Estimates for the number of foreign visitors arriving in 2022 have been released by the Irish Tourism Industry Confederation (ITIC).
ITIC estimates that seven million foreign visitors visited Ireland this year, a recovery of 73% from the pre-pandemic peak of 2019.
The largest source market was Mainland Europe, where 1.5 million high-spending North Americans also travelled. Despite 2022 performing better than expected, “significant anxiety about 2023 with cost inflation, a sharp reduction in tourism accommodation supply, and a potential VAT increase all worrying tourism leaders”.
Estimates for next year’s performance range from a decline from this year to single-digit growth.
Air access and demand from important source markets appear strong, but accurate forecasting is difficult due to global economic headwinds, cost inflation, and domestic supply constraints.
ITIC estimate that a full tourism recovery to 2019 levels is not likely to be achieved until 2026.
Elaina Fitzgerald Kane, chairperson of ITIC, said: “2022 has thankfully been a stronger year than anticipated with pent-up demand, deferred bookings and accumulated savings all boosting business this year. It is vital that the sector returns to sustainable growth.”
Jim Power, an economist, recently finished a report for ITIC on the economic case for keeping the current VAT rate of 9% rather than the government’s current proposal to reinstate the 13.5% starting on March 1, 2023.
He estimated that the VAT increase would cost 24,000 jobs and result in a 4.1% inflationary increase for lodging and food services.
“Hopefully Minister McGrath heeds these warnings and quickly gives the industry certainty about the 9 per cent VAT rate going forward,” said Ms Fitzgerald Kane.