Put Tourism Back At Cabinet Table
Elaina Fitzgerald Kane, the newly elected President of the Irish Hotels Federation (IHF) today called on the next government to put the tourism industry at the heart of the country’s economic agenda when developing its programme for government. As one of Ireland’s largest indigenous industries, supporting over 260,000 jobs across every county, Ms Fitzgerald Kane said that a flourishing tourism industry is vital for the country’s prosperity and a major contributor to rural economies. However, she warned that the industry faces significant challenges in sustaining the strong growth of recent years, including from the coronavirus, and she said the time is right for a comprehensive review of the impact of the hike in the tourism VAT rate.
“As an island nation, we are vulnerable to external shocks, given our exposure to the economic environment of our major source markets. Brexit demonstrated that clearly with the substantial fall in UK visitors over the past three years. While it remains to be seen what impact the coronavirus will have on the global economy, we can expect to experience some reverberations here too. The economic consequences of threats such as these are largely outside our control so it is imperative that we mitigate the risks to Ireland’s economy where we do have some control.”
Ms Fitzgerald Kane stated that the increase in VAT from 9% to 13.5% has seriously undermined Irish tourism’s international competitiveness and the ability of tourism enterprises such as hotels to re-invest in their business and local economy. “Ireland is already a very high-cost economy by international standards, which adds to the challenges of an indigenous export industry and this is being made worse by the higher 13.5% VAT. We are now in a situation where we have a higher rate of tourism VAT than 28 European countries with which we compete.”
“Tourism has been one of the great success stories of Irish economy in recent years. However, the effectiveness of tourism growth in spreading employment opportunities and prosperity across the entire country is sometimes lost in discussions about the economy, including at the cabinet table. With 70 per cent of tourism jobs based outside of Dublin, tourism’s wide geographic distribution is critical to sustaining regional economies, and addressing rural imbalance. Irish tourism has created over 90,000 new jobs since 2011. It accounts for almost 4% of GNP, tourism generates over €9.2 billion in revenue each year – thereby supporting the local economies of every village, town and county.”
While tourism returned to growth in recent years, figures for 2019 show growth was flat, compared to a year on year increase of 6.5% in 2018. Ms Fitzgerald Kane said: “The significant slowdown in visitor growth last year, combined with the fall in UK visitor numbers, are worrying as they have a significant rural bias. A rate of 9% VAT is the appropriate level for Ireland and would put us mid-range in a European context. This is what the next Government should be looking at to ensure long-term sustainable growth of our industry and as a clear signal to rural Ireland that it matters as much as the cities.
Ms Fitzgerald Kane also called for extra funding for state tourism bodies, saying significant additional investment is required to support tourism marketing and product development, particularly for the regions. “Regrettably, since the economic downturn the funding allocation for tourism and product development has been cut back dramatically. We now have a situation where one state body can allocate a special €28 million economic stimulus package for the Border region[i], but Failte Ireland can only allocate €1m to the tourism sector in the same region, although tourism supports jobs in every town and county in the area.
“There is a need for more targeted assistance for regional tourism businesses vulnerable to Brexit especially for those border regions which have high dependency on the UK market. Time and again, tourism has proven itself to be an excellent investment for the country. For every euro spent on overseas marketing by the State, approximately €130 in overseas visitor expenditure is generated,” she said.
A second generation hotelier with almost 20 years’ experience in the hotel sector, Elaina Fitzgerald Kane becomes the 38th President of the IHF, succeeding Michael Lennon. The IHF is the leading representative tourism body in Ireland representing almost 1,000 hotels and guesthouses which employ over 60,000 people throughout the country.
Ms Fitzgerald Kane is Sales Director of the Fitzgerald’s Woodlands Hotel, a family-owned, four star hotel at Adare, Co Limerick. The 89 bedroom hotel, which currently employs 200 people, was established by her parents, Mary and Dick Fitzgerald in 1983. Mary Fitzgerald is a former President of the Irish Hotels Federation.
A graduate of the Shannon School of Hotel Management, UCG and UCD’s Smurfit Business School, Elaina has been an active member of the IHF for many years. She currently serves as a member of the Federation’s National Executive Council. Prior to her election, she was Vice-President of the IHF. She has also held the position of Chair of the Shannon branch of the Federation.