With prices rising, there is understandably a significant focus on Irish tourism’s competitiveness and value for money. This bulletin by the Irish Tourism Industry Confederation (ITIC) looks at the sector’s international context, the unique cost pressure points on Irish businesses, the importance of retaining our value proposition, and outlines 9 key policy areas that Government can assist industry in maintaining competitiveness.
Blinking – bruised and battered – from the pandemic, the 20,000 businesses that make up Ireland’s tourism industry had been kept alive thanks to Government financial assistance and demand from the domestic market. Covid-19 had cost Irish tourism in excess of €12 billion over a 2-year period as international visitors, the mainstay of the industry, were prevented from coming to our shores.
Since March though, when restrictions were finally lifted, business has bounced back at a much quicker pace than had been expected. Pent-up demand, deferred bookings, and accumulated savings have all meant that travel and tourism around the world has surged.
However, recovery has not been without its challenges, while the current geopolitical and economic outlook suggests that the rate of recovery may not be sustainable. Recent increases in global energy, food and transport costs, together with a tight labour market and supply chain disruptions, threaten Irish tourism’s fragile recovery.
The sector is now facing a challenging trading environment against the background of the ongoing war in Ukraine, a softening of consumer sentiment due to rising inflation and interest rates, and increasing costs of doing business in Ireland at a time of economic uncertainty.
In recent weeks the increasing price of scarce hotel rooms and rental cars has attracted much media interest, at home and abroad, with some examples of excessive price hikes undoubtedly denting Ireland’s reputation.
Competitiveness is critical to the recovery of Ireland’s tourism industry. A sector which pre-pandemic generated close to €10 billion revenue, supported 260,000 jobs in over 20,000 businesses, mostly SMEs, and sustaining regional economies and rural communities across the country.