New leader, same old problems? by Cyril McAree

Saturday, May 04, 2024. 10:57am
New leader, same old problems? by Cyril McAree

New leader, same old problems?

So, we have a new broom in government. With less than 10 months for the current incumbents to run their course, there were few surprises in the hiccup that represented a cabinet reshuffle. Whilst the government rebooted itself, the economy (and hospitality in particular) continued to grapple with complexities facing the sector. Concern reigns over the ever-increasing restaurant closures and rising costs in doing business, despite continued reassurances from government of support that has yet to be seen.

Insurance is now the latest pitfall to set the alarm bells ringing. While insurance companies record eye watering profits, equally eye watering is the cost facing hotels, restaurants and guesthouses that enable them continue in business. This adds further stress and increased costs to businesses and consumers. The industry can’t continue to absorb these increases without passing them on. This then impacts on competitiveness and may result in a loss of business. The lack of bed stock due to the immigrant crisis has severely impacted on the competitive aspect of the industry, along with energy and rising food costs, thus creating a near perfect storm. The Airbnb fiasco that the government appears incapable of challenging or addressing, adds to these woes.

Complete properties are being used for short term lets without, it would appear, correct planning. At the same time, these hosts have been able to earn vast sums of money with little or no enforcement of the supposed regulations currently on the statue books. Such properties should be registered for short term lets, and have the proper planning regulations applied, as is the case for hotels, guesthouses, etc., but this doesn’t appear to be the case for the Airbnb fraternity. Airbnb also do not contribute in funding terms to local authorities and marketing bodies who bring and support tourism in the regions they profit from.

This situation is also creating the reduced availability of rentable housing stock, which then contributes to employees in every rural town finding it difficult to secure a rented property and thus being unable able to work in the local hotels and restaurants. This exacerbates the challenge for businesses to offer value for money due to the understandable wage demands of employees trying to rent at exorbitant charges. The government had no problem reintroducing the 13.5%, VAT rate, but seems incapable of challenging the Airbnb debacle. Other European countries have reacted more speedily and with verifiable results. Another interesting fact was the recent Crowe report which helps demystify the inaccurate and often reported hype around hotel prices. It shows in real terms that prices are very much in line with competitor markets and the old adage of supply and demand is the rational for the oft misrepresented information and scare mongering.   

The recent Fáilte Ireland report on the Wild Atlantic Way shows in stark terms the reality of what organised and funded tourism delivers. The report shows that in excess of €3 billion in revenue is derived from tourism per year in this region alone. 35,000 jobs have resulted as a consequence of the Wild Atlantic Way, adding to a combined employment figure in the region of over 120,000 jobs.

Then you look at how our tourism minister treated the last IHF employee awards recipients and all you can do is despair. While unable to attend herself, due to the RTE Primetime debacle, no one from government was sent to present these awards. 

Maybe it is time that the industry reminded TDs and MEPs that they have a vote. 

Cyril McAree      

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