Hospitality staff shortage could hit tourism badly, Fáilte Ireland warns

Fáilte Ireland warned a lack of staff in the hospitality industry could lead to poor service and “long-term reputational damage” for tourism here.

The tourism agency also flagged concerns over rising inflation, a loss of hotel accommodation due to refugees fleeing the war in Ukraine, and how further Covid-19 restrictions this winter could hit visitor numbers.

In Fáilte Ireland’s latest risk register, it said “staff contractions” in the industry now represented the single biggest challenge facing tourism in the country.

“Poor service and depressed industry growth,” it said, “[could lead] to long-term reputational damage to Ireland as a destination for both domestic and international travellers.”

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It said Fáilte Ireland was working directly with the Department of Tourism on the issue and a project supporting careers in the sector was already under way.

Fáilte Ireland also had concerns about rising inflation in Ireland, which it said was higher than other popular destinations.

They said it had the potential to “suppress the ability of the industry to meet consumer demand and affect competitiveness”, according to the risk register.

Asked about the records, a spokesperson for Fáilte Ireland said they spoke for themselves and that they had nothing further to add.

Projects were under way to tackle perceptions of Ireland as an expensive place to visit, with Fáilte Ireland working with industry on ways to offer better value for money to visitors.

It was also worried about the potential for their remit being changed by Government, and potential shortfalls in funding.

It said their budgets were being hit “by increased costs due to inflation” and that they had met the Department of Tourism to discuss the implications of reduced budgets.

Capital spend

The risk register added: “A full review of the profile of capital spend has been completed and a list of projects ‘at risk’ have been compiled and shared with the department.”

Classified as medium risk was the war in Ukraine and how it could result in a “significant reduction” in accommodation for tourism.

It said Fáilte Ireland needed to be part of the Government’s response plan and that it was helping monitor trends on unregistered accommodation supply and the dispersion of Ukrainians around the country.

The tourism agency flagged the size of the rental car fleet, which they said was at 50 per cent of the levels in 2019.

This could “potentially result in lost visitors”, it said, with widespread complaints about the price of hiring a car throughout the summer.

Fáilte Ireland said it was supporting efforts to reform vehicle registration tax (VRT) to improve the finances of rental companies and support fleet investment.

Also a concern was the high cost of insurance, which the risk register said could result in “many businesses unable to continue in operation”.

Fáilte Ireland said it offered support to the tourism industry on ways it could lower its risk profile and influence the price it was quoted.

It also recommended creating groupings of similar businesses – particularly for indoor or outdoor activities – so they could be insured together and bring their individual costs down.

Concerns were raised as well over how tourism could be hit by another wave of Covid-19 restrictions if there are a large number of infections and the healthcare system is at risk.

Other risks flagged by Fáilte Ireland included the tourism industry and its sustainability in terms of climate change.

Considered at the lowest level of risk by the tourism promotion agency were the ongoing challenges associated with the fallout from Brexit and that the economic consequences of the war in Ukraine could result in “depression of international travel”.