Does tourism get better than this?
TOURISM in Northern Ireland has been riding the crest of a wave for the past seven years. 'Our Time: Our Place 2012' embraced all that is great about this country and packaged it into a saleable proposition.
I’m not sure we were quite ready for the sudden jump in visitor numbers, but we managed our way through it and proved to everyone (including ourselves) that we can organise, host and manage large scale events better than most.
Success breeds success, and with the increase in visitors has been a surge in new hotel openings, especially in Belfast. With around 5,000 bedrooms, supply in Belfast has doubled in a decade with around 1,200 bedrooms being added in the past year. Naturally, this has had an adverse impact on average occupancy rates with monthly declines of up to 5.5 percentage points, but average room rates continue to increase albeit the rate of growth is slowing.
More importantly, the number of overnight stays taken at hotels in the city in the first half of 2018 has increased by around 15 per cent. It is in other forms of accommodation and in peripheral areas that the displacement impact of more hotel bedrooms in the city has been felt. But the same thing happened almost a decade ago when new supply entered the market just as the recession took hold.
Back then, panic set in and room rates collapsed, but there was still underlying growth in demand. All of the hotels that served the market then, still serve it today – there’s a message there surely?
Across Northern Ireland, the number of hotel rooms occupied and room rates each increased by 6 per cent in the first six months of this year. Demand increased in other accommodation types, so the industry continues to move forward. And yet I'm convinced we still have a decade or more of growth potential.
The contribution of the industry to the local economy is somewhere around 6 per cent of GDP. In neighbouring countries, tourism contributes between 8 per cent and 17 per cent of the respective national GDP. So, to compete in relative terms tourism in Northern Ireland could double. Can we realistically achieve that?
I think we can, but it will take time, patience and investment. We have most of the pieces of the jigsaw puzzle that we need – outstanding scenery, world class attractions, culture and heritage by the bucket load, exceptional locally sourced and produced food and drink and great people – all of which visitors cherish.
We certainly need to develop more attractions, but one of our current limitations relates to infrastructure. Substantial accommodation development in Belfast is not reflected elsewhere and this is limiting our appeal to certain markets. There is latent demand for quality accommodation in destinations outside Belfast which we cannot service. With The Open returning in 2019, this problem is going to get worse before it gets better.
Access remains a problem. There are around 500,000 scheduled airline seats a week on to the island, with the majority of those on Dublin’s multiple routes into Europe, the UAE, China and North America. Yet we cannot sustain a budget transatlantic service.
We need to get serious about supporting route sustainability and new development or it’s time to view Dublin as our primary international gateway and drive visitors through that channel. Not ideal.
If we do not achieve our potential, it is not because visitors are not coming to the island. It’s simply that not enough are coming here.
:: The NI Hotels Federation Hospitality Exchange conference takes place on Tuesday and Wednesday October 16/17 in the Crowne Plaza Belfast. One of this year’s panellists on the business breakfast is Michael Williamson from ASM Chartered Accountants. Whether you own, manage or work in hotel, B&B, pub, restaurant, museum, airline or coffee shop and you want to tap into innovation to drive business, then log on to hospitalityexchange.co.uk for details. To book your space call NIHF on 028 9077 6635.