ongoing and Tourism Ireland should be seen as strong leaders in / Tourism Ireland
the application of information and communication
technologies in all aspects of their business including
operations, communications, training and the standards
of their web-sites/ portals.

6 Award/ Recognition Schemes: Fáilte Ireland should Fáilte Ireland Programme initiated in 2004 establish, promote and widely communicate awards to
acknowledge excellence in the application of information
and communication technologies in different areas of
tourism including hotels, other accommodation, visitor
centres etc.

Executive Summary 117
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97
Strategic Success Driver 5 Product Development and Innovation
Objective To ensure that the tourism product which Ireland offers to overseas and domestic customers provides, and continues to provide, a positive and memorable experience
beyond their expectations
Rationale The Irish tourism product is highly diverse, built around the three pillars of people, pace and place. It encompasses the natural and built environment, a wide range of hospitality
products and services, a range of visitor attractions and cultural facilities, transport facilities
and, importantly, the interaction with people. The tourism product is the fundamental
determinant of the tourist customer experience on which the success of the Irish tourism
industry rests.

Actions Lead Role Milestones/ Timeframe
1 * Reinvestment in Capital Stock: In order to Fáilte Ireland/ Tourism Immediate and ongoing maintain and enhance the standards of the capital stock Industry Representative
in Irish tourism, strongly promote reinvestment in plant Bodies/ Regional
and equipment with the aid of the accelerated tax write-Tourism Authorities
offs available. ( Strategic Success Driver 1 also refers)

2 Innovation Fund: Establish, on a pilot basis, for a 3 Fáilte Ireland 2004-2006 year period, an innovation fund to promote and support
on a competitive basis, the development of tourism
products that are new to the Irish market, have a clear
potential to attract additional visitors and incorporate
best practice particularly in terms of environmental
sustainability, accessibility for tourists with disabilities
and equality in service provision.

3 Product Clusters: In order to address the under Groups of Tourism Product Immediate and ongoing -utilisation of certain historical, cultural and sporting Suppliers/ Regional Tourism
attractions and facilities, it is essential to achieve a better Authorities/ Fáilte Ireland
presentation and more integrated and cooperative
marketing of clusters of products that complement each
other and broaden the offerings available to visitors,
including those with disabilities. The clusters can be
single product ( e. g. golf, heritage etc. ) or multi-product
( e. g. golf/ health-related, culture/ heritage etc. ) and could
be promoted and supported at regional level or on an
all-island basis.

* Actions that support more than one driver of successful tourism development are denoted by an asterisk *

Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005
Actions to Support Product Development and Innovation 118
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98
Actions Lead Role Milestones/ Timeframe
4 Product Research: Identify international trends in the Fáilte Ireland/ Tourism Immediate and ongoing supply and demand of tourism products ( to anticipate/ Ireland / Tourism Industry
meet emerging best prospects such as demand for Representative Bodies
well being and health breaks, quality destinations for city jointly
breaks, car touring, cruising) particularly in the markets
against which Ireland competes. Communicate this
information widely within the tourism industry in Ireland
and use it to support product development and market
development plans.

5 * National Conference Centre: Finalise quickly, Department of Arts, Sport Complete by early/ mid 2004 the efficiently and effectively the Government announced and Tourism selection, following open
commitment to establish a National Conference Centre competition, of private sector
in Dublin in partnership with private sector investors. partners
( Strategic Success Driver 1 also refers)

6 * National Sports Stadium: In order to better Department of Arts, Sport Decision in principle by end 2003 exploit the visitor attraction and overseas marketing and Tourism in partnership
potential of major field-based sporting events of with the main field sports
international interest, finalise on the basis of objective, organisations
value for money, marketing and environmental analysis,
a decision on the provision of a National Sports Stadium
in Dublin. ( Strategic Success Driver 1 also refers)

7 Access Rights: Establish clear guidelines and codes of Department of Community, Complete guidelines by start of practice on rights of access for visitors to the countryside, Rural and Gaeltacht Affairs 2004 season
hills, mountains, coast and State-owned forestry and bring in consultation with farm
clarity to the legal position in relation to public liability. organisations, Local
Authorities, Regional
Tourism Authorities and
Coillte and Fáilte Ireland

8 UNESCO World Heritage Site Designation: Department of the Immediate and ongoing. Put in place the consultation, management and Environment, Heritage and Seek an additional designation
conservation arrangements necessary to achieve the Local Government by 2005
designation of additional sites in Ireland as UNESCO
World Heritage Sites, to add to the two so designated at
present Boyne Valley and Skellig Michael. .

* Actions that support more than one driver of successful tourism development are denoted by an asterisk *

Executive Summary 119
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99
Actions Lead Role Milestones/ Timeframe
9 Litter: In order to address an issue of frequently Department of Environment, Immediate and ongoing expressed concern to tourists and building on the success Heritage & Local
of the plastic bag levy and the expressed commitment Government/ Local
of the Minister for the Environment, Heritage and Local Authorities/ Regional
Government and his Department to intensify anti-litter Tourism Authorities/
measures Tourism Industry
Local Authorities should further strengthen their actions Representative Bodies
in co-operation with local business and commercial
sectors including those engaged in tourism, and with
greater public participation, to tackle litter pollution
-with a particular focus on fast tracking projects in
established tourist areas

the Regional Tourism Authorities should ensure that
litter abatement is kept at the top of tourism
development priorities throughout their regions,
support periodic surveys of litter pollution and follow
through on the necessary abatement measures.

10 Working Closely with the Planning Authorities: Fáilte Ireland/ Regional Immediate and ongoing In order to support the sensible conservation of the Tourism Authorities
natural and built environment which is a fundamental
foundation of Ireland' s tourism industry, the Tourism State
Agencies should work more closely with county, city and
urban planning authorities in the preparation and
implementation of their development and litter abatement
plans and in the operation of planning control, particularly
in areas of visual amenity and historical importance.
In doing so, the Agencies would renew a role they
previously undertook with significant benefits to the
tourism industry but which has been less strongly pursued
by them in recent years.

11 The Tourism Industry and the Environment: Tourism Industry Immediate and ongoing A top-class environment awareness and promotion Representative Bodies
programme should be put in place by the Tourism
Industry Representative Bodies which emphasises the
importance of environmental conservation to the future
of Irish tourism and which provides a series of guidelines
on good environmental management practice, covering
areas such as waste-management, energy use and
conservation, litter abatement, and the design principles
for buildings and facilities. 120
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100
Actions Lead Role Milestones/ Timeframe
12 Hotel and Guesthouse Classification: In order to Fáilte Ireland New classification system agreed underpin the increased emphasis on quality of product with industry by mid-2004
and service on which Irish tourism must compete in a
higher cost national environment, Fáilte Ireland should,
in close consultation with the industry, put in place a
mandatory classification system for hotels and guesthouses
on the basis of the best up-to-date criteria.

13 A Unified Representation Structure for the The B& B representative By early 2004 B& B Sector: In order to better develop and promote bodies
the important and unique product which the B& B sector
offers to tourists, there is a strong case for the different
groups representing the sector to come together into a
more unified and single structure to more effectively
represent their industry and work closely with Fáilte Ireland
and Tourism Ireland for that purpose.

14 Cultural and Artistic Infrastructure of Dublin: In order to narrow the gap in cultural and artistic
infrastructure which exists between Dublin and other
capital cities in Europe, early decisions should be taken
to secure

the redevelopment of the Abbey Theatre Department of Arts, Decision to proceed with public
Sport and Tourism private partnership by mid 2004

the relocation of the National Concert Hall. Department of Arts, Decision to proceed by end 2003
Sport and Tourism

15 Product Development Scheme: In order to Fáilte Ireland Immediate accelerate the processing of applications for grants under
the Tourism Product Development Scheme 2002-2006,
primarily in non-traditional tourism areas, Fáilte Ireland
should allocate additional resources to make early
decisions on the applications that were received in 2002.

Executive Summary 121
121 Page 122 123
Strategic Success Driver 6 Marketing and Promotion
Objective To focus marketing and promotion activities on the market prospects and segments which hold the characteristics and potential to best meet the expenditure, visitor number and
regionality objectives of Irish tourism policy
Rationale Marketing links Ireland' s tourism product with potential overseas and domestic customers. The tourism sector is highly diverse with a predominance of small enterprises which lack
the individual scale, resources and knowledge to engage effectively in international
marketing. Partnership arrangements and State support are, therefore, appropriate in
marketing tourism products. The State has a particular responsibility in supporting
destination marketing to the island of Ireland in partnership with the Northern Ireland
authorities and representatives of the various segments of the tourism industry.

Actions Lead Role Milestones/ Timeframe
1 Market Focus: Continue to concentrate overseas Tourism Ireland Immediate and ongoing marketing expenditure on the British and US markets / Fáilte Ireland
which account for over 70% of visitor numbers. In doing
so, continue to work to ensure better integration with the
co-operative marketing and promotion strategies of
different segments of the tourism industry at national and
regional levels, including the car-brought market from
Britain, major sporting, artistic and cultural events
and by strengthening the role of the niche product
marketing groups.

2 Mainland Europe: Undertake a fundamental review of Tourism Ireland in Complete by early 2004 marketing and promotion operations in key Mainland consultation with
Europe markets where market share and market capture Department of Arts, Sport
has remained relatively low, stagnant or fallen over the and Tourism and Tourism
past decade and where the perception of visitors with Industry Representative
respect to tourism product in Ireland is below average. Bodies

3 * Partnerships with Airline Industry: Tourism Ireland in Immediate and ongoing Work closely with air carriers, including low fare conjunction with airlines
airlines and airport authorities, to identify new direct and airport authorities
routes with high visitor market prospects which are
sustainable from/ to Britain, Mainland Europe and the
US and the marketing and cost/ price requirements
necessary to effectively exploit this potential.
( Strategic Success Driver 3 also refers)

Encourage airlines providing direct routes from/ to
Europe from Australia, New Zealand and the Far East
to have attractive through route fare arrangements
to Ireland.

* Actions that support more than one driver of successful tourism development are denoted by an asterisk *

Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005
Actions to Support Marketing and Promotion

101 122
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Actions Lead Role Milestones/ Timeframe
4 All-island Marketing Initiatives: Promote more Tourism Ireland/ Tourism Immediate strongly the development and marketing of clusters of Industry Representative
complementary products on the island of Ireland in areas Bodies North and South
such as cultural facilities ( museums, music festivals, theatre
events) and sporting facilities ( golf, angling, walking) .

5 * Customer Relations Management: Put in place Fáilte Ireland By end 2003 a programme to upgrade the capability of tourism
enterprises in customer relations management including
the strong and effective use of computer-based CRM
systems. ( Strategic Success Driver 4 also refers)

6 E-Marketing: Enhance e-marketing capability to ensure Tourism Ireland/ Immediate and ongoing that potential and repeat international and domestic Fáilte Ireland
customers receive world class information services and can
be easily directed to online purchasing services for the full
range of Irish tourism products/ packages/ flights and ferries.

7 Gulliver: In order to address the expressed concerns of Gulliver/ B& B Immediate certain segments of the tourism industry and to enhance Representative Bodies
the contribution of the Gulliver computerised information
and reservation system to meeting the needs of the
industry and individual tourists, Gulliver should meet with
representatives of the industry to clarify how this can
best be done.

8 Market Expenditure Analysis: As part of the annual Department of Arts, For 2004 and ongoing expenditure allocation process by the Department of Tourism, Culture and Sport
Sport and Tourism, the Department should undertake and
publish, in conjunction with Fáilte Ireland and Tourism
Ireland, reviews of the marketing expenditure allocated
and results achieved relative to objectives in the previous
year. The reviews should differentiate between the main
expenditure programmes and between destination and
product marketing and in each of these areas between
direct spend, outsourced spend, overheads and outturn
compared with objectives.

Executive Summary

102 123
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103
Actions Lead Role Milestones/ Timeframe
9 Agility/ Flexibility: Maintain and enhance the capacity Department of Arts, Sport Immediate and ongoing demonstrated in recent years to respond to unforeseen and Tourism/ Tourism Ireland
market changes at home and overseas by the timely
reprioritisation of marketing activities and associated
expenditure allocations, including the use of contingency
funding.

10 Market Share Analysis: The Tourism State Agencies Tourism State Agencies/ Immediate and ongoing should monitor market share performance at operational Department of Arts, Sport
level in all markets ( geographical, segment, product/ niche) and Tourism
with a view to the information gathered being used by the
Department of Tourism, Culture and Sport and the Agencies
as a trigger for review, analysis and action response where
negative trends emerge. 124
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104
Strategic Success Driver 7 The People in Tourism
Objective To ensure that the people working in tourism in Ireland operate to the highest international standards of professionalism and that the generally highly positive experience
of tourists with the people they meet in Ireland, well-documented in successive surveys
over the years, is maintained and enhanced

Rationale Tourism is an industry in which the attitudes, competence, enterprise, innovation, hospitality and friendliness of the people in it are an intrinsic part of the product itself. The
people in tourism are at the heart of the tourist experience in Ireland and the ultimate
determinant of the quality of that experience.

Actions Lead Role Milestones/ Timeframe
1 Human Resource Development Strategy: Fáilte Ireland ( with 2004 Programme In order to further strengthen the human resource base, Tourism Industry
standards of performance and professionalism of Irish Representative Bodies
tourism and in the context of the extended organisational and training and
remit and development responsibilities which have education providers)
recently been allocated to Fáilte Ireland, a new Human
Resource Strategy should be put in place which

supports the development of professional career paths
for key occupations in the tourism sector and provides
clear, flexible and relevant courses and programmes
leading to National Qualifications which hold
international recognition for excellence

positions the industry as a highly attractive career
choice through the excellence of its induction and
in-career training, the provision and support of
internationally recognised qualifications, clear career
progression paths and opportunities within and across
the different functional areas and the promotion of
good work practices including employee participation
in decisions that affect their work

provides a focus for leading, instigating and
influencing the education and training policy and
practices of the State and private sectors to enhance
capability at all levels in the industry through quality
assurance, facilitation and support for training and
development interventions

stimulates actions aimed at achieving more and better
training within the tourism industry

Executive Summary
Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005
Actions to Support Human Resource ( People) Capability 125
125 Page 126 127
Actions Lead Role Milestones/ Timeframe
emphasises the particular importance of communication
and inter-personal skills in tourism in recruiting new
employees and in training existing employees

ensures the delivery of training programmes for
existing employees at times and places convenient to
the needs of enterprises and employees

takes full advantage of the significant potential of
distance based e-learning in training and educational
programmes

supports the development of partnership arrangements
between management and other employees as a
means of employee incentivisation and of enhanced
business performance by tourism enterprises

promotes training networks of tourism enterprises in
conjunction with the Tourism Industry Representative
Bodies

evaluates the impact of the full range of education and
training supports and services provided at national,
regional and local levels with a view to streamlining
their availability and operation.

2 National Recruitment Plan: Establish a Tourism Fáilte Ireland Immediate Career Promotions Group comprised of key stakeholders,
including students, to formulate a National Recruitment
Plan, designed to intensify and strengthen linkages with
schools, communities and career guidance services.

3 Managing Cultural Diversity: Develop and Fáilte Ireland/ Tourism Immediate implement a strategy and detailed implementation Industry Representative
programme to provide for the integration of non-national Bodies
employees within the work-place and more widely in our
society in a way that recognises and supports cultural
diversity and enhances their personal and professional
development and their potential to add a new and
valuable dimension to traditional Irish tourism values.

105 126
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106
Strategic Success Driver 8 The Government Sector
Objective To improve and enhance the effectiveness of Government leadership and interventions in promoting tourism

Rationale Government policies and actions across a wide range of areas strongly affect the development of tourism. It is essential to put in place new organisational and operational
arrangements which more fully acknowledge and reflect the importance of tourism as an
instrument of national and regional development and which improve the effectiveness of
Government interventions which support the development of tourism.

Actions Lead Role Milestones/ Timeframe
1 * Redefine the scope of Tourism Policy: Because Department of Arts, Sport Immediate and ongoing of the significant impact on tourism of a wide range of and Tourism
Government activities that are the responsibility of a
number of different Government Departments, the scope
of tourism policy should be redefined beyond its
traditional domain within a " Department of Tourism" to
encompass all areas of Government activity that impact in
a significant way on tourism. ( Strategic Success Driver 1
also refers)

2 Strengthen the capacity and role of the Department of Arts, Sport Immediate Tourism Division of the Department of Arts, and Tourism
Sport and Tourism: The Division of the Department of Tourism, Culture and Sport dealing with tourism matters
requires to be strengthened
to include additional people with the wider range of
analytical skills and competencies required to deal with
the more extensive scope of Government activities
encompassed within the wider definition of tourism
policy advocated in this Report

to follow through effectively on the recommendations
of this Report in consultation with a number of other
Government Departments and agencies and with the
industry itself

to interact more effectively with other Government
Departments and agencies on issues important to the
development of tourism.

* Actions that support more than one driver of successful tourism development are denoted by and asterix *

Executive Summary
Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005
Actions to Support More Effective Government Leadership and Interventions in Promoting Tourism 127
127 Page 128 129
Actions Lead Role Milestones/ Timeframe
3 Tourism and the National Competitiveness Department of the Immediate Council: In order to strengthen the focus of Government Taoiseach/ Department of
policies in supporting competitiveness in tourism, the Arts, Sport and Tourism
Department of Tourism, Culture and Sport should be included
among the Government Departments in attendance and
participating at meetings of the National Competitiveness
Council which reports directly to the Taoiseach on issues
affecting the competitiveness of the economy and its
different sectors.

4 Inter-Departmental Bilateral Consultation Department of Arts, Sport Immediate Arrangements: Establish standing consultation and Tourism
arrangements between the Department of Arts, Sport and
Tourism and the Government Departments/ Agencies
whose activities most impact on tourism including the
Department of Finance, Department of Transport and
Department of Environment, Heritage and Local
Government.

5 Fáilte Ireland: Following the recent amalgamation of Fáilte Ireland Immediate Bord Fáilte and CERT into a single organisation for the
development of tourism in Ireland, the organisational
structure for the new body should be quickly finalised
taking account of the new strategy and action plan that
flows from this Report.

6 Regional Tourism Authorities: Establish a closer Fáilte Ireland Early 2004 correlation between the identified core visitor servicing
and development functions provided by the Regional
Tourism Authorities and the State financial support
provided to them through Fáilte Ireland. Agree the new
regional structures for the discharge of Fáilte Ireland' s
functions and determine the appropriate relationships
and arrangements at regional level.

107 128
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108
Actions Lead Role Milestones/ Timeframe
7 Regional/ Sub-National Structure: In order to more Department of Arts, Sport Immediate effectively harness the depth of knowledge, interest and and Tourism/ Fáilte Ireland
commitment to the development of tourism at regional,
county and sub-county level, it is essential that an early
review of the functions, activities and interactions of the
many bodies involved in tourism promotion and
development be undertaken as a matter of urgency.
The key principles underlying the review required should
encompass the following

a clear definition of the roles and functions of different
bodies involved in the promotion and development of
tourism at regional and local levels

the identification of areas of overlap and duplication
together with the actions required to remove such
overlap and duplication. The establishment of a
coherent framework ( e. g. in the form of regional
tourism plans) within which the roles, functions and
specific actions of the different bodies active in tourism
promotion and development at regional level are
articulated and coordinated

the establishment of a forum and supporting
organisational structure at regional, county and local
tourism development level to develop the coherent
framework required, to monitor its implementation
and to coordinate effectively the range of activities
undertaken by different bodies.

Executive Summary 129
129 Page 130 131
109
Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005
Actions to Improve the Quality of Information, Intelligence and Research
Strategic Success Driver 9 Information, Intelligence & Research
Objective To provide the essential foundations of comparative data, knowledge and intelligence on which to develop the policies and actions by both the public and private sectors that promote
tourism across the full range of the nine strategic success drivers outlined in this Report
Rationale Good policy and development decisions by both Government and the private sector depend on a good base of data, knowledge and intelligence relevant to the tourism
industry in Ireland and internationally.
Actions Lead Role Milestones/ Timeframe
1 Research, Advisory and Co-ordination Group: Department of Arts, Sport By end 2003 Set up a Research Advisory and Co-ordination Group, with and Tourism
representatives of the industry, Tourism State Agencies,
relevant Government Departments and the research
community in third level education to identify information
and research gaps.

2 Research Register: Compile, maintain and publish a Fáilte Ireland Initial database published in 2004 comprehensive database on information and research
relevant to Irish tourism recently completed, under way
and planned.

3 Tourism Satellite Accounts: In order to more Fáilte Ireland and Tourism Feasibility study and action plan to accurately reflect the importance and contribution of Ireland in consultation with be completed by early 2004
tourism to national economic development, a revised the Central Statistics Office
approach to the quantification of the economic
contribution of tourism in national accounting terms
through the use of the Tourism Satellite Accounts ( TSAs 2 )
model developed by the WTO should be put in place.

2 A Tourism Satellite Account is a set of detailed tables, consistent with National Accounts, focussed on estimating flows of money relating to tourism
activity. They provide better quality information as they reconcile both demand ( from surveys of tourists' expenditure) and supply ( i. e. goods and supplies from surveys of businesses) . 130
130 Page 131 132
110
Objective To drive forward and monitor the effective implementation of actions recommended in this Action Plan and to put in place a process to ensure continuing review of strategy to reflect
changing circumstances.
Rationale The strategy and recommended actions set out in this Report encompass a wide and complex range of issues. These will require to be followed through with resolution,
commitment and energy if they are to effectively support and sustain the further
development of Irish tourism as a major sector of opportunity for enterprise and
investment and as a powerful instrument of national and regional development.

Actions Lead Role Milestones/ Timeframe
1 Implementation Group: In order to follow through Department of Arts, Sport Immediate quickly and effectively on this Report, so that it can make and Tourism
a real difference to the further development of the tourism
industry in Ireland, a high-level Implementation Group
should be established to drive forward and monitor the
recommended actions. The Implementation Group should
be representative of the tourism industry and public sector
and should

report directly to the Minister for Arts, Sport and Tourism
sit for a fixed period of no more than 2 years
( 2003-2005)

publish a report on its work, results and deliberations
at 6 monthly intervals.

2 Tourism Forum: An annual forum of the tourism Fáilte Ireland First Forum in October 2004 industry should be established to consider developments
in the sector and, to review performance in the
implementation of the new strategy in the context of these
developments. The first forum should be established in
October 2004, 12 months after the publication of this
Report.

Executive Summary
Implementing Tourism Strategy 2003 to 2012 First Rolling Action Plan 2003-2005
Implementation Arrangements 131
131 Page 132 133
The establishment of the Tourism Policy Review Group was
announced by the Minister for Arts, Sport and Tourism at
the end of December 2002 and convened its first meeting
on 28 January 2003.

The Review Group met on 10 occasions. This included two
and a half days of bilateral meetings with the following 17
key representative groups and companies associated with
the development of tourism in Ireland.

The Review Group convened an all-day Open Public Forum
on 14 April 2003 that was attended by over 100 people.
Invitations to the Open Forum were pre-advertised in the
national press. The Forum covered the following four themes

Marketing and Access
Tourism Product and People in Tourism
Value for Money and Competitiveness
Sustainable Tourism and Regional Development.

The Review Group also invited, by advertisement in the
national press, written submissions in connection with its
work. It received over 100 written submissions from
interested parties, to whom the Review Group is indebted.
The submissions are available on the Review Group' s
website. ( www. tourismreview. ie)

In addition to the written submissions and comments made
in response to the public invitation, the Review Group also
considered a range of detailed material prepared by its
Secretariat, drawn from the Department of Arts, Sport and
Tourism, Fáilte Ireland and Tourism Ireland. Some
supplementary consultancy work in specialist areas was also
commissioned.

As requested by the Minster for Arts, Sport and Tourism at
the inaugural meeting, the Review Group published an
Interim Report on 28 May 2003. This was prepared
following the consultation phase of the assigned task,
during which time the Review Group developed a number
of initial conclusions and interim recommendations. The
Interim Report is available on the Review Group' s website
( www. tourismreview. ie)

111

Appendix A Background to Establishment of Review Group and Working Procedures
Aer Lingus
Aer Rianta
British Tourism Marketing
Partnership

European Tourism
Marketing Partnership

Irish Farmhouse Holidays
Association

Irish Ferries
Irish Hotels Federation
Irish Tour Operators
Association

Irish Tourist Industry
Confederation

National Association of
Regional Tourism
Authorities

Ryanair
Shannon Development
SIPTU
Stena Line
The Arts Council
Town and Country
Homes Association

US Tourism Marketing
Partnership 132
132 Page 133 134
112
Phase 1 Review of Tourism Performance and Prospects
Assess the performance and economic impact of the
tourism sector in Ireland over the past 10 years in
terms of categories of visitor ( overseas and domestic) ,
revenue earnings, sectoral and geographical source
markets and internal regional distribution, including
international comparisons and movements in Ireland s
share of key source markets

Assess the formulation and evolution of tourism policy
and the evolution of, and contribution by, the industry
to the development of the sector

Assess the trends in the international competitiveness
of the Irish tourism product over the past 10 years and
future prospects in terms of value for money, pricing,
quality and service levels

Assess the future tourism market potential for Ireland in
terms of priority source markets, categories of visitors,
changes in holiday taking trends and level of
international competition

Identify total public and private funding for tourism
development over the past 10 years, the sources and
modes of delivery and any value for money
assessments.

Phase 2 Strategy for Future Sustainable Development
of the Sector

Identify the key elements of a strategy, both industry-led
and Government-led, for the further sustainable
development of tourism in Ireland, under the following
headings and including controllable sector specific issues

product utilisation, development and innovation
business capability ( including human resource
development and training)

enhancing international competitiveness in terms
of value for money, pricing, quality standards and
service levels

marketing
access transport
infrastructural and environmental requirements
statistics, research and planning
institutional development arrangements, including
regional structures and coordination of support
measures

Identify appropriate actions and recommendations for
the implementation of the future strategy.

Tourism Policy Review Group
Appendix B Terms of Reference 133
133 Page 134 135
113
The Review Group is indebted to the following bodies and
individuals who made written submissions:

Achill Tourism/ Turasóireacht Acla Aer Lingus
Aer Rianta Alcock, Anne
Arts Council Association of Irish Professional Conference Organisers
Ballyhoura Development Bord Fáilte
Border, Midland and Western Regional Assembly Bourke, Stephanie
Brantley, James Brick, Margaret
Bus Eireann Car Rental Council of Ireland
CERT Chartered Institute of Logistics & Transport
CIE Tours International Clare County Council and Clare County Development
Board Coach Tourism and Transport Council
Cobh Genealogical Project Coillte
Coiste Ghlór na nGael Chloich na Coillte Comharchumann Turasóireacht Chorca Dhuibhne
Comhdháil Náisiúnta na Gaeilge Conway, Tom & Breda
Cork Kerry Tourism ( South West Regional Tourism Authority)
Cronin, Mary Cruise Ireland
Daly, Maire Dennehy, Eilis
Department of Community, Rural and Gaeltacht Affairs Donagher, Tom
Dublin Chamber of Commerce Dublin Institute of Technology ( Tourism Department and
Tourism Research Centre) Dublin Tourism ( Regional Tourism Authority)
Fexco Fulvio, Catherine
GaelSaoire Gael-Taca
Galway City and County Tourism Group Genealogical Society of Ireland
Go Outdoor Ireland Heritage Island
Heritage Towns of Ireland Heron-Grace, Norma
Hurley, Siobhan Ireland Unplugged
Ireland West Tourism ( Western Regional Tourism Authority) Ireland' s Blue Book -Irish Country Houses & Restaurants
Association

Irish Boat Rental Association Irish Coach Drivers' Association
Irish Farmhouse Holidays Association Irish Ferries
Irish Hotels Federation Irish Self-Catering Federation
Irish Tour Operators Association Irish Tourist Industry Confederation
Island of Ireland Mills Conference Keaney, Raymond
Keep Ireland Open Kerry County Council -Tourism Unit
Kerry County Development Board Kerry County Tourism Committee
Laois LEADER Rural Development Company Larkfield House
Mac Gearailt, Breandán Marine Institute
Marketing English in Ireland -RELSA McGrath, Mary
McKean, Mervyn & Jean McSweeney, Helena
Mid-West Regional Authority Murphy, Patricia
Music Board of Ireland National Association of Regional Tourism Authorities
National Centre for Tourism Policy Studies National Waymarked Ways Advisory Council
North West Tourism ( Regional Tourism Authority) O' Leary, Donal
O' Reilly, J O' Sullivan, Kathleen
Restaurants Association of Ireland Roche, Joseph
Roche, Patrick Ryan, Bernadette
Shannon College of Hotel Management Shannon Development
SIPTU South East Tourism ( Regional Tourism Authority)
South-East Regional Authority South West Mayo Development Co. & Mayo County
Tourism Committee Southern and Eastern Regional Assembly
Suck Valley Committee Teichmann, Berny
The Equality Authority The Hidden Ireland
Tourism Victim Support Service Town and Country Homes Association
Tuatha Chiarraí Teo Western Development Commission
Western Development Tourism Programme Westmeath Co Council and Westmeath County
Development Board

Appendix C List of Written Submissions 134
134 Page 135 136
114
Background
The potential benefits and synergy to be gained from
North-South co-operation in tourism development and
promotion has been recognised by policy makers on both
sides of the Border for many years. Co-operation on these
matters started to become more formalised and action-
oriented from the late 1980s onwards.

The relevant Government Departments in both
jurisdictions, together with the then Bord Fáilte and the
Northern Ireland Tourist Board ( NITB) , were assisted by
cross-Border funding bodies, such as the International Fund
for Ireland ( IFI) and the EU-funded INTERREG and Peace &
Reconciliation Programmes, to develop and implement
specific programmes across a range of tourism themes,
e. g. , support for product development in the Border
counties ( Northern Ireland and the 5 Southern border
counties plus Sligo) and associated training and a limited
joint marketing programme. This programme focused on
below the line co-operative activities ( i. e. non main-stream
advertising) carried out jointly by the two Tourist Boards in
main markets.

These small cross-Border programmes took place against
the backdrop of the much larger tourism product, training
and marketing measures under the EU co-funded Tourism
Operational Programmes in the South.

In the mid 1990s, a new industry-led joint marketing body,
the Overseas Tourism Marketing Initiative ( OTMI) , was
formed. Both Tourist Boards were members of OTMI and its
Board included industry representatives from both
jurisdictions. From its inception, it recognised the potential
benefits of advancing an all-island approach to tourism
marketing.

In 1995, for the first time, an island of Ireland theme was
used to advertise Ireland. The use of a branded approach to
marketing Ireland had been emerging during this time,
culminating in the development of Tourism Brand Ireland
( TBI) by Bord Fáilte in conjunction with NITB. TBI was
adopted by both jurisdictions and OTMI. In 1996, for the
first time, an all island, branded advertising campaign was
used to promote holidays to Ireland in the four main
markets of the US, Britain, France and Germany.

Tourism Ireland was formed in late 2000 arising from the
identification of the tourism sector as a key area of co-
operation between both jurisdictions in the Belfast

Agreement of Good Friday 1998. It is charged with
growing overseas tourism business to the island of Ireland
and supporting Northern Ireland to realise its tourism
potential. In this regard, it is the guardian of TBI and has
responsibility for overseas destination marketing of the
island of Ireland. It works closely with Fáilte Ireland, NITB,
the tourism industry on the island and overseas in
delivering on its remit.

The development and communication of official policy on
overseas marketing is initiated, in the first instance by
Tourism Ireland s sponsoring Departments the
Department of Enterprise, Trade and Investment in
Northern Ireland and the Department of Arts, Sport and
Tourism in the South. Policy is determined by the North
South Ministerial Council ( NSMC) acting in its tourism
sectoral format. The Sponsoring Departments and Tourism
Ireland work with the Secretariat of the NSMC, which co-
ordinates the work of the NSMC itself, to deliver a coherent
policy framework for all-island marketing.

Current Status
North-South co-operation on tourism matters now operates
at many levels. At policy level, the NSMC, with the
Ministers from both jurisdictions, oversee and approve
objectives, strategy and resources for overseas marketing by
Tourism Ireland. This co-operation cascades through both
public sectors through the active liaison and co-operation
of both sponsor Departments on a range of issues and
through the co-operation and liaison of the three bodies
Tourism Ireland, Fáilte Ireland and NITB. This co-operation
is mirrored in the private sector, at one level through the
industry representation on the board of Tourism Ireland but
also through the close working relationship of the Irish
Tourist Industry Confederation ( ITIC) and the Northern
Ireland Tourist Industry Confederation ( NITIC) .

Industry partnership is a key tenet of the operation of
Tourism Ireland. This operates both informally through a
myriad of contacts and marketing opportunities and
formally through the Tourism Marketing Partnership. This is
an all island group, managed by Tourism Ireland and
comprised of Tourism Ireland, Fáilte Ireland, NITB and
representatives of ITIC and NITIC. It has a central
committee based in Ireland and a series of local country
committees in key markets.

Tourism Policy Review Group
Appendix D Tourism Policy on the Island of Ireland 135
135 Page 136 137
115
The Future
The concept of a synergistic and mutually beneficial
approach to developing tourism on the island of Ireland
has evolved since the late 1980s and is now at a developed
stage. North-South co-operation is most advanced and
formalised in the area of international marketing with less
formal co-operation flourishing across a range of tourism
activities.

Within this context, the principal policy challenges are to
sustain and grow the more mature parts of the industry on
the island while supporting the economic and regional
development policies of both jurisdictions which seek to
improve the socio-economic well being of less successful
tourism regions.

The overall thrust of the strategy contained in this Review
supports these objectives. It will be a key aim of the
Department of Tourism, Culture and Sport together with Fáilte
Ireland to work with its Northern counterparts and Tourism
Ireland on areas of mutual benefit.

A particular challenge will be to bed down the new
structures and ensure clarity of focus and responsibility for
each body. It is expected that this approach will be
mirrored through the evolution of the already strong
industry links that are in place. The principal aim will be to
deliver on the potential manifested by the successful co-
operation which has evolved over many years with clear
economic and social benefits for both communities. 136
136 Page 137 138
116
1 Regional Tourism Authorities ( RTAs) : In 1964, eight
regional tourism organisations were set up to
administer tourism at regional/ local level. There are
now 6 RTAs in addition to Shannon Development
( which took over regional responsibility from the Mid-
West RTA) . The RTAs are private companies limited by
guarantee. Membership includes Local Authorities,
local tourism and related industry representatives,
including individuals and associations. Fáilte Ireland is
represented on all Boards. Funding for the RTAs comes
from commercial income, local membership fees, Local
Authorities subventions and Fáilte Ireland. . The
activities of the RTAs are coordinated by an RTA
Management Committee which meets regularly to
consider common policy issues. Regular meetings also
take place with Fáilte Ireland.

1 Shannon Development: This State-sponsored
company was set up in 1959 to develop both Shannon
airport and the Shannon region. Its role in tourism
includes visitor servicing activities, product
development, operating tourism attractions and the
marketing of the region.

1 County Tourism Committees ( CTCs) : Set up in 1993,
these represent tourism interests at county level.
Membership of CTCs is drawn from the membership of
the local RTA. CTCs formulate county tourism plans for
incorporation in the County Enterprise Board and RTA
plans and stimulate and co-ordinate new product
initiatives.

2 County Enterprise Boards: Set up at county level in
1993, these Boards are constituted as companies
limited by guarantee. County Enterprise Boards
support job creation in small manufacturing and
services businesses, including tourism, and provide
funding to enterprises in areas not covered by LEADER
Groups.

3 LEADER Groups: Funded through the EU, the LEADER
Groups administer rural development programmes in
areas of special need and are set up where there is a
strong community base. They provide grants towards
business planning and project development at local
level, including in the area of tourism.

1 Product Development Boards: Appointed by the
Minister for Arts, Sport and Tourism in 2002, these
Boards have responsibility for investment decisions
under the Tourism Product Development Scheme
funded under the Regional Operational Programmes
for the Border Midland and Western ( BMW) and
Southern and Eastern ( S& E) Regions. The Scheme has
an EU co-financed public investment budget of 130
million, ( with EU grant funding of up to 55 million)
and is administered by Fáilte Ireland.

Tourism Policy Review Group
Appendix E Other State Bodies with Functions Associated with the Development of Tourism

1 Under the aegis of the Department of Tourism, Culture and Sport.
2 Under the aegis of the Department of Enterprise, Trade and Employment.
3 Under the aegis of the Department of Community, Rural and Gaeltacht Affairs. 137
137 Page 138 139
138
138 Page 139
117
Notes 139

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