BY JOHN ELLIS, FINANCIAL ADVISOR
The tourism sector is Ireland’s largest indigenous industry and biggest regional employer with up to 254,000 people working in hospitality businesses. Its estimated that €5.3 billion,, excluding fares was spent by international visitors to the country last year with North America the biggest ‘single source’ market.
The industry has demonstrated a remarkable resilience despite “domestic capacity challenges and international geopolitical upheaval”. The Central Statistics Office (CSO)ntravel report states “that most of the overseas trips taken by Irish residents are to the UK, EU and Europe, with a steady increase in the number of trips to Canada and the US”.
We, as a nation, took 14.3 million domestic overnight trips in 2023 which amounted to €3.1 billion in expenditure and we took 12.6 million outbound overnight trips 2023 where total expenditure amounted to €12.9 billion. These trips accounted for almost 80 million bed nights. Of these 2.9 million outbound overnight trips, more than one-third (38%) were to a UK (including Northern Ireland) destination. And, in the last three months of 2023, Kilkenny ranged high among the most popular destination for domestic overnight trips in the southern region.
All these figures show a positive view of the industry. Yet, according to the ITIC 2023 report: “Last year will be remembered as one where businesses struggled with rising input costs, labour challenges, and an increase in VAT. While many businesses may have enjoyed a good trading year, the performance of tourism has been uneven across the country, with shifts in the volume, value, and profile of visitors across markets.”
Irish tourism still faces a number of challenges in 2024, which represent a serious risk to our competitiveness. The Government’s heavy reliance on tourism properties to house refugees and International Protection Applicants is causing a severe strain on accommodation capacity. This approach, while addressing immediate humanitarian needs, is inadvertently squeezing the availability of tourist accommodations.
The introduction of Short-Term Tourism Letting Legislation is expected to further shrink the supply, making it even harder for travellers to find places to stay. This dual pressure could lead to a dramatic decline in tourist numbers, as potential visitors opt for destinations with more reliable lodging options.
Maintaining the 31 million passenger cap at Dublin Airport is another shortcoming that could have far-reaching consequences. This cap does not just affect short-term visitor traffic, but stifles long-term growth prospects. By limiting the number of passengers, Ireland is effectively closing the door on expanding its visitor base and developing new international connections. This self-imposed limitation hampers the tourism industry’s ability to diversify its source markets and attract a broader range of visitors, crucial for sustained growth and resilience.
Ireland is already one of the most expensive countries in which to do business, and rising input and labour costs are only making things worse. The burden of increased regulatory compliance costs is further straining businesses, threatening to erode Ireland’s competitive edge.
One of the most critical issues is the ongoing struggle to recruit, train, and retain staff within the sector. The tight labour market means that businesses are constantly battling to fill positions, often leading to service shortfalls that directly impact the visitor experience. Without a robust workforce, the sector cannot sustain the exacting standards that visitors expect, further diminishing Ireland’s appeal as a top-tier destination.
At a time when consumers are more price-sensitive than ever, the country risks losing out to more affordable destinations. If costs continue to rise unchecked, we could see a significant downturn in tourism revenue.
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