The hospitality industry needs to pay careful attention to pricing if it’s to capitalise on an increase in consumer spending, according to one economic expert.
Speaking at the National Hospitality Conference in Dublin yesterday, Dr Edgar Morganroth said that while he expects Ireland’s recovery to continue, the industry must keep relative prices to other markets under scrutiny.
“The data is predicting an increase in consumption expenditure in Ireland and that really is a turn around [from previous years],” said Morganroth, adding that he predicts very strong economic growth for the country.
Morganroth’s confidence is backed by today’s European Commission’s autumn economic forecast, which highlighted that Ireland will be the fastest growing economy in the European Union this year.
The Irish growth rate is expect to be 4.6 per cent, compared to an EU average of 1.3 per cent and a euro zone average of 0.8 per cent.
However, Morganroth, an associate research professor and programme coordinator for research on transport and infrastructure at the ESRI, warned the hospitality industry about the perils of pricing itself too expensively.
“The trend of prices rising faster than the general consumption price index is probably not something good [for the industry].” he said.
Morganroth doesn’t envisage a huge amount of inflation in Ireland over the next couple of years, while he believes the upswing in the economy will see more Irish people holidaying overseas rather than staying and spending their money at home.