The Irish Tourism Industry Confederation has called on the Government to take the sector seriously in the upcoming budget, and future-proof it against the backdrop of Brexit and dwindling numbers of inbound visitors from our biggest market, Britain.
Speaking at the launch of ITIC’s 2018 Pre Budget Submission in Dublin, CEO Eoghan O’Mara Walsh called for a €20m investment to offset Brexit and ramp up the targeting of alternative inbound markets with marketing drives.
Mr O’Mara Walsh and ITIC Chairman Maurice Pratt stressed that tourism is Ireland’s biggest indigenous employer, so it’s vital that it gets government backing to maintain, and increase, the 9m number of annual visitors to this country.
“We’re keen to express that tourism is an export industry,” said Mr O’Mara Walsh. “All those 9m visitors, whether from the US or Europe, or GB or emerging markets, they spend their hard-earned income in our country.
“If you look at the return to the exchequer from the tourism sector, last year it was €1.991bn. It only costs the exchequer what it budgets to Tourism Ireland and Fáilte Ireland, which is about €109m. So to my mind tourism is a very sound investment.”
He added that it’s also one of the few sectors where there is plenty of life outside the capital: “The biggest indigenous sector in this country is tourism. One in every nine job is in tourism and hospitality and the majority of those are outside Dublin, so there’s a great regional spread.”
Maurice Pratt warned that the warning signs are there, however, for the sector: “July was the first month in years where actually our tourism figures were down year-on-year – 1pc overall, and British figures were down 6pc – and remember that’s before Brexit takes effect.”
He added: “Competitiveness is our number one issue, number two is investing in the tourism sector to protect what we’ve got. We’re asking again for the Government to provide a €20m fund, the biggest chunk to be spent on Britain and another chunk to be spent on emerging markets.”
ITIC is also seeking a €60m-a-year fund to spend on improving the tourism product, particularly in lesser-visited area such as the northwest and the Midlands, which are being left in the shade by the success of the Wild Atlantic Way and Ireland’s Ancient East. ITIC said the €60m would be cost neutral next year and argued that the current capital allocation of €106m over six year is just 0.4pc of the State’s current capital budget and “wholly inadequate for tourism’s needs”.
Mr O’Mara Walsh added: “This sector is worth €8.3bn annually to Ireland.. employing just under 230,000. It’s every bit as important to Ireland as agencies (such as the IDA or Enterprise Ireland) in attracting investment.”
“Two in every five of our visitors are from Britain – and there were130,000 less British people holidaying in Ireland for the first seven months, so that’s quite significant… We reckon Brexit will cost Irish tourism at least €100m this year and it will have particular impact in Dublin, the border area and the south east where they tend to holiday.”
ITIC also insisted that the VAT rate of 9pc must be maintained, despite a revenue boom among Dublin hoteliers in particular. “I think value for money is critical for the success of Irish tourism. In the Celtic Tiger years we actually became poor value for money,” said Mr O’Mara Walsh, but added that Ireland is now seen as being a value for money destination.
“Prices in Dublin hotels have risen in recent times, but that’s mainly down to supply and demand. Over the last five years tourism numbers to Dublin have grown by about 33pc. In that same period supply of hotels has actually fallen by 6pc. The likes of the Montrose, the Berkeley Court are no longer with us. Hoteliers are saying that prices are only now at around 2006 levels so they were unsustainably low. Undeniably what we need is additional hotel stock in Dublin.”
But he added that the 9pc rate isn’t just helping hoteliers in the capital: “The tourism VAT rate is not just specific to one particular part of tourism, it’s actually an overall VAT rates for tourism. It applies to the price of tourist attractions, B&Bs, car hire, camping sites, and it’s a national picture as well. A lot of places outside Dublin have not seen the benefit and success of tourism as much as Dublin has. So there’s a big drive to make sure the regional benefits of tourism are seen by all, and the VAT rate is crucial to that.”
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