Ms Orlaith Gleeson:

I welcome the opportunity to discuss this important issue with the committee. Tourism is a key part of the economic activity of Ireland. It is important in particular because of its reach across the country and into all regions. As the sector rebuilds, it is hoped that tourism in 2022 will reach around two thirds of the activity level of 2019.

As members of the committee will be aware, significant funding supports were put in place throughout the Covid-19 pandemic to keep the tourism sector alive and to support this initial rebuild phase in 2022. However, this initial recovery stage has been unpredictable and is not without its challenges. The final loosening of restrictions occurred in Ireland only from the end of January of this year, and the speed and pace of the return of tourism has brought issues for all tourism businesses.

There has been an increasing number of anecdotal reports of excessively high pricing in the hotel sector. Whether that is reflective of the general market or of the prices being sought online for last remaining rooms does not negate the possibility that this could have a negative impact on our reputation as a visitor destination. It is important that Ireland maintains its reputation as a value-for-money destination. Value is not just about the price one pays; it is also about what one gets for that price. Irish businesses have proven before that visitors are attracted back again and recommend Ireland to family and friends. Businesses across the whole tourism ecosystem should consider the medium and long term in making their decisions on value for money.

I would also caution that the strong regrowth this year in Irish tourism should not be assumed to be a baseline for future years, given the high level of pent-up demand and rollover business from 2020 and 2021. We cannot assume linear growth in future years and we should be prepared for challenging trading conditions in 2023. If recent years have taught us anything, it is to expect the unexpected.

In common with the wider economy, there have been sizeable increases in the costs of key inputs such as energy and insurance and difficulty in recruiting and retaining key skills. These challenges are not unique to Ireland; they are shared by many countries and contribute towards higher costs for businesses. It is important that any discussion recognise that changing landscape for businesses in respect of cost challenges. I know that the committee has already discussed the skills challenges facing the tourism industry and will be aware of the steps being taken by our colleagues in Fáilte Ireland to address the issue.

It is also clear that there have been changes in the available supply of accommodation in hotels due to a range of factors including availability of staff and the humanitarian need to accommodate people fleeing war in Ukraine.

The Department has engaged with Fáilte Ireland, Tourism Ireland, ITIC and the Irish Hotels Federation in order to further understand underlying issues surrounding the recovery of the tourism sector. We are working with the tourism agencies to identify potential actions such as the re-weighting of marketing campaigns to ensure that promotional activity is aligned with supply across the year.

When we look at the wider economy and the particular set of challenges facing the tourism industry, it is clear that a collective and concerted multi-stakeholder approach to tackling those challenges is required. We all want to see the return of a sustainable and vibrant tourism sector. The Department will continue to work towards that goal.