Celebrating his long-shot victory at Galway Races, local lawyer Joseph O’Hara headed to the champagne tent to spend some of his 1,000-euro ($1,300) winnings.
The seven-day festival is the biggest of its kind in Ireland and has served as a barometer for the economy. During the Celtic Tiger boom, it buzzed with helicopters, alerting punters to the arrival of the nation’s richest builders and bankers. Then came the collapse of the real estate market and an international bailout, and attendances and betting fell away.
With investors back buying Irish securities, now the punters are returning, albeit cautiously. The crowd of about 140,000 last week was 9 percent larger than in 2013, thronging the course and its Laurent Perrier champagne and Guinness tent, serving stout, oysters and smoked salmon.
“The general feeling is that the worst is over,” said O’Hara, 53, after backing a horse called Legatissimo that gave him odds of 20 to one. “We’ve endured six years of austerity and it’s been pretty miserable.”
Employment is rising, home prices in Dublin are surging and the country is back in international credit markets at record low yields four years after bond investors turned their backs on Ireland. Consumer spending, which amounts to about half of gross domestic product, will rise this year for the first time in four years, the country’s central bank forecast last week.
“There have been clear signs of stronger personal expenditure,” said Alan McQuaid, an economist at Merrion Stockbrokers in Dublin. “Although there is still a general air of caution among consumers, there seems to be a view that the worst is over following the downturn.”
The yield on benchmark 10-year bonds was 2.20 percent today compared with a peak of 14.2 percent in July 2011.
While about 217,000 people showed up at the Galway festival at Ballybrit at the height of the Irish boom in 2006, renewed confidence is rippling through.
“Racing has always been a great barometer for the economy,” course manager John Moloney said in an interview close to the track on the second day of the festival. “There was a terrific crowd here last night. The betting was good. There must be more money around.”
Unemployment fell in July to the lowest since April 2009, the statistics office said. Retail sales rose 4.8 percent in June from a year earlier, driven by rising car purchases.
Last week, Bank of Ireland Plc said it posted its first profit since 2011 in the first half, with Chief Executive Officer Richie Boucher telling national broadcaster RTE that the lender is starting to see a recovery in the domestic economy.
The week at Galway generated bets of 13.5 million euros for bookmakers and gambling pools known as totes, according to figures from the race organizer.
U.K. bookmaker Ladbrokes Plc took in 1.5 million euros, said Justin Carthy, head of racecourse management at the company. That’s about the same as last year and down from the peak, though is double what was staked just after the crash.
“When things are going well in Ireland, you can see it on the racecourse,” said Carthy. “Last year the turnover came back slightly. It’s still a long, long way behind where we were at the crazy times.”
Those times are a memory at the 195-room Clayton, the hotel closest to the race course. It has 16 executive suites.
In 2011, manager Rory Fitzpatrick canceled the champagne and oyster bars after “a total disaster” in 2010, the year Ireland was forced to seek a 67.5 billion-euro bailout from its European partners and the International Monetary Fund. Disposable income fell 4.8 percent in the first quarter from the fourth quarter, according to the statistics office.
Things are picking up, he said. “The real difference in the last couple of years is not that you’re seeing a huge increase in the amount of people traveling to Galway for the races, but they’re willing to pay for the extras,” he said. “In 2011, there was never any hope of people paying extra paying for the suites. Now they are again.”
Pat Golden, a 56-year-old part-time bookmaker from Dublin who has attended the Galway festival since he was 12, said he hadn’t seen much of an increase in business this year.
While the attendance was strong, race-goers weren’t gambling enough, he said. By Tuesday evening, he had only received one 100-euro bet. During the good years, customers would wager 300 euros or 400 euros, he said.
“People are still afraid to spend whatever they have,” said Golden, 56, as he stood on a wooden box taking bets on the first race. “It’s mostly all small money that’s around now.’
Even the winners aren’t getting carried away. Punter O’Hara, who placed his bets through a tote, urged caution as he left the champagne tent.
‘‘The recovery as I see it is fragile,” he said. “We can’t lose the run of ourselves the way we did in the past. Just mind the recovery.”