Tourism is a real indicator of the Irish economy's health because of the billions of euros it earns in revenue, the estimated 150,000 employed and the roughly six million people who visit this State each year.
That is why yesterday's warning from the Irish Tourism Industry Confederation that the sector is over-priced merits the most serious attention. Coming on top of gloomy news about the world economy from the International Monetary Fund yesterday the report underlines the need for urgent action if the tourist industry is to remain competitive.
The confederation makes it clear that sectoral price inflation has run well ahead of the national average over the last two years, in a trend that began earlier when there was a real surge in the number coming here on holiday. The record figure of 6.3 million tourists in 2000 has now come down by half a million. The most recent survey of European tourists shows only one third considered Ireland very good value compared to two-thirds in 1995. Anyone who has had the opportunity to travel in Europe recently can validate that view. Ireland's journey up the comparative cost of living tables has been more than outstripped by tourism costs. The strong surge of Irish people going on tours all around the continent has probably as much to do with the search for genuine value as with this summer's weather.
Tourist numbers are down from the United States more because of continuing political uncertainty than inflation here. The continuing strength of the dollar has disguised cost increases for those who have come - but that will not outlast the expected fall in the dollar against the euro. Industry sources do not foresee any great buoyancy in the US market, as Iraq adds yet more uncertainty. And they have finally become convinced of the need to do much more to encourage visitors from continental Europe, after a period in which they became over-dependent on those from the UK and the US.
The remedial action they propose includes more price competitiveness. That is important for the tourism sector itself; but it extends elsewhere - to the cost of eating and drinking out and the higher cost of living for everyday items, all of which impinge directly on the cost of visiting Ireland. That is why this report will find a ready response not only from those in the tourism industry but from all who have had to bear the increased cost of living over the last few years.
If progress is to be made in attracting more European visitors to compensate for the reduced numbers of Americans the cost of transport access to Ireland will have to be addressed. At the annual general meeting of Ryanair yesterday Mr Michael O'Leary argued this case strongly. But even if his argument is conceded tourists would still have to deal with the high cost of living. This report is a valuable wake-up call about that reality as well as its own sector.