One of the main casualties of the deep international recession from 2008 onwards was the Irish tourism industry. There had been a nationwide expansion in tourism capacity through the bubble period with hotels built and expanded throughout the country. Many hotel developers ended up in NAMA and by 2011 it was reported that one-third of the entire hotel stock was for sale.

But there has been a sharp recovery since 2012 and the good news continues with strong visitor numbers in the early months of this year. Room rates have been rising and there is now a shortage of accommodation in Dublin. New hotels in the capital are being developed for the first time in a decade.

The number of overseas visitors coming to Ireland on holiday expanded by 8% in 2013 and by almost 9% in 2014. Indications from the early months point to another healthy increase in the current year and activity in the industry is back to peak levels in some areas.

The bounceback has several sources, including good luck. Ireland’s main source markets for holidaymakers are the United Kingdom and the United States, where economic recovery has been more vigorous than in continental Europe. An important factor has been the weakness of the euro exchange rate: this does not help the continental holidaymaker, but it has made Ireland notably less expensive for British and American visitors over the last year or so. Less than one-third of inbound holidaymakers come from countries in the eurozone, so the exchange rate really matters.

The necessary infrastructure to facilitate the recent rebound has cost nothing – it was already in place. Tourism needs transport and accommodation. Ireland’s air and sea ports had already been expanded when recession struck and there was no shortage of hotel rooms either.

Most visitors arrive by air – for every arrival by ferry, about eight arrive by air, mainly through Dublin, which accounts for over 80% of all passenger volume at the Republic’s airports. The airports at Cork and Shannon have adequate capacity for current volumes and neither has recovered to peak levels.

Peak levels

The position is slightly different at Dublin: volumes are getting back close to peak levels and, while there is adequate terminal capacity, the main runway gets congested in the summer months.

A planned second parallel runway at Dublin was deferred due to the downturn, but the plans have been dusted off and this project will likely go ahead over the next few years.

The completion of the radial sections of the motorway network connecting Dublin to the rest of the island has tended to funnel traffic to Dublin airport at the expense of the provincial and Northern Ireland airports.

Surface access by car or bus to Dublin airport has become quicker and more predictable and it is now home to the busiest bus station in Ireland. Most overseas visitors to the south and west enter through Dublin and the expansion of transatlantic routes there has been a boon to tourism countrywide.

The motorway network is not yet complete – the section linking Cork to Limerick fell victim to the budget cutbacks and the routes to the northwest have some unimproved sections. Tourist access can be enhanced further as these links are upgraded.

In the current season, there are as many as 20 transatlantic flights into Dublin on certain days and it is likely that Dublin’s attractions as a connecting hub will improve should the deal for International Airlines Group to acquire Aer Lingus go ahead. New routes to North American cities not currently served would open up valuable marketing opportunities for Irish tourism.

But direct connectivity to the east from Dublin remains weak. Both Dubai and Abu Dhabi have two flights per day, but these are not promising source markets. In particular, there is no direct service to Dublin from China, the fastest-growing tourism market and likely to be the biggest in the world before long. There are now direct services from at least one of the main Chinese cities to most larger European airports and it is important that Dublin join that list.

The excess capacity which proved so costly when the bubble burst was caused partly by excessive and ill-designed tax and grant schemes for the development of hotels and other tourism facilities.

With the industry finally turning the corner, the familiar voices are tuning up for another visit to the Exchequer trough. The provision of whatever new capacity might prove necessary this time round should be left to the unaided efforts of the developers.

Is it too much to hope that the politicians will leave well enough alone, and steer clear of repeating the dreary mistakes that brought the tourism sector so much grief when the last expansion turned to bust?