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Andrew Webb: Time to see tourism as the key sector it is in chase towards £2bn target

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An American tourist stopped me in the city centre last week and asked me for directions and my opinion on the best pub to try.

doubt my suggestion to try all the pubs was heeded, but we are all ambassadors for this place and we have a hospitality sector that needs all the custom it can get after a torrid few years.

Seeing tourists milling about the city centre, something that was such a normal occurrence just three summers ago, has a novel feel about it currently.

It is worth remembering some tourism context from before the pandemic. Globally, travel and tourism growth had outpaced the global economy’s growth rate for nine consecutive years up to 2019 and was accounting for about 10% of the global economy.

Northern Ireland had been no exception to the buoyant tourism narrative and we were really starting to realise our tourism potential.

A period of concerted effort, which saw the opening of the Titanic Belfast visitor centre and events such as the Giro D’Italia, MTV Europe Music Awards and The Open (to name a few), had really paid off.

Prior to the pandemic, tourism in Northern Ireland was enjoying a period of sustained growth and increased confidence. In 2019, there were 3m external overnight trips to NI, the highest number on record. The spending associated with these visitors was £1bn.

The confidence within the sector manifested in hoteliers delivering many more hotel bed spaces across NI. New hotels in Belfast include Hastings Hotels’ Grand Central on Bedford Street, which opened in 2018,

In March 2018, there were 18,200 beds available, increasing to 20,670 less than two years later. This increase in capacity of circa 2,500 beds resulted in almost 1m additional bed nights per annum.

There remains more in the pipeline. As we know, the pandemic stopped us in our tracks, with tourism particularly badly impacted.

Hotel rooms sold here went from close to 2.2m in the year to March 2019 to less than half a million in the year to April 2021. Passengers through our airports fell from almost 8.5m to 1.1m across the same period.

Encouragingly, the recovery is well underway. Traffic counts at the NI border are suggesting that border crossings were back up to 44m in the 12 months to April this year, not far off the over 46m peak before the pandemic.

Apparently — random statistic alert! — 449,000 of these crossings were caravans, the highest number since 2014.

While there are encouraging signs of a tourism recovery, it has quite some distance to go.

The numbers going through our airports are about half of what they were and Grant Thornton estimates suggest that visitor numbers will not recover to pre-pandemic levels until 2024 — bearing in mind that business travel is a significant part of the picture and the ease with which we can all Zoom will impact on this element for longer.

The ambition for tourism here remains undiminished. The aim is to generate £2bn in visitor spend by 2030.

To achieve this, giving people a reason to come to Northern Ireland — and to return — is key.

The return of The Open, Belfast’s plans to have a year of cultural events and a host of other endeavours are important in that regard. Equally important is getting people here.

That is why it is so encouraging to see new air routes announced over the past few weeks.

Ryanair’s return to Belfast International Airport, although seemingly more focused on taking us to sun destinations, does have routes that will boost inbound travel. Likewise, the new routes added by Aer Lingus and Flybe at Belfast City Airport are very welcome additions to the mix.

It is one thing getting tourists to come here, but who serves them when they are here is a growing concern.

We know that inflationary pressures are biting at the moment, but a more pressing concern for the hospitality sector is arguably staff shortages.

The Northern Ireland Hotels Federation has said that there could be as many as 1,000 vacancies in the hotel sector currently. That works out at about one in ten of the sector’s typical staffing levels unfilled.

Across the broader hospitality and tourism sector, that number will obviously be much higher.

Addressing the labour challenge is something that needs to be done urgently if our tourism sector is going to achieve its ambitions.

The doom and gloom of the past few years cannot have helped in pitching a career in hospitality as an attractive idea.

We have a phenomenal tourist product to sell to the world. We need to make sure that we have rewarding careers that attract enough people into the sector so that we can reach our tourism ambitions.

Hospitality Ulster’s new workforce development strategy is therefore a timely addition to the discourse, focusing as it does on recruitment, skills and training, working lives, the image of the sector and infrastructure.

Implementing actions across these themes will require partnership with government and education providers.

It is time to see tourism as the key sector it is and for all parties with influence over its success to act in tandem.

Andrew Webb is chief economist at Grant Thornton

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