Tourism and industry nosedive

THE impact of the recession on the Mid-West was brought into focus once again this week as Shannon Development’s 2009 end of year results laid bare the grim realities of a region in a worrying state of health in terms of industry and tourism.
At the annual Tourism Roadshow in Limerick last week, the key message from the participating tourism agencies, Tourism Ireland, Fáilte Ireland and Shannon Development, was that an all-out effort will have to be made to halt the massive tourism decline in the Shannon Region.
Both events reflected a common interest in the region on the part of the facilitators and, as could be expected, there was an overlap in some of the details that emerged. The thing is, evidence of the problems have been there for some time and groups and individuals have been sounding repeated warnings. The Tourism Roadshow and Shannon Development’s 2009 review have raised the profile of the mess we’re in.
Slippages in overseas visitor numbers have varied between 2% to 4% in the past but there is now confirmation of a crash of between 22% and 27% from 2008 to 2009. This has sent alarm bells ringing throughout the region and calls for fire brigade action to salvage the industry from total collapse.
Questions must be asked as to why the Shannon Region compares so badly with other places. It is understood that the decline in the West Region centred on Galway and Connemara was 17%, while the reversal in the Dublin region was 6% over the 12 months to the end of 2009.
There must be an analysis of what, if anything, was done differently in these regions to account for the discrepancy in the downward trend. Coach tours are just one area that must be reviewed. It seems that the Shannon Region has lost the bulk of the American coach tour business to the Galway region. At one stage, the principal operators were putting 30 tours a week into Limerick and Clare hotels. That has now shrunk to no more than four coach tour groups per week.
Michael Vaughan, chairman of the Shannon Region branch of the Irish Hotels Federation, is calling for a review of the performance of Shannon Development, Fáilte Ireland and Tourism Ireland and is also demanding action on the ground. 
He said that whatever the final figure turns out to be, a slump on the scale of last year makes the Shannon Region “the basket case of Irish tourism”.
“In the language of English football, what this means is that the Shannon Region has fallen from its position as the Manchester United of Irish tourism and is now in the Third Division,” Mr Vaughan said.
Business at Shannon Development’s Shannon Heritage attractions has provided a good yardstick to measure tourism activity in the region in any given year. The downward trend of the past five years plummeted at breakneck speed in 2009.
End of year figures, which combine numbers of day visitors to attractions and numbers attending castle banquets and other evening entertainments, fell back by 65,000 to 440,000. While not yet divided into day visitors and night time attendances, last year’s combined figures approximate to the 1985 level of 416,000.
To put things in context, in 2000, day visitor figures alone came to almost 580,000. Added to banquet and Irish night attendances of over 136,000 that year, the final tally was 716,664.
On the industrial front, the closure of Dell in Limerick last year with the loss of 1,900 jobs caused a domino effect and many companies around the region that had been stable employers either cut back or closed.
Quite separately, the Shannon Free Zone, once heralded as an oasis of employment in a job-starved western seaboard, is suffering badly as a result of a continuing overall jobs decline. Over the years, companies have come and gone, in the swings and roundabouts of economic influences or a particular company’s own internal decisions, but now job creation is falling well behind job losses, mainly due to downsizing.
At the peak of its performance, the Free Zone employed just over 8,000 people in 2000 but this has slumped to 6,320, a low not seen since the latter half of the 1990s.
In 2009, 260 new jobs were created at the Free Zone but employment numbers fell 11% year on year, from 7,107 to 6,320. This decrease is in line with the national average and Shannon Development chief executive Dr Vincent Cunnane was at pains to note that almost 80% of these job losses were as a result of downsizing and not closures. He also acknowledged that things could have been an awful lot worse had new jobs not materialised.
There were a few other positives to lift the gloom at the industrial park. Shannon Development approved €15.5 million in financial supports to 13 companies in 2009. This support leveraged €57 million in investments, the largest of which was a €50 million R&D investment by Intel. In-house R&D expenditure generally by Free Zone companies saw a further 10% increase over the previous year to €48.6 million.
Shannon Development has also been successful in securing help under the Government’s Employment Subsidy Scheme for 14 Free Zone firms. That €2 million subsidy got commitment from the firms involved to maintain 1,800 jobs.
Dr Cunnane is welcoming signs that “fragile green shoots of economic spring may be emerging” but warned this will involve having the right mix of business supports and continuing to get the message into the international marketplace that Ireland is open for business.
This sounds like a call for “all offers of help gratefully accepted” so likeminded organisations, businesses or individuals have an opportunity to liaise with Shannon Development to help kickstart the economic recovery process in the region.