Public contracts securing hotels for asylum-seeker housing a concern for Ireland’s tourism industry

Public contracts securing hotel accommodation for refugee and asylum seekers, particularly in rural Ireland, are now a concern for the prospects of Ireland’s tourism industry this year.

New state-of-play research from Fáilte Ireland, the domestic tourism authority, found a lack of availability, and related price hikes, among the issues of concern in the sector.

About 13 per cent of tourism accommodation registered with it is now tied up in public contracts, mostly to accommodate Ukrainian refugees and international protection applicants. This is higher when non-registered bed-space is taken into account.

Although its January survey of more than 1,200 tourism businesses indicated a period of recovery in 2023, with visitor numbers up on the previous year, there is much to temper the buoyant mood in advance of the coming tourist season.

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Community concerns regarding the use of hotels for refugee and asylum-seeker accommodation – most recently the D Hotel in Drogheda, Co Louth – are reflected in the mood of many tourism-reliant businesses, notably those dependent on downstream economic benefits. One-in-four survey respondents cited public contracts as cause for concern in 2024.

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In recent months, the proportion of affected hotels has been “broadly stable”, according to Fáilte Ireland, but with little sign of their returning to the tourist economy this year.

“We absolutely understand why they are needed and it’s important that we welcome people who need international protection, [and those] who are fleeing the war in Ukraine or other areas,” said chief executive Paul Kelly.

“But I suppose, from a tourism point of view, we are just flagging the impact of that on the tourism economy.”

The amount of hotels used in publicly contracted accommodation is also unevenly dispersed, with the proportion higher in some counties than others.

Mr Kelly said he was unaware of anything else that had ever had “such a dramatic effect” on hotel capacity.

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“We know that the Government are working hard to try and move to alternative solutions and develop welcome centres and reception centres. From a tourism point of view, we just want to see that work progress as fast as possible.”

The survey, due to be published on Wednesday, placed other industry concerns more prominently, however, including rising costs, shrinking disposable incomes and Irish holiday-makers going abroad, as well as staff shortages and even the prospect of poor weather.

It noted a number of positives, including rising visitor numbers across most business types last year, including in hotels. All regions experienced improved volumes.

Three in five businesses saw an increase, with the North American market in particular rising for 61 per cent of them. Almost half (44 per cent) expect to see visitor numbers rise again this year.

However, Fáilte Ireland found “significant” variation by sector – tour operators, hotels and attractions benefited greatly from increased visitor numbers, but the experience of the food and drink sector “could not be more different with many having struggled to survive in 2023″. Many expect similar conditions this year.

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Most hotels remained profitable but, the research warned, rising business costs are putting them under pressure to increase revenues.

Other concerns outlined by the respondents included the potential for consumers to move elsewhere as a consequence of costs in Ireland, while in Dublin almost half (42 per cent) cited antisocial behaviour.

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With North America continuing to play a key role in domestic tourism, there is also some political concern for the year ahead. Operators noted “a little nervousness about what the [US] election year may hold as sometimes this is said to affect travel from the USA”.

Fáilte Ireland said that, as per other barometers, rising costs continue to present “the most significant challenge”. With many already under pressure from increases in energy, rates and insurance bills, the rise in the minimum wage is now another source of concern.

“It’s good to see that most businesses are predicting further growth but it is a more mixed bag,” Mr Kelly said.

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