'Drift in focus' is tourism threat
Tourism has the potential to create 80,000 new jobs in the next six years but a "worrying drift" in Government focus threatens the growth, an industry organisation has claimed.
The Irish Tourism Industry Confederation (ITIC) said in its strategy report that revenue can grow by 65% by 2025 but it would depend on policies being implemented by Government, agencies and industry.
Newly-elected ITIC chair Ruth Andrews said the regions would be the biggest loser if tourism did not meet its potential growth targets, but that there was currently "a lack of Government ambition for tourism and a worrying drift in focus and attention".
"We are fearful that a hard Brexit coupled with the Vat hike in the last budget will cost Irish tourism close to €1bn. We’re at a key junction in Irish tourism and the Government must take a lead to help restore Irish tourism’s competitiveness at this uncertain time," Ms Andrews said.
The rise in Vat from 9% to 13.5% in the Budget came despite intense lobbying from industry figures.
It was initially dropped to 9% during the height of the recession to boost hospitality and tourism but came under fire from critics who said it outlived its purpose.
Room prices have surpassed Celtic Tiger levels and the exchequer was missing out on almost €500m yearly from the tax incentive, according to Department of Finance figures.
A report by the Tax Strategy Group, made up of senior civil servants and the Department of Finance, said “foregone tax revenue arising from the 9% rate in 2017 was approximately €490m and €2.6bn cumulatively since its introduction”.
However, ITIC chief executive Eoghan O'Mara Walsh claimed the Vat restoration had "seriously weakened" competitiveness with Brexit looming, and would disproportionately affect SMEs.
He said although tourism was at a record high, 2019 would be tougher than anticipated with hotel occupancy in decline for the year to date.
Brexit is already having a material impact with Britain, our biggest market, down 3% in March. British visitors have the best seasonal and regional spread, so this will inevitably affect the region’s most," he said.
Some €200m is being invested in new hotels and extensions in Cork that will see more than 1,300 new bedrooms, research by ITIC has shown.
