Falling North American visitor numbers, higher costs and accommodation capacity are the main challenges facing the country's tourism sector, according to the Irish Tourism Industry Confederation (ITIC).
The ITIC, which is holding its annual conference in Dublin today, is calling for a number of measures from Government to address the situation, including extending the 9% VAT rate to tourist attractions, which it said would "draw visitors into towns and communities throughout the country".
It comes as figures this week from the Central Statistics Office show visitor numbers to Ireland from North America fell by 3% in August compared with the same month last year, while spending by tourists from the region also fell by 3% to €262m.
North America is an important tourism market here, as US visitors in particular tend to stay longer and spend more than others visiting Ireland.
Tourism bodies are also calling for more tourist accommodation to be built, especially in the regions, amid concerns over the impact of new rules on short-term lets.
Further highlighting the growing influence of artificial intelligence in all sectors, the ITIC has announced a partnership with OpenAI to establish a "Tourism Academy" to provide training and upskilling to tourism SMEs.
The chief executive of the Irish Tourism Industry Confederation (ITIC) said today that the number of people visiting the country is up, but the number coming from North America is down and is making the industry "nervous".
The ITIC said the figures show the need to protect Ireland's competitiveness and it has called for the 9% VAT rate for hospitality to be extended to other tourism businesses.
Speaking on RTÉ's Morning Ireland, Eoghan O'Mara Walsh said visitor numbers from North America had fallen, particularly from the US.
"If you look at year-to-date, visitor numbers are up, but we've seen a dip in North American visitors for two of the last three months," Eoghan O'Mara Walsh said.
Irish tourism could have 'problem'
"So, it's a bit of a warning sign and the industry, which is gathering today in Dublin, is getting a little bit nervous about the rest of the year and 2027.
"There's a lot of macroeconomic uncertainty out there, a lot of geopolitical things and it's affecting demand."
Mr O'Mara Walsh said that "if something happened to the US market, Irish tourism would have a problem".
He said there are various factors affecting the drop-off and, as a result, the organisation is making a call for competitiveness measures and capacity increases in next week's budget.
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"So undoubtedly there's external factors which we can't control, but there's some things we can control. One of those is the costs of business. One of those is how competitive we are and one of those is how well we market Ireland abroad".
Mr O'Mara Walsh said the confederation is seeking the 9% VAT rate to be restored to the sector in the budget.
"So, we're calling for the VAT rate of 9% to be extended, in fact restored to the likes of visitor attractions, camping sites and adventure operators. They're regional businesses, they're SMEs, they're all along the Wild Atlantic Way.
"They're wrestling with escalating costs of business elsewhere, they're low margin and extending the VAT at 9%, which they always used to have would be very beneficial."
He said the aim is to make businesses "more viable" saying "if businesses can't make a profit, then they're in trouble".
He added that value is critical for Irish businesses.
Mr O’Mara Walsh said: "The point of it is to make tourism a more viable sector for businesses to operate in. If you look at energy costs, if you look at labour costs, if you look at excise rates, if you look at all the kind of other input costs ... it's to make businesses more viable.
"And I think a lot of businesses you would find in the attraction sector, in the camping sites and in the adventure activity operators would pass it on, but that's up to each individual business.
"Value is absolutely critical for our tourism. We're not the cheapest destination. We never claim to be the cheapest destination."
He said that the Government saw the benefits of restoring the 9% VAT rate for food businesses and as a result now businesses are more viable and the tourism product is stronger.
