Fears visitor numbers to Ireland will slip to lowest rate in years amid cost, capacity and competitiveness challenges

The Irish Tourism Industry Confederation (ITIC) said that the sector faces multiple challenges over the coming months. These include reduced airline seat capacity, global instability from wars in Gaza and Ukraine to the potential impact of US president Donald Trump’s “America First” strategy and economic issues on core visitor markets including the UK and Germany.

Irish tourism is expected to deliver revenue growth of between 5pc and 7pc, but growth in the number of visitors is expected to slip to its lowest rate for years.

The European Travel Commission (ETC) has predicted average tourism growth across the 27 member states to exceed 8pc.

However, the ITIC predicted that Ireland will fall behind the EU average – potentially peaking at 5pc growth.

Tourism Ireland estimated that the economy received a €7bn boost from tourists last year. Over 300,000 jobs are supported by overseas tourism with Tourism Ireland aiming to boost the value of the sector to €9bn by 2030.

St Patrick’s Day will witness the peak of a €65m marketing campaign by Tourism Ireland across 13 core markets.

CEO Alice Mansergh said Ireland has “enormous potential ahead” for the tourism sector, though there are also global challenges.

A key element of Ireland’s tourism marketing drive will be AI-optimised social media and content that highlights the country’s unique attractions and cultural heritage.

Tourism revenue growth has been boosted by the fact inflation has eased, prices have stabilised and Ireland will be able to offer better “value for money” in accommodation terms thanks to over 7,000 new hotel bedrooms being delivered by the construction sector.

A significant number of hotel and guest-house rooms will also be returned to tourism use as refugees are allocated alternative accommodation.

Leading hoteliers said last year was a good year and this season was expected to deliver further growth.

InterContinental Hotel Dublin general manager Nicky Logue said US business was strong while UK trade was down on previous years.

“Last year was a very strong year and, bar any great shocks, I predict the same in 2025, albeit with a lot of pressure on the bottom line with increasing costs of doing business,” he said.

“Quarter one in Dublin seems to have been a mixed bag, but thankfully we performed well year-on-year due to strong group business from the US in particular, and rugby. This year, there are less events planned currently in Dublin versus 2024 and with the refurbishment of the RDS – so we expect numbers to be down overall for events.

“Leisure business remains strong from the US, but the UK market is definitely not as strong as it has been in years gone by. Corporate business remains challenging with people travelling less and many still working from home a couple of days a week.”

Ireland and Slovenia are the only two European countries where airline seat capacity will decline this year.

In Ireland, seat capacity will fall by 3.3pc. That contrasts with countries like Hungary (+18.9pc), Greece (+13.3pc), Turkey (+10.4pc) and Poland (+9.6pc) where airline seat capacity is surging.

Ireland’s neighbours are also predicting increases in airline seat capacity including the UK (+3.9pc), France (+7.1pc), Spain (+8.1pc), Italy (+6.1pc) and Denmark (+8.3pc).

Tourism groups said the main “handbrake on growth” is the passenger cap at Dublin Airport.

“With 70pc of the Irish tourism economy dependent on international visitation, it is vital that the main gateway into the country has headroom to grow,” an ITIC spokesperson said.

“Although there is a court ruling to put a ‘stay’ on the cap for next summer, the issue of restrictions at Dublin growth is as pertinent as ever.

“This manifested itself [last] winter with air access into the country being down 3pc – the only top-20 European destination showing a decline.

“Growth at Shannon and Cork Airports must be facilitated, but this will not compensate for lost business at Dublin.”

Further concern among Irish tourism officials is focused on core markets including the US, UK and Germany.

Transatlantic access to Ireland is at arguably its greatest level thanks to fuel-efficient, long-range aircraft that offer more regional connections away from the major US cities of New York, Chicago and Boston.

However, Irish officials are carefully monitoring Mr Trump’s “America First” strategy to see if it impacts on overseas tourism.

ITIC officials said that, as the traditional tourism season begins with St Patrick’s Day, the major positive is the strength of the US dollar which will give US holidaymakers to Ireland a significant spending boost.

“But trade and tariff uncertainty could depress travel demand from Ireland’s most important source market,” they said.

Concerns are also compounded by the fact that the German economy is sluggish and the UK is also struggling with growth. From January 1 to October 31 last year, Ireland welcomed 5.79 million visitors which was an 8pc increase compared to the same period in 2023.

Those visitors spent €5.38bn, an increase of 15pc compared to the same period in 2023.

However, Ireland witnessed a 5pc decline last October in overseas visitor numbers compared to the previous year – largely triggered by a fall in UK visitor numbers.

The number of visitors to Ireland from the UK fell by 13pc in the space of 12 months.

With forecasters predicting a tough year for the UK economy in 2025 there are concerns that discretionary tourism – and visits to Ireland – could be hit further. In March last year, one-in-three foreign visitors arriving in Ireland was from the UK.