Mr. Paul Kelly:

I thank the committee very much for the invitation. When I appeared here in April and December last year, I expressed our view that housing displaced Ukrainian citizens and international protection applicants in tourist accommodation is not a good solution for them or for tourism, and I stressed the importance of finding as many better alternative solutions as possible as quickly as possible.

Thirty-two percent of all registered tourism bed stock outside Dublin is now contracted to the State and not available to tourists. This means that activity providers, visitor attractions and many other businesses in impacted areas will have their very survival put at significant risk. We estimate this will cost the non-accommodation tourism sector over €1 billion in lost revenue this year. This will be a real loss. As we know from inbound agents, many visitors who want to come to Ireland are now booking trips to other countries simply because they cannot find accommodation here.

In addition to the short-term business loss and the long-term consequences for the quality of some of our rural tourism destinations, this situation also creates conditions that facilitate pricing practices that put Ireland's long-term reputation at risk, particularly in Dublin, where there was already an underlying shortage of tourism accommodation. Fáilte Ireland has no role or remit 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 spikes in the accommodation sector is damaging its reputation nationally and internationally. To this end, I wrote to all registered accommodation providers in December 2022 and asked every business to consider Ireland's long-term value for money reputation when setting prices. I repeated this message at Fáilte Ireland's recent industry information events, which were attended by more than 2,000 industry members, and, by invitation, at the IHF conference earlier this month. Another challenge facing the rural tourism economy is the lack of hire car availability during the summer. Some 20% of all overseas tourists to Ireland rent a car, and these visitors stay longer and spend more, particularly in rural areas. The car rental fleet is again likely to be well below the level required to meet demand this summer. 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. This ranged from €50 to €250 per car, per week. This is acting as a significant commercial disincentive to restocking the seasonal fleet, and is leading to high peak season prices for those who cannot secure a car, and to a loss of potential visitors simply because some cannot secure a hire car. Finally, we are optimistic that this season will be strong in terms of demand. However, I reiterate that for the long-term wellbeing of our tourism economy, particularly the rural communities that rely on it, we need as much tourism accommodation stock as possible to return to tourism as quickly as possible. The pre-2019 VAT on VRT repayment scheme also needs to be reinstated.