An “acute” shortage of hotel rooms in Dublin and “modest” international awareness of the Wild Atlantic Way are major threats to the success of Irish tourism this year.
At its annual review of the tourism industry, Fáilte Ireland said after a record 2015, the sector could expect further growth this year.
However, it warned that the growing optimism in the sector needs to be tempered by the fact that challenges remain in the sector.
Fáilte Ireland’s chairman Michael Cawley said the huge success of 2015 was largely driven by “benign external factors” and competitiveness at home.
He warned that a low recognition of the Wild Atlantic Way internationally and an acute shortage of hotel rooms in Dublin were major challenges .
“We know, for example, that the Wild Atlantic Way is a fantastic tourism proposition but has low international recognition at this point. When we survey potential overseas visitors, most are unaware of the new initiative.
“However, when they are told about what is on offer, the response is phenomenal. Clearly, as we build awareness, the Wild Atlantic Way is going to make a significant and transformative impact in the West,” he said.
Fáilte Ireland pointed out that the shortage of hotel rooms in Dublin was causing rates to soar and estimates that an additional bedroom stock of 5,000 units is required so that the country does not lose out on valuable business.
Mr Cawley said to sustain the success of 2015, the next phase of tourism growth must be centred on sustaining better value for money and offering more compelling and authentic branded visitor experiences rather than relying on a hazy green image and warm welcome.
In 2016, Fáilte Ireland will invest over €55m in developing and promoting its leisure and business tourism brands. Some €13m will be allocated to Dublin, €18m to Ireland’s Ancient East, €19m to the Wild Atlantic Way and €5m to securing conference and event business.
The agency has secured over €100m of capital funding over five years.
Mr Cawley said, despite the challenges which the sector faces, 2016 looks set to be another strong year for Irish tourism.
“Assuming no major external shocks, I believe Irish tourism is well placed to grow again in 2016, possibly by as much as 6%.
“The access capacity to the country is set to increase again this season, economic conditions in key source markets are generally positive and our brand offering is compelling and improving.
“Continuing favourable exchange rates are also helpful. This all augurs well for the wider economy, with total tourism revenues likely to hit €8bn this year with obvious consequences for further job creation,” he said.
The Fáilte Ireland review said that almost 70% of tourism businesses saw profitability improve in 2015, while 65% of hotel ands B&Bs expect their business to further increase in 2016.
In terms of jobs, two in five businesses plan to increase the number of people they employ in the next two to three years including four in five (79%) hotels.
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