Fáilte Ireland chief warns against 'gouging' tourists with price hikes
The chairman of Fáilte Ireland has warned that the "underlying cost" of holidaying in Ireland is increasing at an "unacceptable level".
Speaking at the launch of the agency's annual review yesterday, Michael Cawley said that the weak euro is masking rising costs in the tourism sector. He said the cost of going on holidays in Ireland is "on a trend on which we would not want to continue".
The value of the euro fell consistently during 2015 compared to the dollar and sterling, making Ireland cheaper for tourists from the UK and US.
Fáilte Ireland's 'Value for Money' rating, which polls several thousand tourists on how they viewed overall costs during their stay in the country, shows just 8pc of overseas visitors rated Ireland as 'Poor'. This was down from 17pc in 2012 and 37pc in 2011.
Meanwhile, 58pc said Ireland was good value for money, while 34pc rated the country as 'Fair'. However, although the percentage of visitors from Britain and the US giving 'Good' ratings has risen steadily since 2010, the statistics show that tourists from countries such as France or Germany were less likely to rate Ireland as good value for money in 2015 compared to 2014.
"The ratings from the strong currency source markets are saying we're getting better, in reality their currency is just stronger against the euro," Mr Cawley said.
"The euro-based people are saying we're getting more expensive, and that's the danger. Our underlying cost creep here is at an unacceptable level.
"Our customers are telling us that they perceive us to be less competitive than before where they are spending the same currency and we can't depend on strong currencies to bail us out if we are becoming uncompetitive locally, and that seems to be what's happening here."
When asked for examples of what may be driving the "cost creep", Mr Cawley said: "We had examples during the downturn of particularly restaurants being extremely competitive.
"I think it would be a grievous mistake to start gouging people. I'm not suggesting they are but in certain periods of the year it may be a temptation and we need to be careful."
Mr Cawley was speaking at Fáilte Ireland's annual 'Tourism Industry Review'. The State agency, which is focused on supporting the domestic tourism industry, predicted that Irish tourism will grow by 6pc during 2016. It also announced that it will spend €55m in the coming year on developing and promoting its tourism brands such as the Wild Atlantic Way.
Total tourism revenue for 2015 is expected to amount to €7.3bn, an 11pc rise on 2014. Fáilte Ireland estimates that €1.8bn of it will directly benefit the Exchequer through taxation.
The organisation estimated that Dublin needs an additional 5,000 hotel rooms to cope with future demand, but said based on current planning levels this may not be a reality until 2020.
According to hotel search site trivago, prices for the average hotel room in Dublin are at their lowest for 11 months.
The average cost of a room in the capital is currently €112, down by 15pc compared to December.