Smokescreen

It seems accepted by those in the hospitality business that tourism figures for most parts of the country are running towards 20% down on previous highs. The reasons for this recession in such an important sector of our economy are presently being much debated. Some point to the smoking ban as deterring visitors, others to our shrinking reputation as a welcoming society – but it is more likely to be a factor that surpasses even these. The reason that tourists are not flocking to our shores is quite probably a question of economics. The point is – Ireland at present is not value for money. In an era of cheap flights and multiple choice destinations, our country is now seen as an expensive option and this is not just the opinion of our overseas cousins, it is also a belief prevalent among our fellow citizens who are voting with their feet and leaving the country in droves to holiday in cheaper foreign destinations. And who can blame them? With the advent of regional airports and cheap flights to sunshine countries a few hours away, in which a fortnight’s holidays costs less than a week in Westport - it is a no-contest.
There is no doubt that Ireland is an expensive country - however, this is not the fault of the individual service provider. The so-called Celtic Tiger provided us with something we never had before - full employment. This had the obvious effect of causing competition for staff – and one of the laws of economics says that when demand exceeds supply, the cost goes up. In any company’s profit and loss account, the biggest item is wages – and the rise in these must translate into the price of the ultimate product.
But this is not the only exorbitant overhead that our business owner has to build into his prices – there is also the escalating cost of insurance, rates, electricity - not to mention bank interest and charges.
Ireland is going to price itself out of business if it is not careful. Our economy is inordinately dependent on the huge influx of American companies, especially in the IT and medical fields. How long will these international corporations stay, once they realise they can secure a workforce overseas for a fraction of the price? Even our indigenous companies are moving their manufacturing to the far-east in order to survive.
The agriculture and fishing sectors protest that things have never been so bad. If tourism collapses, and manufacturing continues to outsource, the prosperity bubble could quickly burst, and the fallacy that was at all times the Celtic Tiger will join the Children of Lir, Cuchulainn, Fionn MacCool, and other great myths that loom large in Irish folklore memory.