TOURISM DEVELOPMENT & INNOVATION

1.4 Rationale for InvestmentThe rationale for investment and preparation of this strategy draws heavily on the Tourism Policy Statement‘People, Place and Policy Growing Tourism to 2025’ which sets out clear and ambitious targets for thedevelopment of Irish tourism. The document recognises from previous investment the ‘contribution thatcapital investment in tourism can make to increasing visitor numbers in the medium term and to sustainableeconomic recovery’ and indicates the Government’s intention in 2016 to fund a ‘further programme tosupport capital investment in tourism’.This policy ‘endorses an evidence-based approach to maximising return on marketing investment, as reflectedin the brand architecture and consumer segmentation model’, and states that ‘future support for capitalinvestment in tourism will be focused on projects that fit within the brand architecture and consumersegmentation framework’.In September 2015 the Department for Public Expenditure and Reform (DPER)launched the Government’s Capital Plan for investment ‘Building on Recovery:Infrastructure and Capital Plan Investment 2016-2022’. The plan indicates anintended investment of 125,705,000 in tourism over this six year 20150929CapPlan.pdf.Fáilte Ireland has now prepared this strategy document to provide aframework for investment of the funds outlined in the DPER Plan.1.5 ScopeThe investment fund is intended to be administered by Fáilte Ireland toprovide support to tourism capital investment projects and initiativesby both the public and private sectors. However, experience from theadministration of the Tourism Capital Investment Programme 20072013 has shown that alignment of capital investment support withinvestment in human capital support such as training and capacitybuilding within business and community networks is necessary toensure that the full intended impact of any capital funding is achieved.While this current fund may have limitations in how it might invest inthese non-capital elements, it would be important to align the priorities ofnational and local development agencies, such as the Local Authorities, theLeader Companies and Údarás na Gaeltachta, that can make investments in thesenon-capital areas, to the priorities identified in this strategy insofar as is possible.To this end, Fáilte Ireland will work closely with the local development authorities andagencies to ensure that priorities are aligned around the key tourism brand propositions whichcan make a real difference for Irish tourism. For its own part, Fáilte Ireland will examine how it can aligninvestment from this fund with the human capital element of other funding programmes as appropriate.In addition to the types of capital development projects that would be expected from this fund, investmentwill also be made in assets which may have a shorter life-span but which are very important in terms ofimproving the visitor experience. These include animation and interpretation projects, digital assets, and theprovision of equipment.A certain proportion of the fund will also be invested in assessing the feasibility of proposed initiatives and inthe technical assistance required to bring them through the planning and development process.A number of delivery mechanisms have been identified in Section 4 of this document, ranging from grantschemes (both large and small), partnership projects and the funding of signature experience plans. It shouldbe noted that focussed grant schemes in particular will be part of a competitive process, where those projectswhich best meet the priority outcomes identified in that call will be given priority for funding.Finally, although this strategy provides a framework for investment over the next five years, in order to ensurethat new trends and insights can be incorporated into the investment fund and that exciting and innovativeprojects can be supported, a mid way review will be undertaken in 2018 to identify what is working best, anychanges which need to be made and to refresh the strategy as required.Tourism Development & Innovation – A Strategy For Investment 2016-20225

Section 2: Strategy Policy Context2.1 OverviewThe tourism sector’s best prospects for growth lie in generating increased levels of overseas revenue. Thefocus of the Government’s 2025 Tourism Policy is to increase the economic contribution of tourism to theIrish economy, by increasing the value of tourism service exports.The promotion of Ireland as a tourism destination in overseas markets has additional significance beyond itsdirect purpose of additional visitor numbers and revenue. The positive images of Ireland that are highlightedin tourism marketing, such as our high quality natural environment, and friendly and welcoming people,also supports the Government’s activities in other areas of economic development, such as the promotionof foreign direct investment into Ireland. The continued promotion of Ireland as a tourism destination inoverseas markets is also significant in terms of raising public awareness and perception of Ireland.To maintain and grow Ireland’s positive image and to achieve tourism policy objectives, Ireland must focuson ‘cutting through’ the ‘noise’ of other destinations in the global destination marketing arena. We mustprovide experiences that will appeal to potential visitors, satisfy consumer segment needs and force them toreappraise Ireland as a destination.In order to achieve the 2025 visitor revenue target, tourism plans will continue to be formulated strictlyon the basis of evidence of regions and consumer segments that have the strongest prospects for revenuegrowth in the medium to long term.In terms of the tourism offering, there are two key responses required:1. The first is to strengthen Brand Ireland by building propositions of scale capable of achieving internationalcut-through (i.e. standing out among the large supply of alternative tourist destinations that are availableinternationally) and securing consumer attention.2. The second is to re-position Ireland’s tourism asset base so that it directly mirrors the interests andrequirements of the consumers identified in the most promising market segments.Maintaining a clear focus on the interests of the international visitor and on strengthening the appeal ofIreland in international markets is the ultimate aim of this investment strategy. In order to achieve thealignment of tourism investment with the needs of the key consumer segments, this investment fund willfocus on projects that fit within the brand architecture and consumer segmentation framework.The domestic tourism market sustains a level of investment in tourism product that is of considerable benefitto Ireland’s attractiveness as a destination. This domestic demand also maintains sector revenue during nonpeak periods, however, the small size of the domestic market, and the high existing level of domestic tourismconsumption by Irish residents, limits the potential for further growth from domestic demand.2.2 Consumer SegmentationThe four big international markets for Ireland are the USA, Great Britain, France and Germany. Despite thegrowth in emerging markets these four are forecast to remain our strongest markets for some years to come.In a growing global hyper-competitive marketplace, where annually over 1 billion tourists travel internationally,it’s imperative that Ireland continues to offer stand out, world-class experiences for international visitors.Ireland must be promoted as a country which is a perfect fit, with something to appeal to all interests,encouraging visitors to not just contemplate coming to Ireland but to actually come.Rather than taking a broad stroke approach, Fáilte Ireland has adopted a more strategic focus by segmentingthe market and concentrating tourism development strategies on the best opportunities for visitor conversion,satisfaction and increased length of stay.Segmenting visitors is not new. Segmenting by demographics and geography provides a quick and easymethod of approaching the tourism industry; however it has its limitations and is only part of the puzzle.For example not all 25-34 year olds from Britain are looking for the same things from their holiday or shortbreak.Fáilte Ireland’s development strategies, plans and engagement with industry stakeholders (across its majorpropositions – Wild Atlantic Way, Ireland’s Ancient East and Dublin) is informed by a consumer segmentationmodel which is based on a typology of holiday motivations (sightseeing, relaxing and so forth) but is alsosupported with demographic and geographic descriptors.6Tourism Development & Innovation – A Strategy For Investment 2016-2022

Motivation plays a major role in determining tourist’s behaviour. It determines not only if the consumer willengage in a tourism activity or not, but also when, where and what type of tourism they will pursue.This segmentation model was developed based on a comprehensive review of Ireland’s core internationalmarkets Great Britain, USA, France and Germany. The identification of segments highlighted that there aremany common priorities across countries and that people are best differentiated by motivation rather thannationality (even so international travellers in each country have their own culture and some slight differentemphases are appropriate when communicating the offer).From the resulting global segmentation model, three segments in particular have been identified as Ireland’sbest prospects for growing tourism in its main overseas markets.The three priority segments are:u Social Energisers – seek vibrant city life in new and exciting destinations and are motivated by factorswhich Ireland, and Dublin in particular, is strong on. They are comparatively young visitors travelling ascouples or part of adult groups.uCulturally Curious – are out to broaden their minds, expand their experience by exploring new landscapes,history and culture and look to really understand the destinations that they visit. They are independentminded and like getting off the beaten track. These are comparatively older visitors, who typically travelas a couple or on their own.uGreat Escapers – They travel very much as a close-knit group and are on holiday to take time out, to getphysical with nature where they can escape their hectic lives and focus on each other. Consequently, theyare less interested in meeting others. These are comparatively younger visitors who are often coupleswith children.In accordance with best practice a review is currently underway to validate the segments, further ourunderstanding of the motivations and behaviours and to future proof the model to feed into Fáilte Ireland’sstrategies.Tourism Development & Innovation – A Strategy For Investment 2016-20227

2.3 Brand ArchitectureBrand IrelandThere is significant research which shows that certain experiences offer the greatest appeal to internationalholidaymakers. These are identified below as the five pillars of Tourism Brand Ireland, our unique internationaltourism identity.These pillars or experience components are identified as having the potential to set Ireland apart from itscompetitors.u Vibe of the City – fresh, exciting and stimulating experiences and attractions in a lively atmosphereuLiving Historical Stories – interesting and informative experiences and attractions in urban and rural areasuConnecting with the People of Ireland – immersing themselves in Irish cultureuAwakening the Senses – stimulating and profound experiences within natural and unspoiled landscapesuGetting Active in Nature – revitalising and energising experiences and activities in the spectacularoutdoorsFáilte Ireland has developed a number of core propositions capable of delivering on these experiential pillarsfor target consumer se

Tourism Development & Innovation – A Strategy For Investment 2016-2022 5. 1.4 Rationale for Investment. The rationale for investment and preparation of this strategy draws heavily on the Tourism Policy Statement ‘People, Place and Policy Growing Tourism to 2025’ which sets out clear and ambitious targe