Catherine Martin (Dublin Rathdown, Green Party) | Oireachtas source

I propose to take Questions Nos. 3 and 4 together.

While the recovery momentum in our tourism sector continues, inflation, other economic factors and the significant cost pressures on tourism businesses are likely to impede the recovery. In terms of international perception, there is a risk of damage to Ireland's tourism offering and the promotion of Ireland as a good value destination through negative customer experience arising from the issues and challenges within the sector post­Covid. Many of these issues and challenges, such as reduced services and higher prices as a result of inflation, energy costs, labour shortages, recruitment challenges and supply chain issues, occur in other countries around the world. We see them manifested in Ireland in a lack of affordable accommodation and car rental options in certain areas, and in delays at Dublin Airport.

While I have no regulatory function with regard to the operation of our airports or the car rental sector, I am very aware of the potential impact of negative stories on customer sentiment. In this regard, Tourism Ireland is monitoring sentiment in our source markets in terms of reputational impact as a result of pricing concerns based on consumer, media, industry, and trade feedback and is issuing a weekly report on this matter to my Department. As we enter the peak summer months and the tourism industry recovers, there is inevitably additional pressure on hotel capacity and pricing. Hotel supply in Dublin has been affected by a range of factors, some of which are short term. These include deferred business from the past two years and increased demand. Businesses are facing significant cost pressures due to inflation and other economic factors, all of which have contributed to higher prices than in 2019.

It is important that Ireland maintains its reputation as a value for money destination. Value is not just about the price the customer pays; it is also about what the customer gets for that price so that visitors are attracted back again and continue to recommend Ireland to family and friends. We cannot assume that 2022 will be a baseline for linear growth in future years because it is an exceptional year as we emerge from the Covid years of 2020 and 2021. Next year will present its own challenges as the pent-up and deferred demand that we are seeing at the moment might be dissipated. The distorting effect of the pandemic makes it difficult to definitively assess the long-term supply and demand situation but there does seem to be a clear need for more short-term accommodation supply, specifically in Dublin.

We all want to see the return of a sustainable and vibrant tourism sector and I must stress how important it is that businesses maintain a long-term perspective on competitiveness and value for money. The céad míle fáilte reputation that the sector has built up over the years is an important element of our tourism offering and must be protected.

With regard to assisting inward tourism, Tourism Ireland, as part of its marketing strategy, established a recovery framework which will be underpinned by an extensive programme of promotional activity throughout 2022. The organisation has a flexible, three-phase plan to restart, rebuild and ultimately redesign demand. Over €80 million will be invested in the programme in 2022, which will allow Tourism Ireland to ramp up its campaigns in key international markets.

My officials continue to engage with many stakeholders, including the Department of Enterprise, Trade and Employment, the Irish Tourist Industry Confederation and the Irish Hotels Federation, in order to further understand the underlying issues impacting the recovery of the tourism sector and to emphasise the importance of maintaining a strong value proposition at the core of tourism. Department officials are also working with the tourism agencies to identify potential remedial actions such as the reweighting of marketing campaigns to ensure promotional activity is aligned with supply across the year. Tourism Ireland's promotional activity right now is focused on driving demand for later in 2022. The Tánaiste and I co-chair the tourism and hospitality forum, which is due to meet next week. This will offer another opportunity to discuss and address the many issues facing both sectors.

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