Ireland’s tourism sector faces new pressures as rising costs and accommodation shortages affect visitor trends. Recent data from the Irish Tourism Industry Confederation (ITIC) reveals that while international visitors spent €2.14 billion in the third quarter, an increase of 10% over the previous year, the duration of stays dropped by 7%. This spending increase is likely a reflection of higher local costs rather than an uptick in visitor engagement.
In September 2023, the Irish government raised the VAT rate on tourism-related services from 9% to 13.5%, ending a temporary reduction initially introduced to support the industry during the COVID-19 pandemic. This change has affected the costs of accommodations, food, and activities, making travel in Ireland more expensive for visitors. Coupled with inflationary pressures on labor and energy, costs for accommodations have risen by over 33% since 2020.
Accommodation capacity has also been limited by the repurposing of hotels to house asylum seekers, which reduces the availability of tourist lodging options and puts upward pressure on prices. This limitation on hotel space impacts the attractiveness of Ireland as a destination for international tourists, especially those seeking affordable and accessible accommodations.
Tourism is a key economic driver for Ireland, supporting thousands of jobs and businesses, especially in regional areas. A continued downturn in visitor numbers and shorter stays could significantly affect the sector's long-term sustainability, potentially impacting local businesses that rely on tourism for year-round revenue. Eoghan O’Mara Walsh, CEO of ITIC, has called for more government support, emphasizing the importance of tourism in maintaining Ireland’s competitiveness in a global market.
In this context, future policies that mitigate rising operational costs and expand accommodation capacity are critical to safeguarding the tourism industry’s role in the Irish economy.
Nearly 2 million international visitors were in Ireland during the three months, up 1% on the same time last year.
North America was the most valuable market worth €843 million, with visitor numbers up 9%, and the length of overnight stays up 14%.
There was 1% rise in visitors from mainland Europe, but the average length of stay fell 15%.
Meanwhile, visitor numbers from Britain dropped 5%, with the length of stay down 12%.
RTE
