The Minister for Arts, Sport and Tourism, Mr O'Donoghue has strongly urged the tourism industry in Ireland to look closely at its prices.
Speaking at the launch of new marketing strategies for 2005 by Tourism Ireland and Fáilte Ireland, the Minister said there had clearly been "a marked deterioration" in price competitiveness.
He said that this had often been for reasons beyond the control of the industry but that it had had an adverse impact on traditional markets such as Britain, France and Germany.
"I cannot stress enough the need for the sector to take a long hard look at how it prices itself against ever-keener competition internationally", he said.
In his speech to tourism leaders yesterday, Mr O'Donoghue said 2004 had been a year of mixed fortunes. There had been a strong recovery from the US market but little or no growth in visitor numbers from Britain. He said European markets such as France and Germany had proven difficult to grow.
Mr O'Donoghue said the announcement by Ryanair to base aircraft at Shannon and by American Airlines to open routes to Ireland was a welcome boost and could help counter the imbalance between cities and other areas.
He told The Irish Times there were thousands of people in the US who wanted to come to Ireland last year but there was insufficient capacity to bring them.
He said his Department favoured a second terminal at Dublin Airport and that he believed the Minister for Transport, Mr Cullen, was sympathetic to the project. Tourism Ireland said it was concerned at the capacity issue at Dublin Airport.
The Minister said the Government would next year spend €123 million - an 8 per cent increase on this year - on supporting and promoting tourism.
Fáilte Ireland, the national tourism development body, and Tourism Ireland, the organisation which markets the country abroad for visitors, jointly announced that around €200 million will be spent over the next three years on marketing programmes aimed at increasing tourist numbers to the whole island to nine million by 2008.
The chief executive of Tourism Ireland, Mr Paul O'Toole, said that organisation wanted to see tourist numbers increased by 5 per cent next year.
"We will focus on six key elements in our plan - reinvigorating the British market, encouraging the spread of overseas visitors to all the regions, access development, e-marketing, business tourism and helping Northern Ireland tourism reach its potential," he said.
Fáilte Ireland is to seek to increase the number of Irish people taking breaks within the country, providing a counter-balance to Dublin's growth as a destination for overseas visitors.
