New research from the Irish Tourism Industry Confederation shows that inflation in May in the tourism industry was seven times higher that the same time in 2019, which is putting significant cost pressure on the sector.

The Irish Tourism Industry Confederation's latest dashboard for May shows that the sector's recovery continues to gather pace.

But giving the prevailing market turbulence, concerns about the pace of recovery beyond the traditional summer season remain.

The Tourism Dashboard, published in association with AIB, compares each month to the same month in 2019, the last normal year for the Irish tourism industry.

May data shows total arrivals were down 15% compared to the same month in 2019, an improving trajectory with a 30% lag year to date.

Last month arrivals from Continental Europe performed most strongly, with arrivals down 13% on 2019, while the key North American market showed improvement with 220,000 arrivals.

With the Employment Wage Subsidy Scheme now ended, today's data also shows that tourism and hospitality has been the largest recipient with 29% of the scheme's total paid to businesses in the sector.

Eoghan O’Mara Walsh, CEO of ITIC, said the May data shows momentum building in terms of tourism's recovery.

But he cautioned that supply shortages in accommodation, car hire and labour will restrict growth over the peak summer months.

He also noted that business cost inflation was at an unprecedented level and warned that Irish tourism must retain its value for money proposition.

"Pent-up demand, as well as deferred bookings, are giving us a strong boost this year but 2023 is looking far less certain as inflation and interest rate increases bite," he stated.

Mr O'Mara Walsh urged Government to continue pro-tourism policies and to commit to maintaining tourism investment in October's budget.

Latest ITIC estimates point to a full recovery not being achieved in the tourism sector until 2026.

Eoghan O'Mara Walsh said the industry has bounced back much stronger than had been anticipated.

But speaking on RTÉ's Morning Ireland, he said that while Ireland is never going to be the cheapest destination, it does need to remain value for money.

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"There's a small number of providers who are probably thinking in the short-term and charging excessive prices, and I don't think that's good for the industry and I don't think it's reflective of the wider industry," he said.

"If you look at the average daily rate of hotels in Dublin in April rates were in or around €155 per room," he stated.

"That's 16% higher than the same month pre-pandemic. That's a significant jump and it is a result really of the escalating inflationary costs, which are posing a huge challenge for businesses," he said.

Mr O'Mara Walsh said there is very little availability for the month of June and the rest of the summer due to an acute supply shortage.

He said more hotels are needed so the tourism sector can grow, which will also moderate prices.

Mary Mackin, Hospitality Sector Strategist for AIB, said the May data continues to show strong visitor numbers coming to Ireland.

"It's great to see positive numbers coming from our key North American market which bodes well for a strong summer, notwithstanding the labour and inflationary challenges the industry is facing," she added.

The tourism sector was worth €9.2 billion in 2019 as 9.68 million international visitors came to the country that year.