Tourism remains a bright spot for Northern Ireland economy
THE Northern Ireland economy has faced a challenging 18 months but, as we approach the summer, it's important to remember that it's not all doom and gloom - because tourism in particular remains a bright spot, and is something we can, and should, feel optimistic about.
When the Northern Ireland Statistics and Research Agency (NISRA) published its 2017 tourism statistics last month, the numbers made for pleasant reading.
It is estimated that people made around 4.9 million overnight trips to Northern Ireland last year, with associated spending of approximately £930 million.
These numbers mark the latest point in what has been an upward trend in both trips and spending since 2011. Back then, the number of trips was estimated to be just under 4 million and spending on these trips was about £640 million.
Breaking the numbers down further shows that 55 per cent of the overnight trips were external, meaning they were trips made by individuals from Great Britain, Ireland and the rest of the world.
The top five countries from which people visited Northern Ireland were England, Ireland, Scotland, the US and Germany. The remaining 45 per cent of trips were domestic, meaning they were made by people from Northern Ireland.
However, the numbers paint a slightly different picture when expenditure is broken down, with a greater share of total spending derived from the external trips. Those coming from outside Northern Ireland were responsible for around 70 per cent of tourism spending, with domestic tourism accounting for some 30 per cent.
The tourism surveys also revealed that Northern Ireland had a hotel occupancy rate of 73 per cent last year, with Belfast topping the table in terms of hotel occupancy with a rate of 80 per cent.
There were 112 cruise ships that docked in Northern Ireland, up from 32 in 2011. And the Giant's Causeway and Titanic Belfast were the two most popular visitor attractions in 2017, excluding country and forest parks.
There are a number of reasons why tourism here is enjoying a boom. There is a collection of existing and new tourist attractions, such as the aforementioned Titanic Belfast, which was named the World's Leading Tourist Attraction in 2016.
Northern Ireland has played host to a number of sporting events in recent years, including the Irish Open golf tournament in 2015 and 2017. We also continue to reap the benefits of people coming to Northern Ireland to visit the places they have seen on TV, notably on Game of Thrones.
Factors such as these contributed to Lonely Planet naming Belfast and the Causeway Coast as its number one region to visit this year. This has all enhanced Northern Ireland's reputation as a place to see and the numbers show that people from around the world have made the trip to these shores.
In addition, economic factors – namely the movement in the value of sterling following the EU referendum – also likely contributed to Northern Ireland's stellar tourism performance last year.
In annual average terms, sterling was around 7 per cent weaker against the euro in 2017 than it was in 2016, and 17 per cent weaker than in 2015. Against the US dollar, the numbers are 5 per cent and 16 per cent respectively.
A weaker sterling makes it cheaper for overseas visitors to come to Northern Ireland as they have to spend relatively less of their own currency to buy pounds. This may have played a role in people's decision to visit last year.
Much has been said recently about the positive impact that the weaker currency has had on exporting businesses here and, linked to that, there is an interesting thing to note about tourism spending – it is actually an export.
It may not seem as obvious as a business selling a car overseas or providing legal services to a foreign client, but when international visitors spend money on accommodation, restaurants and entertainment, this enters the national accounts as an export of services.
The United Nations World Tourism Organisation estimates that tourism accounts for around 7 per cent of world exports and 30 per cent of global services exports. So tourism spending could make an important contribution to boosting Northern Ireland's export performance.
Looking forward, there are reasons to be optimistic about the prospects for tourism in the years ahead. A number of new hotels have recently opened their doors in Belfast, with more set to follow, providing an increased number of beds for those wanting to visit our capital city and the surrounding area. The number of cruise ships arriving in Belfast in 2018 is expected to be 25 per cent higher than last year.
And next year the Open Championship will take place at Royal Portrush, attracting thousands of spectators and placing Northern Ireland, and its golf tourism, in front of potential visitors from all over the world.
But while there are undoubtedly opportunities for tourism-related businesses, there are some challenges too. I frequently hear from businesses that they are currently facing difficulties recruiting staff and this is a pertinent issue for hotels, restaurants, retailers and other firms that play a key role in our tourism offering. These businesses also tend to have a relatively high reliance on EU nationals and so potential restrictions on EU migration after Brexit is a serious, long-term, risk.
The Northern Ireland economy faces a number of headwinds and, in overall economic growth terms, this year and next year are unlikely to set pulses racing. But tourism is one area that is performing strongly. Can we take advantage of the opportunities above and make even further gains in this area? I think so.
:: Conor Lambe is Danske Bank economist in Northern Ireland. Follow him on @ConorLambe