UK Tourists, the Great Recession and Irish Tourism Policy

Inbound tourism to Ireland fell sharply in 2009 and 2010. Visits to Ireland from the UK, the dominant country of origin of visitors to Ireland, did not fall faster than UK visits elsewhere. We use a pooled travel cost model for UK travellers to estimate price elasticities of tourism demand for various market segments. The proposed reduction in the travel tax, and the reduction in the VAT rate for "tourism goods and services" would lead to a modest increase in visitor numbers and expenditure. However, the increase in expenditure is small compared to the forgone tax revenue.