What can we expect from tourism in 2023?

Opinion: the tourism industry now has an opportunity to reconsider what high value, high quality tourism looks like

The year 2022 presented many challenges for Irish consumers and has accordingly impacted their spending power. From the ongoing war in Ukraine, ever increasing rates of interest and inflation and rising fuel price, it is not surprising that consumer confidence has taken a hit.

The Flash Release Budget in November 2022 suggested that "the domestic economy is set to recover to above pre-pandemic levels" and although the Government has provided tax allowances and energy credits to help the average household, consumer spending was down 8% in September from the previous month. In particular, social spending declined by 16% (e.g., pubs, restaurants, fast food) and retail by 10%. A cost-of-living crisis has well and truly taking hold.

As with other downward trends, the demand for tourist attractions fell by 31% and hotels/resorts by 26% in 2022. Total airline spending dwindled by 8% in September and a further 3% in October. A drop in hotel bookings was experienced across most Irish cities in the latter part of 2022 with the Irish Hotel Federation (IHF) echoing similar concerns for the industry. In addition to the challenges, the forthcoming pre-Covid VAT rate is expected to be reinstated from 9% to 13% in February 2023.

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From RTÉ Radio 1's Morning Ireland, around 7 million tourists visited Ireland in 2022 as tourism rebounded

The OECD projects a continued economic decline for 2023. The evolving geopolitical and economic uncertainties remain a scourge for travel and tourism. The Irish Tourism Industry Confederation (itic, 2022) claims that a slowing down of markets will not only rock the Irish tourism industry, which has traditionally been very slow to recover from previous recessions, but the entire global tourism landscape. All-in-all, the tourism industry seems to be in choppy waters and the outlook appears dismal and there is little doubt that Ireland and the rest of Europe will experience major difficulties in the tourism and travel sector in 2023.

A wave of new tourism trends based on changing consumer preferences

Despite the doom and economic gloom, the demand for tourism globally is set to remain positive in 2023, and the cost appears to be met by the consumer. The appetite for travel may well be partly explained by a continuation of pent-up demand and holiday deferrals arising from Covid. This drive will undoubtedly contribute to the Irish tourism industry which is further strengthened by new development in access routes and advertising campaigns.

The Wild Atlantic Way campaign targets destinations with a direct route to Shannon to increase tourism along Ireland's west coast. Ryanair announced seven new routes (156 in total) across five Irish airports for their 2022/2023 winter schedule and several new routes are commencing in April. The Island of Ireland co-op partnerships with Aer Lingus, Ryanair, Stena Line, British Airways, Kayak and Expedia will further boost Ireland’s inbound tourism market by promoting bookings in the off-peak and winter seasons.

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From RTÉ Radio 1's Today with Claire Byrne, CEO of the Irish Tourism Industry Confederation Eoghan O'Mara Walsh discusses return to 13% VAT

With the current strength of the US dollar, Ireland has the potential to build on its strong links with the US. Tourism Ireland’s Green Button overseas campaign concentrates mainly on high-capacity markets such as the USA. With easy trans-Atlantic routes into Shannon, Dublin and the new lost carrier ‘Fly Atlantic’ into Northern Ireland, Ireland has historically been an attractive holiday option for US travellers who are deemed high value with a strong return on investment in terms of holiday visitors and expenditure and a desire to visit Ireland. In 2019, 2.13m US visitors came to Ireland generating €1.96 billion.

Sustainability remains high on the tourism agenda for 2023 with increasing demand for more sustainable travel options. Although such options are often fraught with confusion, the demand for a more sustainable tourism industry exists. The question is: are consumers demanding a holiday underpinned by sustainable principles as emerging in the experience itself, or is it driven by an expectation that the industry (providers and suppliers) should take responsibility in its production and supply practices (e.g., Fáilte Ireland’s drive towards climate action in tourism businesses).

A 2022 study carried out by Fáilte Ireland stated that although tourists want more sustainable options, they don’t yet know what sustainable travel means or looks like. Given the demand for more sustainable tourism industry and considering the potential caution for spending with the cost-of-living crisis, perhaps a solution to boost Ireland’s tourism industry is "staycationing", the development of a strong domestic market?

From RTÉ Radio 1's Brendan O'Connor, is the Burren the best place to holiday in Ireland?

A Fáilte Ireland report highlighted that Ireland’s domestic market is a key area of growth representing 73% in 2022 and comprises of both individuals and couples travelling to hotspot areas such as Clare, Cork, Donegal, Dublin, Galway, Kerry, Kilkenny and Wexford. Staycationing offers a means of reappropriation, that is, experiencing Ireland with new eyes, seeing it at its best and celebrating its past – it is seeing the familiar in unfamiliar ways - a process of defamiliarisation.

Social media influencers such as Roz Purcell, are rediscovering Ireland’s hidden gems, nooks and crannies and "off the beaten track" experiences. In doing so, Roz is promoting staycationing, holidaying in Ireland, to a captive audience of 1m followers who represent a generation who desire high quality, sustainable tourism experiences.

Self-care holidays and the importance of prioritising one’s wellbeing have been gaining in popularity for the past few years, especially for the post-Covid, fatigued consumer. Experiences of this sort are based on immersion in nature, connections with local cultures and communities that positively contribute to one’s mental and emotional wellbeing.

Read more: Why you should travel solo this summer

"Unlocking Wellness in Kerry" is an example of a campaign geared up to promote wellbeing as part of the tourism experience. It provides an alternative view in the mind of the consumer in terms of what Co Kerry has to offer, such as exploring the stunning scenery on horseback to Wild Atlantic Sea baths overlooking the ocean. The rise in detox and yoga retreats that promise to "produce clearer states of consciousness" and the demand for green and blue spaces has experienced new highs.

Ireland’s natural heritage represents an authentic experience for nature entanglements with its 85 pristine blue flag beaches (plus 10 marinas in 2022) and 62 Green Coast Awards. Such places provide an outstanding landscape for various tourism purposes related to wellness. Although the demand for self-care holidays has existed for many years, the concept arguably gained credible traction during the pandemic.

Bottom line: 2023 provides an opportunity for the tourism industry to reconsider what high value, high quality tourism looks like. This is an important time given that the continuous waves of disruption appear to be reshaping consumer preferences towards a more value-focused individual. The tourism industry must reflect consumers’ shifting preferences and value sets that are underpinned by high quality, sustainable tourism experiences.

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From RTÉ One News, a record 95 beaches and marinas receive the blue flag

However, it is also important to be cognisant of the fact that many households are or will be living in poverty due to the cost-of-living crisis. Staycationing provides a positive solution for Ireland’s domestic tourism market as it not only contributes to the economy, it is potentially more affordable (with no air travel to consider), and it can also, arguably, offer a more sustainable option (with less carbon emissions).

Tourism must not be seen as a luxury only to those who can afford it, it is a necessity for all. Tourism experiences provide a release valve for individuals which is indispensable in difficult times and can offer a multitude of health benefits. The pent-up demand for tourism and travel post-Covid epitomises this basic need, and it is the basis on which people can regulate their mental and emotional wellbeing.

The views expressed here are those of the author and do not represent or reflect the views of RTÉ