Leo Varadkar has warned that the war in Ukraine will have a “negative impact on tourism” next spring and summer and could lead to increased airfares.
It comes as the Government plans to provide funding to communities to help them cope with an influx of refugees.
It was reported on Thursday that Cabinet ministers had expressed concerns about the impact that the refugee crisis would have on Ireland’s tourism industry.
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A large number of refugees are currently being put up in hotels as the Government scrambles to find alternative long-term accommodation.
One senior minister told The Mirror that while hotels are being compensated through Government-issued contracts, the lack of hotel rooms for tourists could have a knock-on impact on restaurants and cafes in the area.
At a press conference on Thursday morning, Mr Varadkar suggested that the war in Ukraine will continue to have an impact on Irish tourism.
When asked by The Mirror if additional supports would be put in place to help these businesses, he argued that they are already eligible for a range of schemes.
“I think that the war in Ukraine is going to have a negative impact on tourism,” Mr Varadkar said.
“It's not just the fact that maybe 10, 20% of hotel rooms will be used to accommodate Ukrainians.
“There's also the increase in airfares, for example, and reduced consumer sentiments.
“You would think it likely that next spring and summer will be as good for the tourism sector as maybe we hoped it would be.
“I wouldn't discount the fact that the biggest difficulties that the sector has is finding staff. Finding staff is as big an issue if not a greater issue than energy costs.”
At the Fine Gael parliamentary party meeting on Wednesday evening, Mr Varadkar said he wanted to see the establishment of a multi-million euro community fund for areas that have welcomed a lot of refugees to improve public facilities such as schools, public transports, community and sporting facilities.
Both the Tánaiste and Public Expenditure Minister Michael McGrath backed this suggestion.
Mr Varadkar said that there is already a community fund and money has already been allocated.
“I think in recognition of the fact that so many Irish communities have welcomed so many Ukrainians into their communities, that there should be some community gain for that,” he said.
“It might be improvements in school, it might be improvements to public transport, it might be improvements to community services.”
Minister McGrath said that details of the proposals are being worked out with Rural and Community Development Minister Heather Humphreys.
The Public Expenditure Minister also stated that he believes that the money allocated to support Ukrainian refugees as part of last month’s Budget will be enough.
He accepted that while a lot of money is being spent on current expenditures, such as hotel rooms, it is hoped that this money will soon go towards more permanent infrastructure that could be used for other people who are currently seeking accommodation and are on the social housing list.
The Cabinet is expected to meet before the end of the week to sign off on plans to increase the payment for those offering accommodation to refugees to €800.
While sources said that the meeting could take place as early as Thursday, the Irish Mirror understands that the memo has not been drafted.
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