Fáilte Ireland warns of possible downturn in tourism

Fáilte Ireland has warned of a possible downturn in tourism figures due to capacity issues, potential price “gouging” and a lack of regional balance.

Ireland received a record 7.9 million visitors in 2015, spending more than €4 billion. However, according to the State tourism authority, an 11 per cent growth in visitor numbers last year, while welcome, was “fuelled largely by factors external to the tourism industry”.

These included the low VAT rate on hospitality, zero-rated travel tax and the strength of the US dollar and the UK pound.

Weak euro

Fáilte Ireland chairman Michael Cawley said the weak euro in particular “masked an underlying cost creep” which he described as unacceptable.

Mr Cawley said surveys showed that value for money in Ireland was considered “good”, spurred on by visitors from the UK and the US who benefited from a strong exchange rate. But the results mask reports from euro zone visitors who say Ireland was “less competitive”.

Mr Cawley said while it would be “tempting to clap ourselves on the back and simply wait for a repeat performance next year”, the prospect of external shocks over which the industry has no control had been highlighted by dramatic falls in visitor numbers to Paris and Brussels following recent terrorism-related incidents.

Room shortage

Referring to the cost of hotel rooms and a shortage of capacity in Dublin, Mr Cawley warned “it would be a serious mistake to start gouging people”. He also expressed concern for the two-track improvement, with Dublin faring much better than the rest of the country.

A particular difficulty, he said, was brought about by tour operators who offered day trips from Dublin as far as the Ring of Kerry, starting early in the morning and returning late at night.

Fáilte Ireland said it would spend €55 million this year in support of the tourism industry, which is expected to grow by about 6 per cent. Of this, €19 million will be spent promoting attractions along the Wild Atlantic Way.

Fáilte Ireland also committed €18 million to developing the Ireland’s Ancient East brand over the coming year, including capital investment in visitor experiences.

Some €13 million is to be invested in Dublin to help promote the city internationally, and €5 million in attracting a targeted €140 million in conference business in 2016.