Roller Coaster

Just when we thought things were beginning to stabilise, along comes the budget crisis in the US and more volatility in the Euro zone. This has the potential to scupper any of the movements made to get our economy back on track. Let's hope its short term and that common sense prevails with the bulls and bears of the financial world. I wouldn’t hold my breath.

On a more positive note, the recent findings in the High Court with regard to the JLC issue must be welcomed. It puts an end to the continual and endless debates about rights and wrongs of this payment structure and hopefully brings Ireland up to a level pitch with our Euro counterparts. The most important aspect of the findings is that it doesn’t effect current agreements already in place, and will leave the way open to employ people in future at a realistic market rate. Despite this ruling, Ireland is still a high cost place to conduct business. Aside from labour costs, other factors - including high primary costs for commercial rents, food, beverage and energy costs, as well as high excise duty on alcoholic beverages, and a decrease in demand as a result of the recession - are also impacting the competitiveness of the hospitality industry.

According to Eurostat, Ireland is the fifth most expensive country in the EU in terms of food costs, behind Denmark, Switzerland, Norway and Finland, with prices 25% above the European average. This is in line with research into the cost of food preparation commissioned by Fáilte Ireland, which also showed Ireland as having the highest excise duty on alcohol of all 27 EU countries. While wage costs in Ireland are also high, (despite the JLC ruling), social security and other labour costs paid by the employer are relatively low compared with countries such as Sweden, Belgium and France. According to Eurostat, Ireland is only the ninth most expensive country among the EU 27 in terms of average hourly labour costs.

Surprisingly, Irish gas prices are below the EU average, whereas electricity prices are the fifth most expensive with only Cyprus, Italy, Spain and Slovakia paying higher prices. But the concern is despite deregularisation it still is expensive to source electricity - the cost of oil continues to dictate energy costs across the board. A recent report by Tourism Ireland brings more reasons for optimism. We are still a much favoured destination with our established markets, but more importantly, emerging and new markets have indicated an eagerness to visit our shores. This has to be welcomed and shows a return from past investments, made in our overseas marketing budgets, despite utterances to the contrary by some observers within the industry.

The recent golf tournaments, held in Killarney and Meath, also reiterated the importance for continued investment in the golfing market. The crowds who attended both events were testament to the popularity of the game, both here at home and with overseas markets. Equally, the Dublin Horse Show brought in some welcomed monetary returns from continued savvy investment decisions given the attendance records for the four day event.

Stop Press:
Latest CSO figures just released as we go to press indicate substantial growth from UK and American markets along with other mainland European markets. Figures for the second quarter show an increase of 15% across all sectors, with the UK market recording a 7.7% increase, the US 16.6 %, Mainland Europe 21% and equally encouraging is the 20% increase from Australia and developing markets.

Cyril McAree

EDITOR