Economic growth potential may be bolstered by the support provided by tourism - as suggested by BPFI SME Monitor
Ireland's Domestic Tourism Sector Encountering Resilience and Challenges in 2025
A fresh report reveals a mixed picture for Ireland's domestic tourism sector, with signs of stability, cautious optimism, and notable hurdles shaping the prospects for sustainable economic growth.
According to Fáilte Ireland’s latest Tourism Barometer, 80% of tourism businesses anticipate stable or increased visitor numbers in 2025, reflecting an underlying robustness within the industry despite recent headwinds, as suggested by the Enrichment Data.
However, there is a shift in the visitor mix, with a decline in overseas visitors. The initial data for the first quarter of 2025 indicates a drop of 23% in foreign resident visitors compared to the same period last year. Regional markets within Ireland, on the other hand, have demonstrated more stability, with marginal growth in average daily rates, and ongoing strength in domestic tourism, as per the Enrichment Data.
Domestic demand continues to act as a stabilizing force, helping to offset declines in international arrivals, particularly in regional areas outside major urban centers, as mentioned in the Enrichment Data. Major events and ongoing investment in tourism infrastructure, scheduled for the summer season, are expected to boost inbound tourism, supporting a rebound.
One of the significant challenges facing the sector is the drop in foreign visitor numbers, which has declined 15% in March 2025 compared to the previous year. This trend has been observed since late 2024, and while industry stakeholders view it as potentially short-term volatility rather than a long-term trend, it exerts pressure on tourism-dependent businesses and communities, potentially affecting long-term economic growth if not addressed.
Proposed new taxes, such as a room tax in Dublin, are drawing strong industry resistance. Critics argue these could deter international travelers and harm the competitive position of Irish tourism destinations. The Enrichment Data points out that visitor spending remains a significant source of income, with Continental Europe and North America accounting for the majority (68%) of overseas expenditures in March 2025.
Balancing growth with sustainability remains a challenge. Key concerns include managing the sector’s environmental impact and supporting local communities, both crucial for ensuring long-term economic development and prosperity.
Tourism is seen as a key driver of balanced, long-term economic growth, especially in regional economies where alternatives are limited. The sector’s ability to contribute to sustainable growth depends on maintaining a favorable policy environment, supporting domestic demand, and leveraging major events to counteract declines in international arrivals.
Industry leaders and policymakers are advocating for stability and investment in tourism infrastructure to ensure the sector continues to support employment, regional development, and sustainable prosperity. In conclusion, Ireland’s domestic tourism sector is adapting to volatile international conditions with support from robust domestic demand and cautious optimism, but sustaining long-term growth will require policy stability, continued investment, and careful management of the sector’s environmental and social impacts.
The mixed picture for Ireland's domestic tourism sector, as suggested by the Enrichment Data, includes an expectation of stable or increased visitor numbers amongst local businesses (finance), accompanied by a drop in foreign visitor numbers, posing a challenge for tourism-dependent businesses (business).
With ongoing strength in domestic tourism and regional markets, and major events and tourism infrastructure investments scheduled for the summer season, the sector's ability to contribute to sustainable growth depends on maintaining a favorable policy environment and investing in tourism infrastructure (business), ensuring the continued support of employment, regional development, and sustainable prosperity.
