Latest predictions from ITIC suggest tourist numbers could be around 67% of 2019 figures, with a full recovery happening in or around 2026
The Irish Tourism Industry Confederation (ITIC) recently held a successful conference in Croke Park. ITIC includes stakeholders from Irish Hotels Federation, DAA, Irish Ferries, Aer Lingus, the Restaurant Association of Ireland, and numerous others working within tourism. The conference was run under the heading of “tourism sustainability”, a buzz word that is on trend at the moment. Latest predictions from ITIC suggest tourist numbers could be around 67% of 2019 figures, with a full recovery happening in or around 2026.
Eoghan O’Mara Walsh, CEO of ITIC, outlined some of challenges the industry now faces. He mentioned the labour shortage as a worrying scenario, coupled with rising inflation and the horrific Ukrainian war, which are all impacting the road to recovery.
During the conference, the impact of Covid was discussed and a lot of speakers referred to its effect and the resulting impact upon the sector. Apart from considerable revenue losses, a more critical loss was that of workers, many from very senior management positions. It is estimated that approximately €12 billion in revenue was lost during Covid, despite the substantial and welcomed government support. The combined impact has left the sector struggling and facing an extremely difficult challenge to find people to fill these vacancies. The country is deemed to be at full employment capacity, making the situation somewhat of a perfect storm. These supports are coming to an end and it will be interesting to see what impact this will have within the sector, particularly within restaurants. There are already signs that a number of restaurants are struggling with food inflation and it is becoming uneconomical to continue to trade. Whilst rural hotels seem to have fared better during this period, with domestic business having helped by way of staycations, Dublin was more severely impacted due to the impact on the corporate sector.
Professor Luke O’ Neill, during his interview, said he was happy with the government and the country’s response to the Covid crisis, and felt confident we are now in a good place regarding the virus. He mentioned that recent findings of a vaccine currently being tested by the US army were giving reasons for optimism for a long-term vaccine that would be a game changer. Hopefully these results will be known in a few weeks. He did, however, express a wish that pre-departure testing would soon be done away with by the US authorities.
The retention of the 9% VAT rate was very much to the fore with a number of speakers at the event, and is seen as a critical component in ensuring tourism continues to get this much needed support
Competitiveness and value for money are bedfellows that the industry must continually ensure are foremost on the agenda. One area that continually exercises the sector is that of taxation, be it excise duty, landing charge tax, or VAT. The retention of the 9% VAT rate was very much to the fore with a number of speakers at the event, and is seen as a critical component in ensuring tourism continues to get this much needed support. Unfortunately, the Minister of Finance had indicated at the implementation of the reduction, it would only be temporary, and would return to 13.5% in August.
Tourism Minister Catherine Martin stressed the importance that the sector must continue to be competitive and ensure value for money is top of the agenda.
During her address to the conference, the minister emphasised her continued commitment to support the sector and gave examples of the increased budgetary support the sector has received during her tenure, including increased marketing and Cap-ex support. She vowed to continue being vocal at the cabinet table and would press to retain the VAT rate at 9%. She did however preface this with the fact that the Minister of Finance, Paschal O’ Donohoe, would have the final say.
With inflation and Ukraine continuing to impact our fiscal situation these are factors outside the control of the government. The Minister stressed the importance that the sector must continue to be competitive and ensure value for money was top of the agenda.
To secure this lending, it would require the business to supply recognised and quantifiable reports to secure lending
The area of sustainability was acknowledged by numerous contributors, including Colin Hunt of the AIB. The bank will support businesses by way of a green lending policy. To secure this lending, it would require the business to supply recognised and quantifiable reports on their sustainability efforts. He acknowledged inflation and the labour crisis were a problem at the moment, but he was confident these could be resolved.
Wille Walsh, Director General of IATA, was critical of some of the restrictions imposed on airline travel. He acknowledged that the early measures were understandable, but subsequent restrictions did little to curtail the inevitable spread of the pandemic.
Are Lingus CEO Lynne Embleton was confident of a recovery in the future and was encouraged by what she described as a pent-up demand for travel. Her belief is that the summer could see demand return to 90% of pre-pandemic capacity.
During the conference, the Eileen O’Mara Walsh Tourism Industry Special Recognition Award for 2022 was presented posthumously to the late Eamonn McKeon who died in 2021. Eamonn was a past CEO of ITIC and held various roles within the tourism industry. His contribution to the industry helped shape the industry to what it is today and he was a tremendous support to all he met during his career. The award was presented to his family at the event.
The full ITIC report, Delivering a Sustainable Tourism Industry, can be viewed at www.itic.ie