FÁILTE Ireland’s most senior official has told the Oireachtas that visitors are turning to other countries because of the lack of accommodation here.
Paul Kelly was among a panel of representatives to address the Tourism, Culture, Arts, Sport and Media Committee.
Delegates from the Irish Hotels Federation and the Irish Tourism Industry Confederation also made submissions on the challenges facing the visitor sector in Ireland at the moment.
Paul Kelly said that as things stand, one in three guest beds outside of Dublin is contracted to the state for use as international protection accommodation.
In Donegal that figure stands at around 50 per-cent.
“What this means for activity providers, visitor attractions and many other businesses in impacted areas is that they will have their very survival put at significant risk,” said the Fáilte Ireland chief executive.
“We estimate that this will cost the non-accommodation tourism sector about €1.1 billion in lost revenue this year. This will be a real loss as we know from agents that many visitors who want to come to Ireland are now booking other countries simply because they cannot find accommodation in Ireland.”
Eoghan O’Mara Walsh, chief executive of the Irish Tourism Industry Confederation, said that in February the average daily hotel room price in Dublin was €150 with average prices outside Dublin at €143.
That is 26 per-cent higher than in the same month in 2019 with cost increases in energy, labour and insurance all adding to the strain.
Paul Kelly warned that price hikes as a result of the accommodation shortage are putting Ireland’s long term reputation at risk.
He revealed how he wrote to all accommodation providers in December asking them to bear that in mind when setting prices.
“Failte Ireland has no remit or role in price-setting regulation, these are commercial decisions by individual businesses based on the costs that need to be recovered and the balance between supply and demand.
“However the increased frequency and scale of price hikes within the sector is damaging the sector’s reputation both nationally and internationally.”
Another challenge facing rural tourism economy is the lack of availability of hire cars.
According to Fáilte Ireland 20 per-cent of all overseas tourists to Ireland rent a car.
These visitors stay longer and spend more, particularly in rural areas.
But like the bed shortage, the cost of a hire car is putting people off.
“The car rental fleet is likely to be well below the level required to meet demand again this summer,” Mr Kelly said.
“Independent analysis indicates that the discontinuation of the repayment of VAT on VRT scheme in 2019 resulted in increased costs for car rental providers and their customers, ranging from €50 to €250 per car, per week.
“This is acting as a significant commercial disincentive to restocking the seasonal fleet, it is leading to high peak season prices and of course a loss of potential visitors simply because some cannot secure a hire car.”
Paul Kelly added that the outlook in terms of demand for accommodation in Ireland was strong for the summer. But hotel and guest beds are “desperately needed”.
“We are optimistic that this season will be strong in terms of demand but I have to reiterate that the long term wellbeing of our tourism economy, and in particular rural communities that rely on it, desperately needs as much tourism accommodation stock as possible to return to tourism as quickly as possible and for the pre-2019 VAT on VRT scheme to be reinstated.”
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