Fuel prices continue to impact domestic tourism

fuel pump, fuel

The crippling amount of tax attached to motor fuel prices is having a profound impact on domestic tourism, claim AA Hospitality Services.

AA Hospitality Services, who tour the country inspecting and grading Hotels, Gueshouses and B&Bs, recently quizzed thousands of motorists on how pump prices are likely affect their leisure travel in the year ahead.

While their research specifically references fluctuating fuel prices rather than direct taxation, the results would seem to confirm that high petrol and diesel costs are dampening our local tourism market.

Seemingly highlighting this point, 26% of survey respondents indicated that they are planning on taking more short weekend breaks in Ireland this year compared to last, thanks to lower fuel prices.  16% also said they hope to afford more visits to see friends and family living in other counties.

“We have said before that the super-high fuel taxes** imposed during the financial crisis are still there and they have the effect of draining disposable income away from virtually every family in the country.” Says Director of Consumer Affairs Conor Faughnan. “It is an anti-stimulus measure that is holding back local businesses across the land. We deal directly with Hotels and B&Bs through the AA’s hospitality grading service and we know first-hand that the tourism industry is also taking an unnecessary hit because of it.”

While on the increase, fuel prices are still significantly lower than they were this time last year.

According to the AA’s monthly fuel price index the national average of petrol and diesel respectively for the month of April 2015 are €1.39 and €1.31 per litre compared to €1.57 and €1.48 during the same period last year.

Taking the example of the Wild Atlantic Way, the AA share that it would cost a motorist approximately €70 less to complete it now, than during the equivalent month last year.   This is based on an estimated fuel consumption rate of 30 miles per gallon/9.42 litres per 100km.*

11% of those polled by the AA also stated that they are more likely to get away on a domestic driving holiday this year provided that prices don’t escalate to the same levels as last summer.

In July 2014 prices peaked to an average of €1.57 per litre of petrol and €147.6 for diesel.

“Disappointedly fuel prices are on the rise again, a trend we’re likely to see continue as we edge into summer.”  Says Conor Faughnan, Director of Consumer Affairs, AA Ireland.  “When this happens unsurprisingly it tends to have a detrimental effect on local tourism.  While factors such as exchange rates and crude oil prices make for volatile prices, it’s our domestic taxation policy that takes the biggest bite of the cherry.  In the context of Irish tourism and hospitality it feels a little like the Government is robbing Peter to pay Paul.”

AA Hospitality Services, who tour the country inspecting and grading Hotels, Gueshouses and B&Bs do however point out that several participants indicated that room rates rather than fuel costs are the biggest barrier to their enjoying more home grown hospitality.

According to the booking.com Hotel Price Index, which analyses the bookings made through their website, the average hotel room rate was €103 in 2014 representing a 10% year on year increase.[1]

 

Ends

Notes to the Editor;

While fuel prices are starting to creep back up again they are still considerably lower than last July. As a result of these lower prices to what extent do you agree or disagree with the following statements?

(Based on 8,015 responses gathered via online poll during March 2015)

  Agree completely Agree somewhat Neutral Disagree somewhat Disagree completely Doesn’t apply to me
I will probably do more driving this year than last. 6% 14% 38% 20% 18% 3%
I am planning to drive to work more frequently this year than last. 3% 4% 30% 14% 24% 25%
I will visit family living in other counties more often this year than last. 4% 12% 31% 15% 22% 16%
I am planning to take more short weekend breaks in Ireland this year than last. 5% 21% 30% 15% 22% 7%
I am planning to do a domestic driving holiday during the summer due to the lower fuel prices 3% 8% 26% 15% 36% 12%

 

**There have been five separate tax increases on both main fuels since the emergency budget of October 2008. Between them they have added approximately 23 cent per litre to the retail price. If you do 12,000 miles (19,200 kms) per annum at a fuel economy of 30 mpg you will therefore use 180 litres of fuel in a month. The extra tax added since 2008 therefore costs the typical motorist over €41 per month.

 

[1] Information sourced from www.irishtimes.com/news/consumer/hotel-rooms-up-10-last-year-to-103-average-says-survey-1.2123508