More than two-thirds of tourism-related businesses in the State increased prices last year with many insisting rising operating costs had left them little option but to do so.
Data for 2024 from Fáilte Ireland, the tourism body, paint a mixed picture of an industry buoyed by rising revenues and a positive outlook but worn down by persistent concerns over the cost of doing business.
“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,” noted the agency’s 2024 tourism barometer, published on Wednesday.
Despite cost challenges, 56 per cent of tourism businesses made a profit and 24 per cent broke even.
However, while almost one-third of restaurants saw increased revenues, 59 per cent experienced a reduction, the highest proportion of any sector.
The majority of restaurants (86 per cent) increased their prices during the year and yet many could still not break even — 53 per cent recorded a loss.
Fáilte Ireland’s latest annual data, looking at reactions to visitor volumes, turnover and profitability was garnered from 920 tourism company survey responses.
Some 68 per cent of businesses said they increased prices during the year with rising operational costs the dominant motivation.
The sector demonstrated a wide variation with increases more common among hotels (87 per cent), inbound tour and destination operators (83 per cent) and the food and drink sector (83 per cent). Conversely, 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.
The year was marked by gains in accommodation availability, including from reduced Government contracts for asylum seekers and international protection applicants as well as a significant increase in the number of activities and attractions.
“The combination of those meant the capacity of the industry increased [but] the revenue and volume growth was spread across more businesses.”
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Costs continue to dominate concerns, notably for energy, cited by 57 per cent of respondents, and payroll, by 56 per cent.
Almost half (46 per cent) of businesses increased revenues, 18 per cent recorded the same level and 36 per cent saw a reduction.
Performance varied by sector. Tour and coach operators, as well as attractions, fared well although the food & drink sector struggled to improve on 2023 performance.
About half (51 per cent) of restaurants and cafes made a loss, compared to 16 per cent across other sectors.
Forty-eight per cent of pubs and bars made a profit with 33 per cent breaking even. The report noted that price increases helped maintain viability in the trade with 86 per cent of venues doing so.
Generally during the year, North America was behind positive overseas revenue performance. The majority (69 per cent) of inbound tour operators reported the market being up on 2023, unlike dipping revenue from British and mainland European visitors.
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