2 weeks Ago By Trevor White, Jim Deegan
We are good at tourism. Being kind to strangers is a delightful part of what it means to be Irish. And we certainly welcome the annual influx of tourists from the US.
They bring money, terrific energy and a particular set of expectations. (“No, sir, rubbing her breasts will not bring you good luck.”) But apparently our American friends are not staying as long as they once did – bad news for an industry that measures success in bed nights.
There are three responses to this slump. The first is to blame foreigners and have a good sulk. Outside the White House, this sort of behaviour is generally frowned upon, but it remains a viable option.
The second response is to continue worshipping at the church of endless growth. That means campaigning to remove the cap on passenger numbers in Dublin Airport . This response is presented (serious face) as an effort to save jobs.
It is the “mature” thing to do. Right now, you’ll hear a lot of this blather from a great many people who should know better. That second response is what happens when vested interests meet short-term thinking.
But there is a third possible response to this crisis: to talk. We could have a big conversation about what it might mean to be a popular tourist destination in the context of a climate emergency . For too long that debate has happened behind closed doors.
Some years ago, I served as a board member of Tourism Ireland , a government-sponsored organisation to market the island of Ireland overseas. At board meetings, the most feared voice belonged to a senior executive in Ryanair . There is no suggestion of wrongdoing here.
It’s just the way that large corporations operate in capitalist economies: get close to power and make your voice heard. As a result, it can sometimes be hard to see how the public interest is represented. Look, for example, at the numbers.
Our tourist board, Fáilte Ireland, is targeting 10 million visitors a year. Do we really want 10 million tourists every year? Maybe. Maybe not.
There are good arguments either way, and nuance in between: for example, do we want those tourists to spend more time in, say, Templemore or Temple Bar? And where should they stay? Are Irish national interests better served by filling up hostels or five-star hotels? [ Why is Ireland-US tourist data going south? Opens in new window ] Staying in Temple Bar (no thanks!), the so-called cultural quarter resembles a giant alcoholic theme park. This may be a good idea, but it is certainly not the result of a national effort. Rather, it speaks to the outsize influence that a small number of people have on public policy.
Let’s not waste this crisis. Let’s use it to debate the future of Irish tourism. That does not mean becoming less hospitable.
It means considering a different set of priorities. Crucially, let’s be honest enough to admit the necessity of cutting air travel, which is the only way to significantly reduce the impact of aviation on our climate in the short term. It’s a serious conversation because this is an island; because many jobs depend on tourism; and because climate change represents an existential threat to the future of our species.
Reader, we need to talk about tourism. Trevor White is a writer and founder of the Little Museum of Dublin Recent headlines have warned of a crisis in tourism . Data from the Central Statistics Office (CSO) suggests that visitor numbers have been declining since September 2024, dropping sharply by 25 per cent in January and 30 per cent in February 2025 on the previous year.
Meanwhile, figures from the United Nations World Tourism Organisation shows the number of international tourists arriving here fell from 10.961 million in 2019 to 6.3 million in 2023.
Industry stakeholders are not so sure. They insist such declines are not in accordance with their own data for hotels and visitor attractions. Part of the problem is differing methodology, and the discrepancy shows the need for real-time tourism dashboards that incorporate data from myriad sources What is clear, however, is that tourism businesses are coming under a relentless pressure to produce an excellent product and service experience in the face of ever-more-difficult conditions.
Price comparison data from Eurostat reveals that Ireland is the second most expensive country in the EU for a basket of 2,000 consumer goods and services (Denmark gets the premier position). There’s no doubt that Irish tourism competitiveness is impacted by this. A plethora of significant increases in utility and energy costs and changes to the minimum wage in recent years have made it a very challenging time to operate a tourism business.
Many businesses reacted by reducing profit margins and increasing prices. Of course, increasing prices soon runs up against declining competitiveness and ultimately impacts on demand. The Irish Government did respond with very generous measures to offset the worst of the cost increases, but this can’t be a long-term strategy.
What we need now is a clear focus on innovation and improving productivity. More than 30 years ago, the Nobel Prize winning economist Paul Krugman said “productivity isn’t everything but in the long run it is almost everything”. Former European Central Bank president Mario Draghi has addressed the wider problems of anaemic economic growth in Europe relative to our US counterparts, and it transpires that lower productivity is the fundamental problem.
In essence, economists care about productivity because without it, we cannot improve overall living standards. CSO data on productivity for the last quarter of 2024 gives some insight into the challenges for Ireland’s domestic businesses. For example, labour productivity in the domestic sector was recorded at €59.
60 per hour, while labour productivity in the foreign sector was €410.80. A paper last year by Chris Smart and Michael Taft of the Nevin Economic Research Institute revealed that Irish domestically owned businesses generate low levels of productivity compared to other small open economies in Europe.
The real value added per employee in hospitality was 16.5 per cent below our counterparts. Of course, tourism comprises more than hospitality, but the domestic productivity data reveals the challenge across all businesses.
What does productivity mean in the context of tourism? In essence, it is about the efficient use of resources to generate maximum output and to satisfy customer needs. Depending on the business, various productivity measures can be used: metrics like occupancy rates, customer satisfaction, throughput of visitors per hour and waste reduction can all contribute to enhanced productivity and financial performance. Productivity can also be improved by the use of more skilled labour, adoption of new technologies and management practices, and investment in infrastructure.
Importantly, the use of AI and data are already being deployed to reduce costs and better understand the behaviour and spending patterns of tourists, all leading to greater profitability and enhanced customer satisfaction. [ ‘That could be catastrophic’: North American market a concern for Irish tourism Opens in new window ] Significant barriers to the adoption of productivity-enhancing behaviour prevail in tourism, as most firms employ fewer than 50 employees and a significant proportion are micro enterprises with nine or fewer employees. While such businesses can often exhibit high levels of innovation and creativity, they also tend to be very operationally focused, find it difficult to access capital and exhibit low levels of education, training and research and development.
This acts as a barrier to improving productivity – something most pronounced in relation to the adoption of new technologies. Interestingly, our agriculture sector tackles such barriers on productivity by linking farmers with researchers across the university sector via Teagasc. It’s long overdue that a similar investment and a strategic approach be adopted for tourism.
Being competitive in an increasingly competitive tourism marketplace requires the delivery of authentic experiences in a seamless manner and at good value. Our rich creative culture and our people are the bedrock of our comparative advantage. If we focus on enhancing productivity we can achieve great things.
Jim Deegan is Professor of Tourism Policy, director of the National Centre for Tourism Policy Studies and a member of the economics department at UL ..
