The Irish Times view on domestic tourism: priced out

If the sector engages in price gouging this summer, it will pay a heavy price for years to come

At the start of this year every link in the Irish tourism chain was consumed by Covid-19 as the industry wondered if and when it would be able to fully re-open and what appetite the public – scarred by two dark and frightening years – would have for leisure travel in 2022 and beyond.

The answer came surprisingly quickly and was almost as surprisingly positive, with travel, both on the domestic and international fronts, bouncing back faster than even the most optimistic predictions suggested. However, now it is another c-word which dominates the conversation with costs presenting the biggest challenge for the Irish hospitality sector and those who would like to avail of its services.

According to the Central Statistics Office, hotel and restaurant prices here have climbed by 5 per cent since last March but other metrics suggest the increases have been far more substantial. Global hospitality analysts STR released pricing data earlier this month which indicated that the average daily rates for hotels across Europe were 6 per cent higher in May when compared with 2019. It lauded Ireland as the poster child for the tourism recovery with rates here said to be 21 per cent higher than three years ago.

This substantial spike in hotel room prices might be good news for the industry but will be considerably less welcome for the paying public, whose concerns will be ignored at the sector’s peril. Irish tourism has a delicate balance to strike – it must make a sufficient profit margin in the face of rising prices across the board while still offering value. While seeking to maximise profits might be tempting and even understandable as the industry seeks to recoup some of the massive losses racked up during the pandemic, it would be better advised to play a longer game.

People have long memories, and if tourism here engages in price gouging this summer, it will pay a heavy price for years to come. A reputation as a great, if premium, place to holiday is hard won over many years but it is one which can be easily and quickly destroyed.