Eoghan O'Mara Walsh: Tourism recovery remains sluggish at best

The crucial third quarter of the year brought in 3.6m international visitors and, when combined with Q2, would point to six million international visitors for the full year. 

That might sound like a big number until you compare it to the last full year pre-pandemic when overseas tourists to Ireland amounted to over 10m.

The CSO is keen to stress that its data-collection methodology has changed in the interim so direct comparisons are complicated but nonetheless it is apparent that the full recovery for the sector is some way off.

Airports may be busy, but numbers are inflated by Irish people travelling abroad and hotel occupancy levels are inflated by government contracts for humanitarian purposes. 

The actual number of tourists in the country is well shy of where it was and where it needs to be

Although the North American market is performing well, other international markets are weaker, and with so many Irish travelling abroad it is clear domestic tourism numbers this year will be soft.

Allied to sluggish demand, tourism and hospitality enterprises are dealing with significant cost of business pressures. 

Crowe, a leading business advisory firm, conducted analysis earlier this year which shows that impending legislative changes —including minimum wage increases, enhanced statutory sick pay, and pension auto-enrolment — will add approximately 25% to the payroll cost of tourism and hospitality businesses over the next three years.

With most businesses in the sector being SMEs, with modest profit margins, such payroll increases will have to be passed onto the consumer thereby further eroding Ireland’s competitiveness.

No serious business owner has any issue paying staff more, particularly in a cost-of-living crisis, but it highlights a real failure by government to support businesses in last month’s budget.

The Irish Tourism Industry Confederation, and other business representative groups, had urged government to introduce an employer PRSI offset measure to mitigate pressure on margins for labour-intensive enterprises, but no such announcement has been forthcoming.

In the medium-term the industry is ambitious. It recently produced a roadmap for the sector out to 2030 that points to the potential of a 50% rise in revenue which will benefit business, regional Ireland, and the exchequer. And growth can be managed in a responsible way.

The sustainability debate, particularly in the context of air travel, is a regular topic for discussion on airwaves.

There was a positive intervention recently from the Taoiseach who said Dublin Airport must be allowed grow beyond its current planning cap of 32m passengers. 

It seems nonsensical that the key gateway to Ireland has a cap which self-evidently hamstrings exports, FDI, as well as tourism numbers.

The counter argument has raged, across media and the Dáil floor, about aviation and emissions. It is an interesting debate but not binary. 

According to the International Energy Agency, aviation accounts for 2% of carbon globally, certainly material but clearly not the bogeyman some commentators try to portray it as.

Flights also of course are inter-jurisdictional so all emissions can’t all be lumped on Ireland. 

Crucially though as an island nation we need connectivity otherwise our economy will shrink. Therefore, the key question is how aviation can become less carbon heavy.

The broad aviation sector has committed to being carbon neutral by 2050 and all should be done to support this.

• Eoghan O’Mara Walsh is CEO of the Irish Tourism Industry Confederation