Rip-off Ireland - Tourist sector must examine soaring costs

This country’s reputation as the leading rip-off merchant in Europe has been cemented by yesterday’s damning report of the National Competitiveness Council (NCC).

In benchmarking Ireland’s performance in relation to the prices of consumer goods and services, the NCC found that the average cost of goods and services has increased in this country by 22% more than our trading partners in the past four years.

This country’s consumer price inflation has exceeded the average of the eurozone and the member states of the EU for each of the past seven years.

In the last four years the inflation rate in Ireland has been more than double the inflation rate of the 15 member states of the EU - going up by 17.5% in comparison to 8.4%.

Between 2001 and 2002, Ireland became more expensive for consumer goods and services than Britain and Sweden, and by 2003 this country was almost as expensive as Finland, then the most expensive country within the eurozone.

Both Finland and Ireland were significantly ahead of the next most expensive country.

This year Ireland overtook Finland to earn the dubious distinction of being the most expensive country in the eurozone.

A particularly damning aspect of the NCC report is the finding that the rising prices here have been largely driven by domestic factors, not as a result of international inflation, or the cost of imported goods.

The main contributors to our inflation over the past five years have been restaurants and bars, which have been accountable for 25% of the total increase.

Other contributory factors have been price rises in alcohol and tobacco, which increased by 13%, while housing, water and fuel, along with recreation and cultural costs, have increased by 11%.

This country has become so expensive that Irish people who can afford to go on a holiday find it cheaper to go abroad rather than holiday in a traditional Irish resort.

In the circumstances, nobody should be surprised at the finding of the Tourism Action Group, which warns that vested tourism interests in this country have become so greedy that they are in danger of pricing themselves out of the market. Visitors were particularly critical of the cost of eating out and accommodation.

These businesses contend, on the other hand, their prices are being forced up by wage demands and other rising costs. Many blame the impact of the smoking ban and the change in the law requiring children to leave bar premises by 9pm, but a random sample of people interviewed by the Irish Examiner found that those complaints ranked very low among tourists. In fact, a great many people welcomed the changes.

Tourist numbers are up this year, but they are not staying here as long, because they find the country too expensive. It is time the tourist industry took a look at its own pricing structures, because the fault lies within their own scope.

They are in danger of undermining an industry that has consistently been one of the country’s best earners.