Shortages and price hikes affecting Ireland’s tourism sector made worse by our own decisions

Sinn Féin TD Imelda Munster this week wrote to the Oireachtas Committee on Tourism to request a meeting about the “spiralling cost” of hotels. The Louth representative correctly observed that it is extremely difficult for people on ordinary incomes to find affordable hotel accommodation.

One of the reasons prices are spiralling is because there is a major shortage of hotel accommodation, most acutely in Dublin, but also in many tourism hotspots across the country. This shortage is exacerbated because thousands of hotels rooms are in use by Ukrainian refugees and also, separately, by asylum seekers accommodated in the State’s direct provision system. But the enthusiastic return of tourism and business travel would have been enough on its own to show up the shortage.

Yet, just 2½ years ago, councillors in Dublin City Council, which includes eight Sinn Féin members, voted to limit hotel development in the city because they felt there were far too many of them being built, even as tourism industry experts told them the opposite. The political left at the time was intoxicated by the simplistic No More Hotels campaign that sprang into life after the Bernard Shaw, a Dublin city pub and bastion of urban culture, closed to make way for a hotel development scheme.

Now here we are a short time later and there are, indeed, No More Hotels, just not in the way that the leaders of that misguided campaign meant with their slogan. There are no more hotels for people who need them, and there won’t be enough until far more of them are built. The shortage will have a direct cost to the economy and to communities in terms of lost business, employment and investment.

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We were told by the campaigners at the time that Dublin in particular was creaking under the weight of new hotels that — it was implied — were not needed. A spurious anti-hotel culture took hold in media, political and public discourse. It was cynically encouraged by certain politicians who should have known better, but who spied an opportunity for themselves in latching on to a populist campaign.

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It is simply a fact to state that it was politicians almost entirely on the left of the political spectrum who nurtured that campaign of anti-hotel thinking. They conflated the commercial rush to build hotels with other completely unrelated issues, such as the shortage of affordable housing. Don’t hold your breath waiting for any of those politicians to admit they were wrong. They’ve all gone quiet about hotels now.

The self-defeating campaign to limit much-needed hotel development is a neat example of the short-term thinking that dominates tourism planning in this country. That criticism is not directed at the State tourism agencies, Tourism Ireland and Fáilte Ireland, who are among the most effective of the State’s pro-business agencies. Rather, it is aimed at the wider Irish political attitude towards the tourism industry that leads to poor policymaking, which makes the tourism agencies’ jobs all the harder.

Here is another example of this pandemic of short-term thinking that has damaged the tourism and travel industries. Over the past week, there has been a huge media and political outcry about the cost of car rental. It could easily cost a visitor more than €2,000 to rent a standard family car for a week in Ireland this summer. One prospective US visitor, Oisin Hayes, was widely quoted in the media this week after he was asked to pay close to €10,000 by a car rental company for a three-week rental in July.

That is ludicrous, people said. And they are absolutely right. But how did such ludicrousness arise? It is because there is a huge shortage of car rental stock. That happened, in large part, because the car rental companies were forced to sell off their fleets in Ireland in 2020 and 2021, because they had almost no customers for them. They had no customers because the Government, under the advice of public health authorities, decided to effectively scupper almost all international travel for two years, to combat coronavirus. Other European countries limited travel, but not to anything like the extent we did.

When you effectively close the borders, as Ireland did for long periods, what do you think is going to happen to all the companies, such as car rental firms, who rely on people moving over those borders? Wage subsidies keep staff on the books. But it doesn’t help to capitalise balance sheets. The car companies couldn’t afford to keep their cars and now that they’re needed again they can’t buy any.

The shortage of cars to rent in Ireland is a perfect example of the economic scarring that policymakers were repeatedly warned would arise from our uniquely strict approach to throttling travel in recent years. The acute shortage of chefs, waiting staff and other tourism and hospitality workers was also exacerbated by this approach, as many foreign workers felt they had no option but to return home, and they have yet to come back. We did much of this damage to ourselves.

Ireland derived almost no benefit, in terms of virus outcomes, from adopting such a stone-age attitude to the travel industry during the pandemic. We endured the same virus peaks as almost every other European country except ours turned out to worse at times. Virus variants still flowed over the borders because, as New Zealand eventually found out and China is finding out now, they cannot be kept out.

Ireland also blew €25 million on a disastrous and illiberal system of mandatory hotel quarantine for visitors, which also had little discernible effect on the trajectory of the virus here. Don’t listen to the cadre of activist-scientists who shouted loudest for it, and who, like the anti-hotel campaigners, will never admit that they were wrong. Just as they were wrong about the opening of schools earlier this year and about the protective measures required to return society to some form of normality.

The decision to introduce mandatory hotel quarantine, just like the decisions to vote for no more hotels or to erect stupid obstacles at our borders, arose from the uniquely Irish system of muddled thinking towards the strategic development of the travel industry. Such muddled thinking was always going to come back to bite us in our economic backside. And now it has. This was all so predictable.