Ireland has been revealed as the slowest country in Europe to bounce back from the pandemic, with visitor numbers still about 42 percent lower.
Back in 2019, the Emerald Isle played host to a whopping 10.9 million international tourists, but fast forward to 2023 and that number’s plummeted to just 6.3 million, says the World Tourism Organisation (UNWTO).
And it doesn’t get much better; the first half of 2024 only saw a measly four percent uptick in tourism compared to last year. The top five laggards in post-pandemic tourism recovery are led by Ireland with a percentage drop of -42.47, followed closely by Peru (-42.25), the Philippines (-39.44), Angola (-38.53) and Pakistan (-38.15).
South Korea, Iran, Israel, and Madagascar also feature in the sluggish top 20. A spokesperson for Tourism Ireland spoke to the Telegraph about the challenges Ireland faces: “Challenges include the cost of living crisis, which affects many of our overseas markets, capacity issues, along with competition from other destinations,” reports the Express.
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Yet, Tourism Ireland is throwing a pinch of salt on these figures, suggesting they might not be the full picture due to a new Central Statistics Office (CSO) methodology for calculating tourist numbers. Failte Ireland’s summer 2024 Tourism Barometer isn’t painting a rosy picture either, revealing that tourist traffic is down across all Irish markets and regions.
One element is being pinpointed as the key deterrent for international tourists when considering Ireland for their holiday destination – the hefty price tag. Known for its steep expenses, Ireland’s ongoing cost of living crisis is hitting both tourists and local businesses hard, with the latter grappling with escalating operational costs.
“Ireland is never going to be the cheapest destination,” observes Eoghan O’Mara Walsh, the Chief of the Irish Tourism Industry Confederation. “And the rising costs mean we’re now becoming an expensive destination in which to do business.”
O’Mara Walsh highlights the universal cry across the hospitality sector: “The big problem you hear from every hotel, restaurant or tourist attraction is the cost.”
He elaborates on the tough spot these establishments find themselves in: “The costs of running a tourism and hospitality business are really high. So the business has two choices. One, they pass on all those extra costs to the consumer, but obviously that risks damaging demand. Or two, they absorb it to the bottom line, and that obviously risks the viability of the business.”
Further complicating matters is the increase in the VAT rate, a decision that hits the tourism and hospitality industry particularly hard. In 2023, there was a rise in the VAT rate for certain goods and services from nine percent back up to 13.5 percent, overturning a measure introduced in 2020 as a lifeline for businesses amid the pandemic.
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This hike has sparked consternation within the sector, especially among those running restaurants, pubs, and hotels, who are already facing a struggle to stay afloat.
“I think Ireland has become a more expensive country to visit over the last few years, like a lot of others,” Johnny Duggan, owner of Taylor’s Bar and Thai Garden Galway, told The Telegraph. He pointed out that VAT rates in Ireland are among the highest sales taxes in Europe.
“Moreover, we have one of the highest excise rates in Europe on alcohol, which means that the cost of a pint or a glass of wine is often up to four times more expensive than in places like Spain.”
The cost of accommodation was also a significant issue, especially when international music stars such as Taylor Swift, Coldplay, and the upcoming Oasis concerts were in town. As elsewhere, hotel prices in Dublin soared, further tarnishing the reputation of the already costly city.
There is also a shortage of hotel rooms: “Capacity in our accommodation sector is an issue during peak and shoulder seasons due to some hotels having taken on year-round contracts to accommodate people fleeing war or seeking asylum,” Duggan explained. “There has been a massive displacement of people into Europe from various other areas over the past few years, leading to a reduction in accommodation capacity in some areas and regions.”
In March 2023, 34 percent of the registered tourism bed stock was being used as emergency accommodation for refugees and asylum seekers. Although the figure has now dropped to 10 percent, there continue to be ripple effects, with related businesses like tourist attractions and cafes shutting down.
Nevertheless, the latest report from Failte Ireland signals a bright spot as 43 percent of inbound tour operators report an uptick in visitors, with the crucial US market showing robust interest.
Tourism Ireland has likewise issued an upbeat forecast for the year ahead with an emphasis on earnings over headcount: “When comparing Jan to Aug for 2024 versus 2023, we see spending up by 17 percent, trips up by 11 percent and nights slightly down by two percent. This is a positive indication of how the year will turn out.”
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