Rising Costs Amongst Threats to Ireland’s Tourism Growth
The Irish Tourism Industry Confederation (ITIC) is calling on the Irish Government to better support Ireland’s tourism industry in the light of cost of business challenges and capacity constraints.
The ITIC is the umbrella group representing the leading tourism interests in Ireland. Its members come from key tourism stakeholders across the public and private sector and include Aer Lingus, Irish Ferries, DAA, Shannon Group and Irish Hotels Federation.
The Organization has issued its 2023 Review and 2024 Outlook which shows that €5.3 billion will have been spent by international visitors while visiting Ireland in 2023 making it the country’s largest indigenous industry.
Tourism is a critical component of Ireland’s export economy.
- Tourism consumption amounted to €10 billion in 2019 – 73% from inbound tourists and 27% from domestic trips.
- Tourism accounted for 4.4% share of Gross Value Added (GVA) in the Irish economy.
- 284,800 directly employed in almost 46,000 tourism-related enterprises, based on full time job equivalents – 13% share of total employment across the economy.
However, the Review has highlighted tourism accommodation constraints as slowing growth with 20% of hotel and guesthouse beds contracted to Government for refugees and asylum seekers and new short-term rental legislation likely to impact on self-catering properties. The tourism body has also said that Dublin Airport needs to be allowed grow beyond its current passenger cap.
The ITIC CEO also highlighted rising costs as a major concern for those in the industry. Eoghan O’Mara Walsh said that businesses are concerned with rising costs as a result of Government legislation and that, ‘The labour costs alone being imposed on businesses across the economy amount to about €4 billion annually – this poses a significant burden for SMEs with tight profit margins and some of these costs should be offset by Government or else Irish competitiveness will be further eroded.’
ITIC pointed to the conflict in the Middle East and the war in Ukraine as events that could impact on consumer confidence. Elaina Fitzgerald Kane, Chair of ITIC said, ‘Government cannot influence international events but the challenges affecting the industry domestically do lie in their gift. Action is needed on ameliorating cost challenges, addressing capacity concerns and improving competitiveness and this will all help Ireland’s tourism and hospitality industry to continue on its path to full recovery.’