“Reacting To Marketplace Dynamics: The Key Elements Of

New Tourism Policy”

Professor Jim Deegan Director, National Centre for Tourism Policy Studies

& Head of Department of Economics

University of Limerick

NOVEMBER 2014

Paper Outline

1. Introduction

2. The Failure to Embrace Tourism For Economic Development in Ireland

3. Evolution of Mass and New Tourism

4. The Main Components of “New Tourism Policy”

5. The New Draft Tourism Policy: A Critique

6. Conclusion

Total Overseas Visitors to Ireland

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011

Tou

rist

nu

mb

ers

(0

00

's)

Total Overseas Visitors to Ireland (000's)

No. of Visitors

Figure 1

World Tourism Arrivals (Millions): 1950 to 1995 and Forecast to 2020

Forecast Made in 1995

25 55 70 110165

210287 327

458564

697

1,018

1,600

0

200

400

600

800

1000

1200

1400

1600

1800

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2010 2020

*Actual Arrivals in 2010 Were 940 million

Figure 2

Consumers:- Sun-lust

- Inexperienced

- Mass consumption

- New-found prosperity

Mass tourism

Management:- Sameness of hotels

- Hotel and holiday branding

- Promotional air fares

- Mass marketing

- Credit cards

Production:- Cheap oil

- Extensive hotel construction

- Charter flights

- Packaged tours

- Airline oligopolies

- Multinational hotel chains

Technology:- Jet aricraft, automobile

- Computers, telephone, telex

- Limited reservations systems

- Accounting systems

Frame conditions:- Postwar peace and prosperity

- Paid holidays

- Government tourism promotion

- Regulation of air transportation

- Incentives to attract hotel chains in developing countries

Factors responsible for the spread of mass tourism From 1960s

Figure 3

Figure 4

Consumers: - Experienced travellers - Changes in values - Changes in lifestyles - Changing demographics - Flexible - Independent

New tourism

Management: - Mass customisation - Yield management - Market segmentation - Innovative pricing

Production: - Diagonal integration - Production flexibility - Integration of marketing and product development - Innovation - Customer-driven

Technology: - A system of information technologies - Rapid diffusion - Adoption is industry-wide - Technologies “talk” to each other

Frame conditions: - Airline deregulation - Environmental pressures - Consumer protection - Flexibility to take holidays any time of year - Actions by host countries - Disenchantment of host countries with the benefits and costs of mass tourism

Factors responsible for the spread of new tourism From 1980s to Today

2030 Predictions

Number of International Tourists (mn)

Actual 2012 arrivals 1,036

Central prediction for 2030 1,800 (↑ 74%)

Prediction for 2030 with slower economic growth

1,400 (↑ 35%)

Prediction for 2030 with higher costs of transport

1,660 (↑ 60%)

Prediction for 2030 with lower costs of transport

2,000 (↑ 93%)

adapted from UNWTO

Emerging Markets Will Play a Key Role In Tourism Across The World

Figure 5

Rev €m

2002 Prices

2002

Actual

2006

Target

2006

Actual

2012

Target

2012

Actual

Overseas

Visitor Spend

3088 3835 3.80 6000 2.95

No Visitors

(m)

Britain 3.5 4.1 3.82 5.5 2.72

M.Europe 1.4 1.7 2.25 2.3 2.24

N.America 0.8 1.0 1.03 1.8 .94

Other Areas 0.2 0.3 0.31 0.5 .37

Total 5.9 7.0 7.41 10.0 6.686

Overseas Revenue & Visitor Target Numbers to 2012 & Actual Outcome

Source: New Horizons for Irish Tourism & Fáilte Ireland

Relative Position of Irish Tourism in the Global and

European Travel Market

0

0.01

0.02

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Shares o

f Ir

ish T

ouris

t A

rriv

als

Irish Share in the Global Travel Market

Irish share in the European Travel Market

Linear (Irish share in the European Travel Market )

Figure 6

% Market Share 2000-2012 (source: UNWTO)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Per

cen

tage

%

Year

Global Share

European Share

Figure 7

0

2

4

6

8

10

12

14

16

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Per

cen

tage

%

Year

Northern European Market

Northern European Market

Figure 8

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Vis

ito

r N

um

be

rs (

oo

o's

)

Year

Main Purpose of Visit: Britain

Holiday

VFR

Business

Other

Figure 9

0

10

20

30

40

50

60

70

1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Pe

rce

nta

ge (

%)

Visitor Market Share 1985-2013

Britain

North America

Mainland Europe

Other Overseas

source: Failte

Ireland

Figure 10

Appendix 2

INTERNET TRENDS 2014

SLIDES COURTESY OF

MARY MEEKER

Kleiner Perkins Caufield & Byers