SUMMARY OF TOURISM & HOSPITALITY ALL-ISLAND SECTORAL MEETING

SUMMARY OF TOURISM & HOSPITALITY ALL-ISLAND SECTORAL MEETING 23 rd January, 2017 Crowne Plaza Hotel, Dundalk 1. INTRODUCTION The meeting was well-attended with over 100 participants from North and South, representing tourism and business representative bodies, local authorities, Government Departments, airlines, port authorities, tourism marketing groups, national tourism agencies and other tourism experts and a mix of North and South delegates. Participants were seated at tables of approximately 12 which included as far as possible, representatives from each of the main tourism sectors, business and Government representatives and a mix of North and South delegates. A facilitator and Notetaker from the Department of Transport, Tourism and Sport assisted at each table. The meeting was chaired by Michael Counahan of CHL Consulting. 2. MINISTER S ADDRESS The meeting commenced at 13.30 with an opening address by Minister Shane Ross T.D., Minister for Transport, Tourism & Sport, in which he welcomed participants and said that the All Island Meeting on Tourism is a follow-up to the All-Ireland Civic Dialogue held in Kilmainham, Dublin on November 2. The objective of the event was to get the viewpoints of those involved in the tourism sector on both sides of the Border on how the decision of the UK to leave the European Union will affect the tourism and hospitality sector, and what can be done now and in the future to mitigate adverse effects. He confirmed that the main outputs will be used to help inform the next All-Island Civic Dialogue on 17 February 2017 and ultimately to inform Government's position on issues related to the EU s exit negotiations. He said that Ireland s priorities in terms of Brexit are: economic and trading arrangements, the Northern Ireland Peace Process including border issues, the common travel area, and the future of the European Union. Page 1

The Minister welcomed the recent clarity from the UK Prime Minister who said that her priorities include maintaining the common travel area and avoiding a return to a hard border with Northern Ireland. He reiterated that the Irish Government is fully committed to protecting the integrity of the Good Friday Agreement and its core principles. He said that the interests of the island as a whole and protecting the gains of the peace process will remain priorities for the Irish Government in the upcoming Brexit negotiations. He said that this dialogue will greatly assist the Government to continue to formulate an All Island viewpoint on the effects of the UK exit and that more meetings will be necessary as the shape and direction of these negotiations become more apparent. 3. PRESENTATION BY NIALL GIBBONS The Minister s speech was followed by a presentation by Niall Gibbons, CEO of Tourism Ireland, on the current and likely implications of Brexit on Irish tourism. He presented an overview of the value of tourism to Ireland, which amounted to 5.4 billion in direct revenue and 10.5 million visitors to the island of Ireland in 2016. His presentation focused particularly on the British market, which is currently worth 1.5 billion to the island of Ireland, and he shared the findings from recent research into the implications of Brexit for outbound tourism from Britain. These findings included the following significant points: 7% of British citizens are less likely to holiday overseas; 50% will spend less while on holiday; 25% will reduce their length of stay; 18% say the Brexit vote will influence their holiday choice in the next twelve months; 17% will postpone a trip outside the UK. He went on to provide a synopsis of current marketing activity in Britain by Tourism Ireland, which emphasises the two main brands of Ireland s Ancient East and the Wild Atlantic Way, as well as Northern Ireland and Dublin. The presentation concluded with a summary of short and medium term conclusions. The short term conclusions mentioned are: Delivery of value for money is a critical issue; The British market will continue to be very important; Page 2

There are opportunities for N.Ireland in the short-term, on the basis of a weaker Pound; There is a continuing need for strategic analysis and insight on the implications of Brexit; It is vital that market access continues to be prioritised. The medium term conclusions are impacts on the Common Travel Area, visas and currency. 4. REPORTING FROM BREAKOUT SESSION The participants then discussed the following topics at each table: A) The Common Travel Area and Border Control, with specific reference to: i) industry impacts, ii) visa issues, and iii) social impacts. B) Inbound Tourism and Market Diversification, with specific reference to: i) Great Britain, ii) defending current markets, and iii) new and developing markets. C) Challenges and Opportunities for the Tourism Sector, with specific reference to: i) specific challenges, ii) industry response, and iii) Government response. Following discussions, the Facilitators from each table reported the views of their table back to a Plenary Session. In summary, the most frequently mentioned issues were: Maintaining the CTA is vital. A return to border controls would have serious implications for tourism and business, especially in the border counties, as well as for communities and cross-border business, sporting and social networks. Any changes to the CTA that would impact existing British and Irish visa schemes would have a very negative effect, especially on new and developing markets; Maintaining liberal aviation access is also essential; Price competitiveness is under threat from currency fluctuation, the effects of which are already being felt in the GB market. Support and funding are required from Page 3

Government to assist the industry to be competitive and to remove existing obstacles to growth; Good infrastructure and quality products are crucial to a competitive tourism sector; Market research is required in order to inform market diversification, to accurately predict the impact on tourism of border controls, and to explore other models of living with a non-eu border; A clear strategy for handling Brexit is required from Government and agencies, with some consideration to be given to examining structures and roles; The potential for a limited number of opportunities were identified, including: potential for additional growth in the cruise and business tourism sectors; the potential to promote Ireland as a gateway hub to Europe; and possible opportunities to hire experienced non-uk tourism and hospitality staff who may find it difficult to stay in Britain post-brexit. More detail on the points made by participants are provided below. A. COMMON TRAVEL AREA & BORDER CONTROL A(i) Industry Impacts Expected negative impact on the volume and value of tourism in Ireland as a result of the following factors relating to changes to the CTA and border control. - Delays at border checkpoints will act as a disincentive to tourism; this will affect the border counties in particular (especially Donegal, which has 54 border crossings); - What is meant by a hard border needs to be more clearly defined - a physical barrier is likely to put visitors off; - Many coach tours to southern Ireland incorporate Northern Ireland but might exclude it in the future due to border delays (as well as currency fluctuations); - Visitors to Ireland from other EU27 countries may also be affected by changes to the CTA, as their ability to travel freely around the island of Ireland may be curtailed, and they may face more complex entry checks on arrival in Ireland if the CTA is retained in modified form; - Visitors on the waterway network under the care of Waterways Ireland (and the knock-on effect on rural areas) are likely to be particularly affected due to its cross-border nature; Page 4

- Similarly, some greenways operate across borders and their future management and usage will be an issue; - UK airlines wouldn t have the same rights to fly to EU countries as previously, potentially resulting in a decline in air access; - Airlines are mobile and can move where the business is, so there may be potential access issues for Ireland caused by fewer airlines being based here. Specific border-related issues. - If a border is to be re-introduced, the preference would be for an invisible/electronic border; - In the event that a form of border control is re-introduced, the industry will need to be at the forefront in educating visitors; - Any hard border should be in mainland GB rather than Ireland; - There may be infrastructural impacts on airports and ports due to increased requirements for passport control and/or security; - If the CTA is retained, it is impossible to know how it will work as one country will be in the EU and one will not. Analysis of comparable cases, especially Eastern European external EU borders, would be useful. There is insufficient information regarding the impact of border controls on crossborder tourism. - The full extent of cross-border vehicle journeys are underestimated in official data; - Research is required to more accurately assess potential impact; - Current examples of border regions from whom Ireland could learn include Norway and Sweden (although both of those countries are members of both the Schengen area and the European Economic Area); - The possibility of leaving the CTA and joining Schengen would facilitate travel from other European countries but would be accompanied by strict border controls between Ireland and NI. Possible legislative/regulatory changes on issues such as drivers hours, vehicle standards, etc could have a negative impact; A strategy will be required for cross-border bus and rail services; Page 5

There are concerns regarding how Irish drivers, and in particular non-eu drivers, will be treated on landbridge crossings; The cross-border transport of certain goods (e.g. whiskey) by tourists would be complicated by the imposition of customs duties. Impact on Northern Ireland industry. - While in the short term it appears Northern Ireland will be less affected due to the benefit of the depreciation of Sterling, historical evidence suggests that tourism in Northern Ireland would not survive long term if a hard border was introduced; - Freedom of movement will affect tourist numbers crossing the border 70% of holiday tourists to Northern Ireland enter Ireland through Dublin, which is the major gateway for all non-gb markets to the North West and Northern Ireland for visitors from all non-gb markets. A(ii) Visa Issues Any changes to the CTA that impact on the existing British and Irish Visa schemes would have a particularly negative effect on new and emerging markets, such as China, and also on the EFL market. It will be important to get clarity on this issue at an early date; The UK is looking at further relaxing of rules to attract Chinese tourists Ireland needs to keep pace; The BI Visa scheme is not an EU initiative so should not be affected by Brexit this initiative should be fully exploited, though it may take a backfoot given the Brexit agenda. A(iii) Social Impacts Border Controls would have a significant impact on the lives of citizens living in one jurisdiction and working in the other; Cross Border social networks built up over a long period of time would be impacted; In the sporting field, 35 National Governing Bodies of Sport are governed on an All-Island basis and the movement of athletes and spectators may be affected; A hard border is not practical and would be seen as a huge deterrent, due to envisaged time delays and various border controls, to both Irish and visiting Page 6

people, leading to significant erosions in quality of life and ability of businesses to attract skilled staff; The slow-down in cross-border business may result in greater unemployment in the border counties; There may be an impact on Free Travel; There is the potential for an increase in black market activity and criminality; There is concern that years of nurturing the peace process in border communities, building relationships, etc., could be reversed. B. INBOUND TOURISM & MARKET DIVERSIFICATION B(i) Great Britain Ireland needs to move away from being so reliant on the GB market; However GB is still very important and Ireland needs to continue to have a strong marketing presence there in order to defend and grow this market: a new GB Market Development Plan is needed; GB destinations are now bigger competitors for Ireland, e.g. Scotland, Cornwall, Wales; GB economy will take a hit with Brexit - unlikely to travel as much; will have less disposable income/smaller holiday budget. Concern about possible downturn in regular GB bookings if Ireland is seen as too expensive. But the Irish hospitality product is still good value for money, especially outside Dublin and there is a need to address negative media commentary regarding value for money; GB market has already been impacted by the depreciation of Sterling, particularly in Donegal which has heretofore depended on GB and NI for almost 50% of its business; If Sterling remains weak against the euro there may be a need to review Ireland s membership of the Eurozone. B(ii) Defend Current Markets Current markets are best defended by investing in the existing tourism product. Good infrastructure is crucial to tourism; There is a need to look at new segments e.g. accessibility tourism, sports tourism; There may also be high-value segments outside the Culturally Curious that could be converted to actual visitors; Page 7

Focus on less price-sensitive segments; Ireland could capitalise on Walking Holidays. This would need considerable capital investment into Greenways, accommodation along identified routes, marketing support etc; In the cruise market, there is potential for Cork and Dublin in particular to gain business from GB ports in the transatlantic cruise market, due to stricter GB controls on cruise ship visitors. Easy access is essential to this sector and Ireland can offer this; The tourism experience brands (e.g. WAW) are important in differentiating the island of Ireland from competitors and should be continually developed; It is possible that GB will be seen as less welcoming among European mainland visitors than was the case before the Brexit referendum, and there is an opportunity for marketing messages to focus on the quality of the Irish welcome and the safety of Ireland as a destination, without being too negative or explicit in comparing Ireland with GB, given that GB is still the largest source market; The strength of the dollar may create an opportunity to attract additional tourists from the US; Business Tourism may present a specific opportunity, as Ireland will be the only English speaking country in the EU. B(iii) New and Developing Markets There is a need to diversify into new and developing markets to off-set the reliance on the GB market; Attracting tourists from new markets will require additional training/up-skilling for the industry; Ireland also needs to ensure it will have sufficient capacity to cater for additional visitors; New and developing markets will be impacted by any changes to the visa regimes; Sports tourism, e.g. RWC 2023, has the potential to open up new markets; The tourism industry should implement the developing markets strategy; Dublin airport could become the new gateway hub between North America and Europe, with an emphasis on increasing direct access to Dublin and regional airports. Page 8

C. CHALLENGES AND OPPORTUNITIES C(i) Specific Challenges Protect Price Competitiveness - A specific challenge for tourism is remaining competitive in a volatile currency environment; - Both government and industry responses to this challenge must mitigate the loss of competitiveness. As such, pricing of all elements (accommodation, alcohol, food, attractions) is crucial. Indirect labour costs were identified as a particularly important component of overall price levels; - There is a danger of standards sliding due to cost-cutting in an effort to maintain competitiveness; - Obstacles to tourism growth must be removed; e.g. remove building height restrictions in Dublin (which would allow for more hotel bedrooms); - Price increases have made the Irish tourism product more expensive. In addition, there is greater hotel availability elsewhere and non-irish hotels are more competitive due to currency and lower overheads. A linked challenge is the ability of the industry to recruit and retain staff in a challenged post-brexit marketplace. Knowledge Gap - More market research is needed regarding what motivates tourists to come to Ireland and to different regions in Ireland; - It is important to fully explore the size of the prize to identify the true level of conversion of consumers from a general interest in visiting Ireland to actual bookings. There is concern that the Peace Process may be at risk; There is a risk of over-branding too many experience brands which could dilute the overall Ireland brand; The future of Interreg funding and further EU funding relating to the Peace Process is uncertain; Tourism is a long-term initiative focus is often on short term rewards, whereas long term goals must be worked towards at the same time. Page 9

C(ii) Industry Response The tourism industry needs to respond with a focus on providing value-for-money, even in the challenging context of the fall in Sterling value. GB is perceived as more pro-active, more competitive, better value-for-money, at the moment. There is a need for Fáilte Ireland to work with the border counties to create new tourism products in these areas,e.g. identify, develop and resource local Hidden Gems, and introduce a new brand along lines of successful WAW and Ancient East. More collaborative efforts are required between small tourism businesses, similar to the Skellig pilot (Fáilte Ireland project). One opportunity identified is around the issue of Non-British Passport holders who work in the UK, who could possibly be expected to apply for a Green card type of visa post Brexit in order to continue living and working in the UK. Many of those who work in the tourism and hospitality industry in the UK would fall into this category. Ireland could attract these people to Ireland to fill skills gaps here. The industry could offer Visa Packages to individuals who wish to travel to Ireland and Northern Ireland/UK in order to facilitate travel. C(iii) Government Response The 9% VAT rate and 0% Air Travel Tax need to be retained; A higher profile for tourism within Government Department structures would be beneficial. Greater communication between Government Departments is required; Infrastructure to and from ports needs to be improved, to increase Ireland's attractiveness for cruise tourism; Government should reaffirm Ireland s clean and green image; Since Ireland is focusing on diversification, more funds are needed from Government to support these new initiatives as well as to defend existing markets; There is insufficient State funding in tourism (marketing, capital infrastructure, reducing cost base for industry and skills development) to enable Ireland to capitalise on opportunities and deal with the threats; Government could look at reducing cost burdens such as rates, taxation etc., as alternatives to increased funding and to enable industry to compete; Page 10

Ireland needs to be sold as a transatlantic gateway for the US to Europe; In order to make any impact during Brexit negotiations, as well as post-brexit, the organisations and roles of the tourism agencies including Tourism Ireland need to be examined; The uniqueness of Ireland s position needs to be emphasised with the EU; The voice of Tourism needs to have a specific representation to influence the agenda in Brussels (it does not at present); The perception of Ireland as a neutral country that is staying in the EU needs to be reinforced; Ireland should engage with the Governments of other tourism destinations that are heavily dependent on GB as a source of visitors (e.g. Spain) to examine what we can learn from each other with regard to the response to Brexit from a tourism perspective; Cross-border partnerships and funding arrangements made by Local Governments could be at risk, and EU funding could be withdrawn. 5. CLOSURE OF MEETING Minister Patrick O Donovan T.D., Minister of State with special responsibility for Tourism & Sport, closed the meeting. He thanked all for their participation saying that he was very impressed by the level of engagement of all participants. He said that he would take the points raised back to Government and that the issues raised would be reported on at the next All-Island Sectoral Meeting on 17 th February 2017. Page 11