'Silver lining' for Irish tourism despite euro sliding to $1 parity against dollar

The tourism outlook is much more uncertain as the global cost-of-living crisis unfolds, according to the Irish Tourism Industry Confederation.

New figures from the Irish Tourism Industry Confederation show that foreign tourism is recovering as air routes are restored following the worst of the Covid-19 crisis. 

There is "a silver lining" from the euro reaching parity against the dollar because US tourists will have more to spend vacationing in Ireland this summer, the head of the Irish tourism confederation has said. 

Eoghan O'Meara Walsh, chief executive of the Irish Tourism Industry Confederation, or ITIC, said that the fall in the euro boosts the spending of US tourists.            

"The silver lining is that there is better value for American tourists coming to Ireland," Mr O'Meara Walsh said.

"We all know that tourism prices have increased in Ireland for a variety of factors mainly driven by rising costs. And the strong dollar obviously cushions that to some extent," he told the Irish Examiner. 

US tourists spend more, stay longer, and tour the regions more than their British and continental European counterparts, are "committed" and " very valuable" tourists for the industry here, Mr O'Meara Walsh said.    

New figures from the Irish Tourism Industry Confederation show that foreign tourism is recovering as air routes are restored following the worst of the Covid-19 crisis. 

Overall, ITIC said total tourist arrivals at Dublin, Cork, and Shannon airports, and disembarking from ferries, are still down 13% in June from June in 2019, but that the "recovery momentum continues although cost inflation, labour shortages, and capacity shortfalls all pose challenges with an uncertain outlook ahead," it said. 

Mr O'Meara Walsh said that Aer Lingus has restored much of its transatlantic capacity, while Tourism Ireland, the State agency, is stepping up its advertising campaign for the US this year and is opening an office in San Francisco to attract more tourists from the West Coast. 

The outlook is much more uncertain as the global cost-of-living crisis unfolds.    

"This particular year is a strange year because there is an awful amount of pent-up demand, savings, and deferred bookings. I think you will see the impact of the cost-of-living crisis and macroeconomic concerns next year," he said. 

"From the autumn on, we are a little bit more concerned. Next year I think will be softer for inward tourism from all markets, which is why the Government's budget will be most important for us," he said.      

Meanwhile, the snarl ups and staff shortages at Dublin Airport and other European airports weren't leading to reputational damage for Irish tourism, he said.    

Currency traders said the euro rebounded late in the Tuesday session after earlier sliding to a 20-year low and effectively reaching parity against the dollar as investors worried that an energy crisis will tip the eurozone into recession.

The euro traded at $1.00005, the lowest since December 2002, after data showed that German investor sentiment plunged below levels at the outset of the pandemic in July due to energy concerns, supply bottlenecks and rate hikes from the European Central Bank. 

“For all intents and purposes, it effectively reached parity,” said Mazen Issa, at TD Securities in New York. 

Additional reporting Reuters