Tourism: Success, survival and a story to tell
Janice Gault, chief executive, Northern Ireland Hotels Federation, talks about the green shoots of tourism growth ahead of Hospitality Exchange this week.
Northern Ireland tourism appears to be very much on the up. Last year saw an increase in visitor numbers, a substantial contribution of £751m to the local economy and in excess of 60,000 jobs being supported by the sector. It seems that hardly a day has gone by over the summer without the announcement of a new hotel project. Whilst the majority of these are located in Belfast, there are green shots of growth beginning throughout Northern Ireland.
The culmination of the last significant period of growth in the hotel sector coincided with the start of the worst recession in global history. As demand for hotels fell, room rates hit the floor and the industry moved into survival mode. Hotels have proved to be a resilient lot. They have learnt to cut costs, promote deals and focus on what is important to the customer. With a new hotel boom on the horizon, hoteliers are making sure that they look after their core customer base. Prices have remained competitive and profits have been invested back into the fabric of the hotel property. New hotels are keen to define their offering adopting a distinctly Northern Ireland flavour as a unique selling point. They are embracing trends in designs, adopting a flexible approach to dining and setting themselves apart from the pack.
Technology has revolutionised the travel trade perhaps more than any other industry. Airline travel, driven by the budget airlines, has made travel accessible and has opened up new destinations. Multiple trips and short breaks have really grown. There is no doubt that Northern Ireland is an ideal mini break destination; our competition is now worldwide with lots of interesting and accessible places but we have learnt that we have our own story to tell and from this telling comes our success.
The 2012 Our Time, Our Place campaign gave us confidence and set us on a path of growth. The signature projects that featured in this campaign including Titanic Belfast and the Giants Causeway altered the tourism landscape in Northern Ireland irretrievably. These sites along with the events that we staged during that year gave us a real pride in our product and saw the tide of tourism turn.
The advent of technology has also brought the on-line travel agent (OTA) to the fore. Companies like booking.com have welded themselves in limpet-like fashion to the hotel product. Often portrayed as the enemy within, their growth has been meteoric. With colossal budgets and global reach, hotels have struggled to compete in the fight to attract customers whilst paying massive commissions to the OTA. However, hoteliers are now examining their role carefully deploying the on-line option in a more strategic manner to market to customers they could not afford to reach. Many see the OTA as another marketing tool and have used this route to complement their business. The tactics and business contracts that some OTA’s demand are also being scrutinised by governments with many recognising the unfairness of some of the tactics that are being used. New legislation and the recognition of fair play will go some way to redress the balance in the David and Goliath nature of the Hotel versus OTA relationship.
On the plus side, global reach brings visitors from further away. In addition to helping grow tourism, the long haul visitor spends more, stays longer and opens up a huge market for us. The domestic market dominates Northern Ireland’s visitor mix with 52% of the 4.5m visitors in 2014 being local. Indeed, only 14% of visitors come from beyond the British Isles. Things have improved but access remains an issue with limited direct routes and a higher passenger tax for those travelling within the UK.
Air passenger duty
The industry looks with envy to south of the border where Air Passenger Duty has been abolished and passenger numbers have grown by double-digit levels. A favourable tax regime has led to record visitor numbers in the Republic of Ireland. We have learnt that if tourism needs to be seen as a key economic driver, Government needs to advocate policies that improve the business climate. The introduction of a lower VAT rate and the abolishment of air passenger duty are working examples of policies implemented by an administration that takes tourism seriously. An affordable and workable visa scheme like the Schengen system in Europe opens up a destination by reducing bureaucracy and cost. Tourism has the ability to bring benefits to every corner of Northern Ireland. Accommodation is set to being 1,800 jobs by 2020 more than agriculture. The Industry has learnt that we have to get government on all levels in the UK to take the sector seriously and adopt tourism friendly policies.
The physical assets of the industry are often lauded and praised; however our greatest asset by far, is our people. They are the differentiating factor and the true stand out for this destination Northern Ireland. We need to attract more of them, show them that we have a great career on offer and encourage them to stay in the sector. As a collective, we have discovered the need to improve our image and show that we can provide a successful career path with excellent rewards. Engagement with education has improved and with skill shortages starting to bite, the sector is seeing people as an invaluable asset. The industry is set to grow by 15% by 2020 and in order to reach this potential; it must attract people with a passion to drive it forward.
It’s an interesting time for tourism. The last decade has been a real roller coaster ride but better times are on the horizon. All the indicators are positive with a more confident tone. It will be challenging but we have learnt a number of valuable lessons.
We’ve a good story to tell. We don’t need to undersell ourselves and of parodying the Gloria Gaynor hit, ‘We will survive’!