While Ireland has never been a cheap place to holiday — at least not when compared with the beaches of southern Europe — it is likely to be a whole lot dearer this summer with everything from hotels and restaurants to food, fuel and wages driving up prices once again for those who staycation.
It is hard not to have sympathy for the hospitality sector which was hit so hard by Covid-19, effectively cut off from big-spending overseas visitors and forced to deal with closures and restrictions that would have been unimaginable in pre-pandemic times.
But sympathy only extends so far, and anyone looking to book a holiday at home between now and the end of August might find themselves asking who, ultimately, is paying the price for the resurrection of Irish tourism.
According to recent figures from the Central Statistics Office, hotel and restaurant prices have climbed by 5 per cent over the last 12 months. But other metrics suggest the increases have been far more drastic.
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Global hospitality analysts STR released pricing data earlier this month which indicated that the average daily rates (ADR) in hotels across Europe were 6 per cent higher in May than in the same month in 2019. Ireland was held up as the poster child of the recovery, with rates said to be 21 per cent higher than three years ago.
But it is not just hotels where prices have been climbing. Alternative accommodation in some of the most popular holiday destinations in Ireland also come with eye-watering prices.
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Last Wednesday, only a handful of the 102 Kerry listings on Airbnb catering for a family of two adults and two children over a fortnight in July cost less than €2,000, with 59 of the properties coming in at more than €3,000.
Moving up the Wild Atlantic Way to Galway the picture was gloomier still, with the same platform listing just 59 properties in the entire county. Well over half were priced at more than €3,000 for two July weeks.
And that only covers accommodation.
People have to get to their destination, eat when they are there and perhaps cover the cost of a couple of activities to keep themselves amused, with each link in the holiday chain now costing more than in times past.
Even the journey will cost more.
A person travelling from Dublin to Dingle by car will embark on a round-trip journey of 700km using roughly one tank of fuel. If they use their car while away from home to go for the “drive” so beloved of Irish families on holidays in Ireland, they might rack up another 300km.
In June 2020, a litre of petrol or diesel cost about €1.20, so for a car that did 16km to a litre of fuel, the cost of 1,000km of holiday travel was €75. Today — as motorists are painfully aware — a litre of fuel is about €1.90, so the cost of the same holiday driving this summer will be €118.75, an increase of €43.75.
That might be small beer in the grand scheme of things, but only one of the many increases holidaymakers will encounter in 2022.
Eating out is also likely to be considerably more expensive.
Like every household in Ireland, restaurants are facing dramatic increases in the price of food and energy. Over recent months, the cost of cooking oil has gone up by more than 100 per cent. Chicken — a staple of most Irish restaurant menus — has climbed in price by 60 per cent, while the wholesale price of steak — another must-have feature on a menu — has also climbed significantly. Dairy products have soared in cost while the price of gas commonly used to cook the food we eat has, as has been well documented, gone up by more than 50 per cent in the last 12 months. Electricity has not been far behind.
Adrian Cummins of the Restaurant Association of Ireland is careful not to stray too far into the pricing arena but points out that, as well as the spike in everyday costs, restaurants are also having to contend with a huge shortage of labour.
“It is a fact that people right across the economy, including hospitality, are moving jobs and demanding higher wages. If your wage percentage is normally 34 per cent of turnover and is now close to 40 per cent, then that will have a massive impact on viability when the margins are really tight.”
You need deep enough pockets to enjoy a rounded holiday in Ireland. Accommodation — especially in summer or in holiday season — and food are going to take the biggest bite out of your budget
While the authority responsible for nurturing the domestic tourism market is monitoring prices closely, it is not unduly concerned just yet.
“Satisfaction ratings with Ireland as a destination among domestic visitors remain strong,” says Ann Marie Duffin of Fáilte Ireland. She points to its most recent raft of consumer research which indicated that 83 per cent of locals were extremely or very satisfied with their 2021 trip.
She accepts that prices have climbed as a result of “economic stresses, including rising costs in food and energy, increased wages in a competitive recruitment market and the cost of insurance. These are all factors that will find their way through to consumer prices.”
She says it is important that “a balance is struck. Businesses need to be able to make a sustainable trading margin but must pay attention to their pricing and how they can deliver added value and avoid any sense of excessive profit taking that could undermine businesses’ and Ireland’s reputation.”
She insists that there “is value to be found in Ireland” but says it is “important particularly during busy periods when demand is high, that visitors look beyond the usual tourist hotspots throughout the country to less traditional destinations. There they will find equally unique and high-quality experiences.”
A spokesman for Minister for Tourism Catherine Martin says there will “inevitably [be] additional pressure on hotel capacity and on pricing” this summer.
He points to a significant number of rooms — particularly in three-star hotels — that were needed to provide emergency accommodation to refugees fleeing the war in Ukraine.
He adds that businesses “across Ireland, and indeed the world, are facing significant cost pressures due to inflation and other economic factors”.
He stresses that value “isn’t just about the price you pay, it is also about what you get for that price and Irish businesses have proven before that there are numerous ways to ensure the customer experience matches the price”.
Fionn Davenport, a travel writer and author of multiple editions of the Lonely Planet guidebook for Ireland, says: “[Ireland] would definitely be considered one of the more expensive European destinations.
“You need deep enough pockets to enjoy a rounded holiday in Ireland. Accommodation — especially in summer or in holiday season — and food are going to take the biggest bite out of your budget, as will transport, especially if you travel by train or, in 2022, rent a car.”
Davenport says 2022 “was always going to be a tricky year” and points to “conflating factors, including the full return to normality and the desire to get out on holiday; the tourism industry looking to make up for the devastating shortfalls of the last two years; the energy crisis that has contributed to a spike in inflation; and the rise of costs pretty much everywhere”.
He also points to the war in Ukraine and the need to find accommodation for thousands of refugees in Ireland, many of whom have been placed in hotels across the country.
As much as we’re immensely proud of the country’s tourism product, we don’t hold back when criticising hoteliers or restaurateurs for inflating their prices and ripping us off
“I think it all means that holidays this year will be prohibitively expensive for many,” Davenport says.
His comments were borne out by a consumer sentiment index published by KBC Bank on Thursday, which found that higher prices mean 23 per cent of Irish families say they will not be able to afford to take a holiday this year, up from 19 per cent last year.
Davenport echoes the comments made by those working to boost tourism in Ireland when he suggests that it is “more about value for money than the actual cost of things”.
He says he is more likely to hear complaints about prices in Ireland from Irish people than from people visiting from overseas. “As much as we’re immensely proud of the country’s tourism product, we don’t hold back when criticising hoteliers or restaurateurs for inflating their prices and ripping us off.”
