When the Minister for Arts, Sports and Tourism, Mr O'Donoghue, says that price inflation in the hospitality sector is considerably above the national average, the industry should take notice of a growing crisis. Ireland now ranks as the second most expensive country in Europe, after Finland, and with the quality of our welcome to visitors also under threat from the pressures of mass tourism, there is no simple answer to present difficulties.
That has not prevented the Irish Tourist Industry Confederation from suggesting that the expenditure of a further € 3.1 million in a new overseas marketing campaign in the United States and Europe would rescue the entire situation.
In the present difficult economic circumstances, spending State money in support of the private sector should be subjected to the same rigor that expenditure in the public sector attracts. Getting value for money should become a core principle. Any assessment of the US market should start with the fact that Ireland is not alone in experiencing a collapse in tourist numbers. The events of September 11th , taken in tandem with a succession of warnings by President Bush and his security advisers about the imminence of terrorist attacks, have encouraged Americans to stay at home. That tendency was already there because of an erratic economy. But a surge of 17 per cent in the value of the euro against the dollar during the past few months has underpinned it. The German market has been poor because of its sluggish economy. The numbers from Britain, Italy, Spain and Portugal are up, but there is some evidence of price-resistance.
Mr O'Donoghue will meet representatives of Bord Fáilte today to hear their analysis of the situation. And while he may be prepared to consider maintaining an advertising presence in the United States during the coming months, new marketing efforts are likely to be directed towards the UK and European markets. Poor weather, the World Cup and rising prices have had a negative impact on the domestic market. But that situation could change in response to good-value holiday breaks. Price and friendly service are key determinants when people book their holidays. The hospitality industry should concentrate on those aspects, rather than generate expectations that marketing will solve all their problems.