Hotel prices, car rental shortages, staff shortages – the “triple threat” blocking the full return of tourism

The industry report from the point of view of Irish Independent raises fears that inflationary pressures could make consumers tighter pockets.

It also outlines the shortage of hotel rooms and a reduced fleet of rental cars.

The Tourism Advisory Group report says some tour operators are “scrambling” to find beds, but pricing is proving to be a major challenge, particularly at weekends. The Advisory Group is understood to have been set up by Fáilte Ireland and will include the main representative groups in the sector.

It warns that key employees are being lost to other countries due to “extended” work permit processing times, causing “major frustration” among potential employers.

“Operating costs continue to rise to unprecedented levels and businesses struggle with the balance to maintain competitiveness while maintaining financial stability,” according to the group’s report, the Covid-19 Impact Bulletin.

It’s as some four star hotels in Dublin quote prices approaching €400 for a night’s accommodation.

The Bulletin says that apart from humanitarian aid, the most obvious impact of the Ukraine crisis on Ireland so far has been the war-related spike in commodity prices.

“The former is putting pressure on tourism accommodation capacity, while the latter has kept inflation at a decade-high of about 7 percent,” it said.

“A particular challenge concerns the crowding out of businesses resulting from three-star properties, particularly the commitment to three- to six-month contracts to meet emergency housing needs for Ukrainian citizens.

“Tour operators are scrambling to find alternative bed blocks, but pricing is proving to be a major challenge, especially at weekends.”

According to the report, Fáilte Ireland is working with government agencies to find suitable accommodation for arrivals from Ukraine while also monitoring the impact on tourism.

Elsewhere, a shortage of rental cars is highlighted, posing challenges for golf operators.

“Bottlenecks” in the rental car fleet lead to booking cancellations and inflationary pressures.

“There are also implications for interest rates quoted for next year,” it said.

Staff shortages “continue to weigh on companies”.

A report by Fáilte Ireland earlier this year estimated the number of job vacancies in the sector at 40,000.

Jenny De Saulles, Director of Sector Development at Fáilte Ireland, said the shortage of staff and skilled workers in the tourism and hospitality sector is unprecedented.

“This challenge is not unique to tourism or to Ireland – many sectors of the Irish economy face the same challenge and indeed this applies to tourism around the world,” she said.

“The job market has never been more competitive and the loss of skilled labor and the difficulty of recruiting and retaining staff is undoubtedly one of the biggest obstacles facing the tourism industry.
tor’s recovery from the pandemic.

“While this is an economy-wide issue, it underscores the imminence of the challenge for our industry as it approaches its most important time of the year and is often the only time feasible for smaller businesses – the summer season. ”

Ms De Saulles said there are now tens of thousands of vacancies from front-of-house to middle management.

“Tourism businesses across the country are telling us they are unable to hire the staff and skills they need to work at full capacity during the summer months,” she added.

“And that’s despite the fact that many offer higher salaries, advancement opportunities and flexible work patterns.”

There is no such thing as a ‘silver bullet’ and Fáilte Ireland is working on initiatives including a recruitment campaign targeting pensioners, parents and younger people ‘to show how working in the industry can fit their lifestyle’.

According to the report, industry organizations are advocating for chefs to be placed on a critical skills list, which would reduce work permit processing times to six weeks.

When asked about wait times, a spokesman for the enterprise ministry admitted there was a backlog — applications had risen to 27,666 last December, a 69 percent increase from the same period in 2020.

Processing times for work permits for critical skills and intra-company transfers have fallen to six weeks, but overall wait times for work permits are close to 22 weeks.

The spokesman said the department is aware of the need to prioritize approvals for seasonal roles.

She expects waiting times for all sectors to drop significantly in the coming weeks.

Meanwhile, the report said there are concerns among travel agents about a US requirement for negative antigen tests before returning home.

It also notes that the wage subsidy system is being phased out.

However, American visitors have been confirmed to be returning, with good bookings for May and June, and postponed weddings also ensure strong business. Easter was a good trading weekend and Dublin got a boost as big gigs returned, with Ed Sheeran fans “spurring a spike in demand”.

The report finds that while household budgets are being squeezed by high inflation, savings are buoyant.

The report concludes that the war in Ukraine is slowing rather than derailing the post-pandemic recovery of the tourism sector.

Eoghan O’Mara Walsh, CEO of the Irish Tourism Industry Confederation, said Irish tourism must retain its value.

“The costs for hotels and all tourism businesses, many of which are SMEs and operate on tight margins, are increasing at an alarming rate,” he said.

“Only so many of these cost increases can be borne by a business, and some have to be passed on to consumers.

“It is critical that cost increases for businesses are minimized where possible.”