Dec / Jan 2010 - Editors notes
The year 2009 has passed but won’t be forgotten for a number of reasons. Firstly, it brought about a series of events that rocked this country to the core. The year seemed to reel from one crisis to the next. The upshot? We are now left with an economy and industry that, to use boxing parlance, is on the ropes. The 2009 budget was rolled out and few escaped its onslaught. Tourism, however, fared better than most. Whilst the reduction in excise charges and the nominal VAT reduction are welcomed, there is a lot of scope to improve these areas and all concerned should continue to press for further change. The agencies charged with looking after the sector seem to have been heard and responded to.
The increase in funding, though must, be used prudently and not squandered. One major cause of concern is the establishment of NAMA. There are mixed views of how it will work and help stabilise the situation. A number of hoteliers are of the opinion that much of the race to the bottom has been caused by banks, willing to undermine the sector by propping up unsustainable properties to the detriment of existing stock. It seems that NAMA’s role is solely to benefit and placate shareholders and not for the good of business.
That said, the industry will not go down without a fight. The banks must support them in real terms, and not just with sound bites on radio, TV and cleverly worded press releases and gimmicky adverts. Give the industry what it needs, money, and credit terms that are realistic. After all, most of this mess begins and ends at their respective doors: irresponsible and uncontrollable lending to business that had no hope of survival. The recent Tourism Ireland launch gave a sombre view of how the sector has performed and it is not pretty: a 12% decrease in numbers says it all. Revenue is down and recovery will be tough. That said, there are signs that some economies are beginning to show growth and return to more stable situations. Some areas that must be addressed include local authority charges and wages. If the industry is to compete with our euro neighbours, a reduction in these areas is paramount. It’s ludicrous that someone in Kerry, for instance, is charged a different rate for water than their competitor in Cork or Dublin. In the case of wages, the minimum wage in the UK is £5.80 per hour for casual labour as against €8.65 in Ireland.
These anomalies should be fixed and harmonised. Indeed, Failte Ireland have indicated that they intend to work with the industry to get a resolution for the benefit of all concerned.