The perception that last year was a poor one for tourism, with numbers down over 5%, is not supported by total tourist spending, which rose strongly
Last week, the Central Statistics Office released summary figures on tourism and travel for 2001. The data provide food for thought, challenging the conventional wisdom on the experience of the Irish tourist sector last year. The publication should also prompt some fresh thinking on tourism policy, not least on the preoccupation with tourist numbers, which makes little sense as a policy target.
The data also confirm that the big growth area in Irish tourism is that of Irish residents travelling abroad, which is in keeping with Ireland's new status as one of the richest states in the world.
Last year was generally seen as a poor one for Irish tourism, but that perception is not supported by the official figures. It is true that the number of overseas visitors fell by 5.1 per cent to 6.08 million, but total expenditure rose very strongly, which surely is of more benefit to the industry and to the economy.
Expenditure by overseas visitors (excluding cross-Border visits) amounted to €2.9 billion in 2001, against €2.5 billion. in the millennium year, a rise of 10.8 per cent. To put this into perspective, retail spending in Ireland rose by 5.9 per cent last year, so the tourist gain is laudable in absolute and relative terms.
Fewer tourists, then, but they spent more, partly because each tourist stayed longer. The average length of stay was 7.9 nights, up from 7.7 in 2000. On that basis the industry's preoccupation with the number of tourists is puzzling: surely it is better to welcome five million people who stay two weeks than 10 million who fly home the next day?
Moreover there may well be diminishing returns in terms of tourist numbers in that, if more people travel to Ireland because of its "unspoilt" image, the increase in numbers may itself damage that image. The type of tourist is also important and spending habits vary - backpackers do not stay in four-star hotels.
Interestingly, the data reveal that Irish tourists are more desirable in terms of value-added than foreign visitors to Ireland in that they spend more. For example, each overseas visitor spent €482 on average in 2001, which was well up on the previous year's total of €413, but is dwarfed by the average spend of an Irish tourist abroad, which amounted to €699 in 2001.
These figures do not take account of the cost of travel and if one includes fare receipts, the Irish tourist abroad spent €819 on average in 2001, against a spend of €615 by overseas visitors to Ireland. The higher value-added tourist actually lives amongst us but holidays abroad!
In fact, visits abroad by Irish residents has been growing at a much more rapid pace than tourism to Ireland. Since 1997, for instance, the number of overseas visitors has grown by just over 4 per cent per annum, whereas Irish visits abroad have increased by 8.6 per cent per year, or more than twice the pace and now stand at 4.25 million. If this relative growth rate continues, Irish overseas visits will surpass tourist visitors to Ireland before 2010.
This should not come as a total surprise, as income per head has grown faster in Ireland than anywhere else in the western world in the past decade, propelling the Irish economy from below the European average to second position in the euro area. Indeed, the OECD put the Republic's GDP per capita in 2000 as the fifth highest in the organisation, and a glance at the 2001 growth figures implies that the rank has improved to third.
Perhaps the tourist industry should now take stock of where it wants to go over the next decade and one option would be to put fewer resources into attracting low value-added mass tourism from the US, for example, and more into keeping the higher value-added Irish tourist at home.
Measuring success or failure by the numbers through the turnstile also makes little sense as a business plan, for the industry or for the State as a whole.
Dr Dan McLaughlin is chief economist at Bank of Ireland
