HOTELIERS CALL FOR DECISIVE ACTION TO SUPPORT TOURISM
Hotel and guesthouse owners across the country today called on candidates in the general election to commit to decisive action in support of the continued growth of Irish tourism. Michael Lennon, President of the Irish Hotels Federation (IHF) said that, while tourism had returned to growth in recent years, the recovery has not been evenly spread across the country. Citing the CSO’s overseas visitor numbers for 2019, which were released today, he warned that continued growth cannot be taken for granted with regional tourism most likely to be negatively affected. The figures show a significant fall off in growth with an increase of just 1.8% in 2019, as against 6.9% in 2018, compared to the previous year.
Commenting on the launch of the IHF’s national tourism policy document for the general election – A Strategy for Job Creation and Economic Growth – Mr Lennon said that tourism has been one of the great success stories of the economy in recent years, supporting over 260,000 jobs in every town and county and generating €2 billion in taxes for the exchequer each year. “However, our industry now faces heightened uncertainty and remains vulnerable to external shocks, given our exposure to the economic environment of our major sourced markets, as Brexit clearly demonstrated. Decisive action is needed now to ensure our industry lives up to its full potential as a major engine for growth and job creation across the entire country over the next five years.”
The IHF’s five-point plan calls on the next Government to support tourism by addressing a number of key challenges, including:
Tackling the high cost of doing business
More supports for regional tourism
Increased tourism marketing support
Additional investment in tourism product and infrastructure
Investment in people, skills and training
As one of Ireland’s largest indigenous industries, tourism plays a vital role in the country’s economic well-being. Mr Lennon said that the effectiveness of tourism growth in spreading employment opportunities and prosperity across the entire country is sometimes lost in discussions about the economy. “With 70 per cent of tourism jobs based outside of Dublin, tourism’s wide geographic distribution is critical to sustaining regional economies, and addressing the rural imbalance. Irish tourism has created over 90,000 new jobs since 2011. Accounting for almost 4% of GNP, tourism generates over €9.4 million in taxes each year – thereby supporting the local economies of every village, town and county.”
Mr Lennon highlighted the high cost of doing business in Ireland, particularly around insurance and Government controlled costs such as local authority rates, water and energy levies. He also called for greater supports for regional tourism to counter the impact of Brexit. Significant additional investment is also required to support tourism marketing and product development.
“Tourism represents an excellent investment for the country and it’s therefore vital that it remains at the heart of Ireland’s economic policy. We’re calling on candidates in the general election to commit to a range of pro-tourism policies that will help to sustain the growth of tourism and the significant contribution that it makes to the economy,” said Mr Lennon.
IHF FIVE POINT PLAN:
1. Tackle the high cost of doing business
The international tourism market is exceptionally competitive and every tourism euro spent in Ireland is hard won. As such, the high cost of doing business in Ireland remains one of the most pressing issues faced by tourism businesses such as hotels.
A focused approach on cost competitiveness is required, including:
restoration of the 9% tourism VAT rate, one of the most successful job creation initiatives in modern times;
greater urgency on insurance reform and establishment of a Garda Insurance Fraud Unit;
shake-up of local government funding to achieve a fairer distribution of rates burden;
defer the CRU’s decision for a hike in Irish Water’s cost allocation to businesses.
2. More supports for regional tourism
It is essential that the country’s economic policy is more attuned to the realities facing businesses in the regions, particularly with recent developments around Brexit. Additional capital and marketing funding must be allocated to projects designed to achieve better regional spread of visitors and tourism activity. Tourism growth is one of the most effective ways to spread employment opportunities and prosperity across the entire country. Its wide geographic distribution is critical to sustaining regional economies.
3. Increased tourism marketing support
Irish tourism has been an excellent investment for the country and must be nurtured if it is to continue to deliver returns for the economy. Every euro spent in overseas tourism marketing by the state generates approximately €130 in overseas visitor expenditure. Since the economic downturn, however, the funding allocation for tourism marketing and product development has been cut back substantially.
Two particularly pressing strategic marketing challenges are the need to attract more visitors to the regions and to extend the tourism season. Reduced marketing budgets are having a negative effect on the tourism potential of the regions with many rural tourism businesses continuing to lag behind. This is further compounded by the disproportionate negative impact that seasonality has on regional tourism.
4. Additional investment in Ireland’s tourism product and infrastructure
A significant increase is required in tourism-related capital expenditure over the next five years to ensure sustained growth. We are an island destination and face unique challenges in relation to access and competitiveness. It is therefore vital that sufficient resources are allocated to tourism development in order to deliver sustainable, long-term growth that continues to benefit the local economies and the communities in which tourism businesses operate.
5. Investment in people, skills and training
Hotels in particular are among the largest employers in the tourism sector, supporting over 60,000 jobs and investing up to 40% of turnover in payroll each year. These jobs are of enormous importance to many areas of the country that have an otherwise weak economic base.
In addition to job openings for experienced employees, hospitality and tourism businesses around the country recruit over 6,000 entry-level employees annually across all areas of their operations. Given the growing requirement for suitably skilled and qualified employees, training and education is a key priority. While we have made considerable progress in developing varied career paths for employees that promote professional development, greater Government supports are required for vocational and craft level training.