Panic within the Irish tourist sector is growing as the country’s tourism body, Fáilte Ireland, revealed that a huge percentage of businesses were hit with price hikes last year.
Over two-thirds of tourism-related businesses increased their prices in 2024, with many insisting rising operating costs left them with few alternatives.
Fáilte Ireland’s 2024 tourism barometer, published on Wednesday, said: “Some say they don’t want to keep putting up prices as it risks harming their own and Ireland’s affordability and competitiveness. Rising costs however leave them little choice.”
In the restaurant sector in particular, a huge 86% increased their prices during the year and yet still could not break even – with 53% recording a loss.
Overall, some 68% of businesses said they increased prices during the year, with rising operational costs the main motivation for doing so.
The 2024 data paints a mixed picture of the industry, with a positive outlook but one battered by persistent concerns about the cost of doing business.
Despite cost challenges, 56% of tourism businesses made a profit and 24% broke even.
However, while almost one-third of restaurants saw increased revenues, 59% experienced a reduction – the highest proportion of any sector.
Fáilte Ireland’s latest annual data, which examined reactions to visitor volumes, turnover and profitability, was collected from 920 tourism company survey responses.
In the report, price increases were most common among hotels (87%), inbound tour and destination operators (83%) and the food and drink industry (83%). Meanwhile, only about half of attractions, activity providers and self-catering operators increased their prices.
“At a national level the performance of the sector is overall very good – strong growth in revenue, good volume growth, but at an individual business level, on average, profit margins have been squeezed,” said Fáilte Ireland chief executive Paul Kelly, according to The Irish Times.
With gains in accommodation availability, including from reduced Government contracts for asylum seekers and international protection, as well as an increase in the number of attractions and activities, this has “meant the capacity of the industry increased [but] the revenue and volume growth was spread across more businesses,” according to Mr Kelly.
Costs continued to dominate concerns, notably for energy, cited by 57% of respondents, and payroll, by 56%.
Almost half (46%) of businesses increased revenues, 18% recorded the same level and 36% saw a reduction.
During 2024, there was a dip in revenue from British and mainland European visitors, with the positive overseas revenue performance coming from North America. The majority (69%) of inbound tour operators reported the market being up on 2023.
