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Costs and competitiveness a key focus for tourism industry

The tourism industry needs to focus on costs and competitiveness as the sector faces into choppier waters in the years ahead, according to the head of the national tourism development authority, Fáilte Ireland.

Paul Kelly said the industry had to avoid complacency against a backdrop of a softening in demand.

“We absolutely need to keep our focus on competitiveness. There are a lot of cost pressures there. The issue of insurance costs has been well publicised, but there are other inflationary pressures, like wages, that businesses are facing,” Mr Kelly said. 

“We do need to make sure that we’re absolutely not complacent. There is a softening in demand,” he added.

Mr Kelly described last year as ‘mixed’ from a tourism performance perspective.

Brexit uncertainty was a big factor, but there were issues around delays in aircraft being made available and a softening in the German market.

“This is very important from an overall economy point of view. Tourism is a labour intensive industry. A 1% decline in tourism can lead to a drop in 2,500 jobs. Small changes in revenue can make a big difference in absolute job numbers,” Mr Kelly explained.

He said the effect of job losses could be particularly acute in rural and regional areas where it would be hard to find alternative employment.

“Things are more challenging in rural Ireland. Dublin and the big cities have the corporate market with business travel helping to sustain them. Rural Ireland certainly relies more on the holiday maker.”

Paul Kelly said the clarity provided by the Brexit transition phase after the UK leaves the EU as scheduled next week was welcome.

However, he said there were still big questions about what happens after the transition phase ends in December.

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