27/3/2014: 2012-2013 Trends in Toursim & Travel to Ireland

Here is the data for Overseas Tourism and Travel for Ireland for Q4 2013 and full year 2013. Please note: due to changes in data reporting, we only have 2012 and 2013 figures as comparatives. Note: key takeaways are summarised at the bottom of the post.

Let's start with spending by visitors:

• In 2013, overseas travellers to Ireland spent EUR3,262 million on their stay and fares, which is 11.9% higher than in 2012. In Q4 2013, the rise y/y was 6.9%.
• Air fares paid into Irish carriers rose only marginally in 2013 compared to 2012 - up by just 0.9% to EUR864 million.
• This means that bulk of increase came from non-transport spend. Total overseas tourism and travel earnings rose 9.4% y/y in 2013 to EUR4,126 million. It is worth noting that Q4 2013 y/y rise was 3.7%.
• Key takeaway: these are positive numbers, indicative of a recovery in the sector and supportive of the data on employment growth in the sector.

Chart to illustrate:

The above figures are gross and exclude trends for Irish travellers abroad. Including these:

• Tourism and Travel Balance - trade balance computed by netting out overseas tourism and travel expenditure by irish residents abroad - registered a deficit of EUR337 million in 2013, which is a significant improvement on deficit of EUR640 million in 2012.

In terms of visitors numbers, things are a bit more complex:

• Total number of overseas visitors to Ireland rose to 6,986,000 in 2013, up 7.2% y/y. Q4 2013 also registered a rise of 9.9%.
• However, increases in visits to friends/relatives - those including visits by return emigrants - rose 10.8% y/y to 2,014,000. In other words, 42% of the total rise in number of visitors was accounted for by potential visits by Irish emigrants. 
• Business visitors numbers posted a weak increase, despite big inflows of EU officials traveling to Dublin during the Presidency, rose only 5.1% from a low base. This increase accounted for only 12.8% of the total increase in overseas visitors. In fact in the last six months of 2013 (after the end of our presidency) the number of business visitors to the country fell 9.3% compared to the same period of 2012. The evidence clearly does not support claims of improved business activity.
• Visitors numbers for the purpose of holiday/leisure/recreation activities rose 8.0% y/y in 2013 to 3,059,000. This is good, but it is less robust than the aggregate numbers. 
• Thus, total visitors numbers excluding visits to family and friends reached 4,972,000 in 2013 which is up 5.8% y/y/.
• Key takeaway: Good news is that visitors numbers are growing. Less positive news is that growth in the numbers of visitors for leisure and business purposes is growing much slower than the headline 9.9% figure cited by everyone is concerned.

Next - onto average duration of stay:

• In 2013, average duration of stay by visitors for all reasons for journey averaged 7.125 days, which is down on 7.275 days for 2012. In Q4 2013, average duration stood at 6.8 days against 7.2 days in Q4 2012. Thus the decline in average length of stay is not due to shorter-term visits associated with official travel during the Presidency. In fact, business trips duration averaged 5.35 days in 2013 - up on 4.925 days in 2012.
• Holiday and recreation trips duration average remained static in 2013 at 2012 level of 6.25 days. So the entire decrease was down to visits to friends and relatives shrinking from 7.325 days on average to 7.2 days.
• Key takeaway: people are traveling more, and staying roughly the same amount of time.

Last, average spend per visitor:

• Overall average spend per visitor to Ireland stood at EUR581.07 in 2013, up 1.58% on 2012 levels - which is a weak increase. In Q4 2013 average spend actually fell 5.6% y/y.
• Excluding air fares, average spend rose 3.8% y/y to EUR420.89 in 2013 compared to 2012.
• Of all countries tracked, decrease in visitors was recorded only for Italy. 
• Largest increase (full year figures) was recorded for visitors from Great Britain (accounting for 33% of the total rise and 42% of all visitors to Ireland)a and the US (accounting for 30.1% of total rise in visitors numbers and 16.6% of all visitors to Ireland.
• Smallest increase (as opposed to drop) was recorded for visitors from Other countries (excluding GB, US, Australia & New Zealand, and Rest of Europe. 
• In terms of average spend, chart below summarises for Q4 2013 compared to Q4 2012.

Key takeaways from above:

• Overall: positive numbers, indicative of a recovery in the sector and supportive of the data on employment growth in the sector
• Trade balance on tourism sector is still in deficit, but improving
• Less positive news is that growth in the numbers of visitors for leisure and business purposes is much slower than the headline 9.9% figure cited in the media
• There are more people traveling to Ireland, and they staying roughly the same amount of time
• Overall average spend per visitor to Ireland stood at EUR581.07 in 2013, up 1.58% on 2012 levels - which is a weak increase. In Q4 2013 average spend actually fell 5.6% y/y
• In Q4 2013, spend fell for all groups of travellers excluding those from Germany and from 'Other countries'
• Visitors from 'Other countries' have now overtaken visitors from the US in terms of per-person spend on their trips to Ireland.

1/7/2013: Good Numbers on Trips to Ireland: January-May 2013

Good numbers on trips to Ireland from abroad for January-May 2013:

March-May (3mo) y/y rises were:

• Trips to Ireland from Great Britain + 5.6% (below the overall rate of rise of 8.1%);
• Trips to Ireland from Other Europe + 9.6% (above the overall rate of increase);
• Trips to Ireland from North America + 12.6% (substantially above the overall rate of increase); and
• Trips to Ireland from Other Areas + 3.2% (well below the overall rate of increase)

January-May (5mo) y/y rises were:

• Trips to Ireland from Great Britain + 2.8% (below the overall rate of rise of 6.4%);
• Trips to Ireland from Other Europe + 8.5% (above the overall rate of increase);
• Trips to Ireland from North America + 12.8% (substantially above the overall rate of increase); and
• Trips to Ireland from Other Areas + 4.9% (below the overall rate of increase)

More details here: http://cso.ie/en/media/csoie/releasespublications/documents/tourismtravel/2013/overseastravelmarmay2013.pdf

14/11/2011: Tourism to Ireland - Q3 2011 data

Q3 2011 data for overseas travel to and from Ireland is out today and here are the updates.

From the top figures:

• In Q3 2011, total number of overseas trips to Ireland rose 6.49% yoy (+129,600 visitors). Relative to peak of Q3 2007, the number of visits to Ireland remains down 19.66% (-520,200 visitors).
• Number of overseas trips from Ireland fell 7.02% yoy (-150,000) and is down 15.64% on peak of Q3 2007 (-368,500 visitors).
• Net travel to Ireland in Q3 2011 was 139,000, up on 10,600 in Q2 2011 and up on -140,600 in Q3 2010, making this quarter the second highest in terms of net number of visitors to Ireland since Q1 2007 and the highest since Q3 2007.

• Numbers of visitors to Ireland from Great Britain rose to 910,500 in Q3 2011 (+6.79% yoy) but remains 28.27% (-358,800) down on same period in 2007.
• Numbers of visitors from Other Europe rose 5.84% yoy to 741,800 in Q3 2011, but remains down 15.09% on Q3 2007 (-131,800).
• Numbers of visitors from North America rose 5.17% yoy (to 350,000) and is down 10.33% on Q3 2007.
• Proportionally, visitors from Great Britain to Ireland comprised 42.82% of all visitors to Ireland in Q3 2011, up on 42.7% in Q2 2011, but down on 47.96% in Q3 2007.

So overall, some encouraging news for tourism and transport sector. This is especially encouraging since Q3 2011 was a quarter of heightened economic concerns across the EU, UK and the US, so it is hard to argue that some sort of 'recovery bounce' is driving tourists to Ireland. Which might suggest that improved costs of hotels and associated services are working through to make Ireland more attractive destination. That and PR stunts by the Queen and the US President?

PS: after I have posted the above, one of the twitterati @hayspender came back with a comment:
"you dont think zombie hotels have a influence also? ie not true economics!" I agree, sometimes, when you write, not all possible permutations of potential causes can be captured. Of course, part of the 'improved competitiveness' is the factor of NAMA-owned hotels which receive an implicit (and very real) subsidy on their capital costs, allowing them to offer rooms at rates well below true cost that is faced by other hoteliers.

Yet another potential factor, also overlooked by me and flagged by another twitterati, is that some of the overseas travel relates to people commuting for work. This, however, does not appear to be reflected in the data, since the CSO releases data based on surveys which do collect information about the residency of travelers and reasons for travel.

Economics 21/11/2009: Travel figures

Just the facts... so as not to be too controversial.

CSO's travel to Ireland data for September 2009 released yesterday:

Chart 1: 

The above shows a significant month-on-month fall in September. But it does not show the underlying trends:

The difference between trips to Ireland less trips from Ireland revels two things. First - a general downward trend in the series over time. Second, in terms of annual averages: a drop from pre-2008 average to 2008 average was followed by a further drop in 2009 average to date. If the correction was due to a recession, one would expect to see some stabilization in 2009, especially per summer months. This would have pulled the average line for 2009 above 2008 line. But it did not happen. Something other than a recession is working through our travel data. May be, just may be, it has to do with the overall cost of traveling here?.. If so, the Rip-off-Republic surely starts at the point of entry - the taxes and charges feeding into airfares (not airfares themselves, with or without baggage fees, Irish airfares are relatively cheap compared to other countries).

The same patterns are showing through in trips taken to Ireland by main countries of origins. Note that I did not show linear trend lines, but it is negatively sloped only for Great Britain, while sloping up for Other Europe and North America. The fact that current annual averages are completely out of line with general longer term trends and that 2009 represents continued deterioration on 2008 suggests once again that something more sinister than a recession is working through our figures.

I can't resist doing some analysis here. Chart below shows linear trends in travel data (difference between trips to Ireland and from Ireland) over time periods concerned.

So what do these lines tell us? The blue line reproduces the results from the second chart above - this is the historic trend toward secular decline in net trips from abroad to Ireland. Yellow and pink lines show linear trends for 2008 and 2009. These lines are parallel, but 2009 line is below 2008 line, which means that the rate of change in the number of trips to/from Ireland did not change between 2008 and 2009, but the intercept declined year on year. In other words, this deterioration in trips to/from Ireland has nothing to do with continuous recession (slope effect), but everything to do with a consistent travelers' selection against Ireland as a destination. The same is confirmed by comparison of the yellow line (2009 trend) against the green line (2008 & 2009 trend), as well as by comparison of pre-2008 trend line (blue) against the 2008&2009 trend line (green).

Daily economics update 19/03/2009

Excellent piece on Irish Nationwide excesses here - I would certainly encourage everyone to read through it.


On the news front -

Ireland:
Per CSO (here): the number of overseas trips by Irish residents fell by 8.4% to 502,100 in January 2009 compared to the 548,400 a year ago. Brian^2+Mary's tax on travel and recession biting. And euro's steady rise has taken a bite out of travel to Ireland too: there were 424,200 overseas trips to Ireland in January 2009 - down ca3% on 2008. "Visits by residents of Great Britain accounted for virtually all of this decrease, falling by almost 16,000 (7%) to 208,300." Needless to say - this is costing this country. Visits by residents of Other Europe and North America recorded slight increases to 149,500 and 45,200 respectively. No breakdown on vitally important length of stay and locations visited by foreign tourists here was made available. The crucial point missing here is just how bad is it going to get for Irish hotels, located outside Dublin. In recent months, these palaces of rural kitsch built on the back of senile tax breaks to developers, courtesy (in part) of Brian Cowen in his tenure as Minister for Finance, have been popping out of business like flies in late autumn.

Also courtesy of CSO:
Monthly factory gate prices increased by 0.9% in February 2009, as compared with an 0.2% rise recorded a year ago, the annual increase of 3.9% in February 2009, compared with and annual rate of growth of 3.2% in January 2009. Inflation cometh? Well, possibly. In the year the price index for export sales was up 4.3% while the price index for home sales was up 1.7%.

Wholesale price changes by sector of use shows that: Building and Construction All material prices decreased by 1.2% in the year since February 2008 (surprisingly, very small deflation in the face of all but collapsed construction), and there were increases in Cement (+8.0%), and Stone, sand and gravel (+4.8%). At least Sean Quinn can always go back to mining boulders. Year on year, the price of Capital Goods decreased by 0.1%, and the rate is accelerating to -0.4% last month. The price of Energy products increased by 5.2% in the year since February
2008, while Petroleum fuels decreased by 17.9%. So ESB and Board Gais are still ripping us off, while teh Government is fast asleep. In February 2009, there was a monthly increase in Energy products of 0.4%, while Petroleum fuels increased by 1.6%.

But hey, the good news is that we are now in a 'breeding boom'. According to the CSO, there were 19,027 births registered in Q2 2008, an increase of 1,900 on 2007. Q2 2008 total is 40% higher than in 1999. "This represents an annual birth rate of 17.2 per 1,000 of the population, 1.4 above quarter 2 of 2007. This rate is 2.7 per 1,000 population higher than in
1999."

Incidentally, the latest US data shows that the country population is also booming. The preliminary estimate of births in 2007 rose 1% to 4,317,119, the highest number of births ever registered for the US. The general fertility rate increased also by 1% in 2007, to 69.5 births per 1,000 women aged 15–44 years, the highest level since 1990.

Clearly a good sign for Brian^2+Mary, who can now rest asured that Irish families are producing more future taxpayers for the Government to continue ripping off ordinary families. The bright future is at hand at last for public sector wages and pensions.


US:
There are some signs of longer-term lead indicators revival in the US. Much has been said about housing starts bottoming out and the fact that these are only long-term lead indicators for house prices (see here).

Unemployment - new claims have fallen by 12,000 to 646,000 in t he week ending March 14, while the numbers collecting unemployment benefits rose by 185,000 to a record seasonally adjusted 5.47 million by March 7th. The four-week average of new claims also rose by 3,750 to 654,750, the highest level in 26 years. Still, at least some things are starting to move in the right direction.

In the mean time, General Electric said it now expects GE Capital Finance unit to be profitable in Q1 and for the full year 2009. This follows a recent $9.5bn injection of capital by the parent. This, if holds through the year, is good news, as GEFC has been at the forefront of writing dodgy loans and mortgages to distressed consumers in 2005-2007.

Of course, Wednesday data was also showing some signs of the bottoming in the US recessionary dynamics. US consumer prices increased a seasonally adjusted 0.4% in February, primarily on the back of a 3.3% rise in energy costs (8.3% rise in gasoline prices). Food prices fell 0.1% in the first decline since mid 2007. Core CPI (ex Food and Energy) was up 0.2% - a nice range signaling possible end of deflation.

This is not to say that the current rallies are sustainable. So far, we are starting to see some early stage recovery indicators attempting to find the floor. It will take couple of months for them to start turning. But the markets will remain bearish until the second stage indicators start flashing upward turn-around. These are existent unemployment claims, construction indices, pick up in resale markets activity, PMIs etc. Until then, you'll have to be brave to wade out of the cash safety into individual equities.

And the latest news on the second stage indicators is poor. The index of leading economic indicators - designed to forecast economic activity 6-9 months ahead - fell 0.4% in February, following a gain of 0.1% in January 2009. Overall, 6 out of 10 indicators were up in February and 4 were down. According to Ian Shepherdson, chief economist with High Frequency Economics, "The trend remains clearly downwards, consistent with continued outright contraction in the economy."