Anti-Tourism Policies are Damaging Industry
Successive Ministers for Tourism have been happy to remind us of the importance of tourism to the economy, and their views are echoed by everybody from the Taoiseach to local Councillors. Mary Hanafin is no exception, telling the Dail in a major speech on 22nd June that in 2009, ‘the tourism and hospitality sector represented almost 4% of GNP, provided up to 200,000 jobs, helped to generate €4 billion in foreign revenue earnings and generated in the order of €1.3 billion in tax earnings.’
She followed up, as have her predecessors, by spelling out how much money the Government invests in the tourism industry and the programmes which it delivers to develop the industry and promote Ireland as a visitor destination. What Tourism Ministers politicians do not talk about however, is a range of Government policies and practices which militate against the growth of tourism in Ireland and which place obstacles in the path of potential visitors. Certain Government policies and practices militate against the growth These begin even before some potential tourists initiate the process of booking an Irish holiday. If you are from China or India, two of the world’s tourism markets with greatest potential for the future, you must undergo a rigorous visa application process which would deter all but the most enthusiastic travellers.
Earlier this year Gerry Mullins, chief executive of the Coach Tourism Transport Council explained that visitors from China, India and Russia, three of the biggest markets in the world, are discouraged from coming to Ireland because of the difficulties of the visa system, which involves providing six months of bank statements, plus marriage certificates, birth certificates and three consecutive pay slips, among other items. The system has been described by Brian O’Cathain, CEO of Petroceltic, who does a lot of business in China, as ‘incredibly torturous.’ Tourism Ireland agrees.
Its CEO Niall Gibbons accepts Gerry Mullins criticism of the system and has called for a joint tourist visa with the UK to allow tourists from outside the EU to have easier access to Ireland, describing it as ‘imperative’ for tourism growth. He said that Tourism Ireland has been lobbying the Department of Justice to operate a common visa system with the UK, along the lines of the system which applies among 25 Schengen Agreement countries in Europe. Under this arrangement a visa for one Schengen country is a visa for all. The UK issues millions of visas to Asian citizens every year, and Niall Gibbons says that if Ireland could get a ‘slice of the action it would be good for us, because those visitors stay for longer and they are good spenders and good travellers’.
Getting the Department of Justice to co-operate is likely to be difficult Getting the Department of Justice to co-operate is likely to be difficult however, given its exceptionally cautious approach to immigration. Only a strong Government policy, promulgated from the top (ie Brian Cowen) is likely to remove this serious barrier to tourism growth.
Those visitors who do not require a visa to holiday here (and it includes those from a long list of countries, including all our major markets), encounter their next obstacle when they arrive at the airport. The Government’s Air Travel Tax, introduced in 2009 has been roundly condemned by tourism interests as being ‘anti-tourist’ and a barrier to those who might be considering a holiday here. Airline analysts, anna.aero, recently blamed the tax for Dublin emerging as the worst airport in Europe in an analysis of seat capacity. It said that for the summer 2010 season airline seat capacity in Europe rose by almost 5% but capacity in Dublin is expected to fall by 9%, making it the worst performer among the 20 European airports surveyed.
Bloxham stockbrokers’ analyst, Joe Gill, estimates the tax could cost the economy around €450 million a year as tourists will stop coming to Ireland Michael O’Leary of Ryanair has led the opposition to the tax and claims that it is a prime reason why his airline is cutting back on services into Ireland. That may or may not be true (you never know with the mouthy Michael), but if its removal resulted in Ryanair basing more aircraft at Shannon, Cork and Dublin, then the benefits in terms of increased visitor numbers could well balance any loss of revenue involved. In any event the Air Travel Tax is not producing the revenue which the Government anticipated. Only €9m. was collected in June this year (compared to €11.5m. in June ‘09) are there is no prospect that it will generate the modest €125m. per annum which the Government is budgeting.
Even Tourism Minister Mary Hanafin has reservations. In a comment on the tax she recently told the Dail that ‘as Minister with responsibility for Tourism, I would obviously be concerned about anything that might lead to a significant reduction in visitor numbers and since taking up my new office, I have been meeting a number of airlines to discuss their research and views on this issue in advance of the 2011 Budgetary process.’ Ultimately a decision on this regressive tax will be taken by Finance Minister Brian Lenihan and it can only be hoped that he does not persist with measure which is clearly anti-tourist. Range of taxes which militate against the growth of tourism In preparing his next Budget Minister Lenihan could also look at a range of taxes which militate against the growth of tourism. Research conducted by Failte Ireland, ITIC and others clearly shows that while visitors are content with the cost of travel to Ireland and accommodation when they get here, they perceive us to be an expensive destination because of the cost of eating out, drinking in pubs and driving a car.
Government policy in the shape of excise duties and VAT make a major contribution to these costs. Despite some alleviation in the 2009 Budget, we continue to impose taxes on alcohol, tobacco and petrol which are among the highest in Europe. The Government has a point of course, when it argues that these taxes are needed to pay for the running of the country, the reduction of our massive budgetary deficit and to pay our horrendous annual interest bill. Is it equitable or even sensible however to ask visitors, on whom we heavily depend for overseas revenue, to contribute to our domestic running costs? Exempting them from all or part of these taxes would certainly provide a very strong incentive to visit Ireland. It might be difficult to administer such schemes, but for a nation that devised a whole range of creative tax incentives for industry and property development, it should not be beyond our capability- if of course there was a Government will to do it. Other Government policies are anti-tourist in less obvious ways, but are nevertheless real. Cars offered for rent to visitors for instance carry higher rates of taxes and duties than in many competitor destinations and this is reflected in the rental charges. It also costs more now to travel around the country because of an increase in the number of road tolls. A recent ludicrous proposal to allow Local Authorities to toll single-carriageway national roads would add to this cost and further annoy visitors.
Motoring tourists, who are valuable because they visit less popular towns and villages, are also frustrated by poor signposting which is endemic throughout the country and also by the crazy provision of having directional signs in Gaeltacht areas only in Irish. It is almost that we want to ensure that visitors get lost and annoyed. These and other policies must however be seen in the context of a major commitment by successive governments to create a modern and efficient tourism industry. Serious investment in product enhancement, enterprise and personal training, improved roads and airports and railway rolling stock have eliminated many of the shortcomings which were a feature of the Irish tourism industry over the years.
All the more pity therefore that their effectiveness must be balanced against policies which militate against the attractiveness of Ireland as a visitor destination.
By Frank Corr