Tourism: the economic lifeblood of regional Ireland
Ireland’s tourism industry – the country’s largest indigenous industry and biggest regional employer – needs to be front and centre of the new Programme for Government that is being negotiated. Irish tourism employed 265,000 people last year and was worth over €9 billion with over €2 billion returned to the exchequer in direct tourism related taxes. Yet Covid-19 has decimated the industry swiftly and mercilessly. The Irish Tourism Industry Confederation (ITIC), the representative body for key public and private stakeholders, has issued a 3 step plan for tourism’s recovery based around Business Survival, Liquidity Measures and Demand Stimulation. The Programme for Government, and the associated National Recovery Plan, currently being negotiated by Fianna Fáil, Fine Gael, smaller parties and independents must have a suite of measures to support and sustain Ireland’s tourism industry.
First and foremost a public health issue, Covid-19 poses massive economic and business implications and Ireland’s tourism and hospitality industry has been hit quickest and hardest. Tourism is the very definition of the free and unfettered movement of people and the consequences of Covid-19 has caused immediate business hardship and risks leaving long-term fatal damage to an industry that provides employment and livelihoods nationwide. Carriers, hotels and accommodation providers, restaurants, attractions, hospitality businesses, tour operators, adventure and activity firms, and transport providers are facing a bleak year with an empty pipeline and order book.
The only way of minimising job losses and business closures is immediate and ambitious Government intervention over a 5 year period to protect the industry from the ravaging effects of Covid-19.
9 Tourism Pillars for next Government
ITIC has identified 9 key policies that need to be part of the National Recovery Plan within a 5 year Programme for Government:
- Business Survival; an immediate €1 billion fund is required in business continuity grants for tourism and hospitality enterprises, during this period of closure and semi-closure for public-health reasons, to help them survive the Covid-19 impact.
- SME specific support must be provided for businesses that have seen their turnover significantly impacted by Covid-19, along with the extension of the wage subsidy scheme. Any state-imposed costs need to be waived including local authority rates and commercial water charges.
- Enhanced Liquidity Measures including state backed long-term low interest loans are needed to provide circa €500 million funding to the tourism and hospitality sector to enable as many businesses to reopen as possible once the pandemic crisis passes.
- Create a dedicated Department of Tourism headed by a Minister with significant economic clout and influence.
- Reduce the Vat rate for tourism services to 0% for the duration of the Covid-19 crisis and then permanently set at 9% once recovery has taken place, a rate comparable with the rest of the EU. A supportive business tax regime must also be put in place including favourable employer payroll rates.
- Exchequer funding increase for annual tourism services. Currently at €186 million per annum, principally to fund Fáilte Ireland and Tourism Ireland, this needs to be increased to €300 million to invest in industry supports, domestic marketing, international promotions, and product development.
- Develop an air access development fund to support and renew airline routes and capacity into Ireland.
- Domestic Market Stimulus Incentive; with the home market the only source of business this year a household staycation voucher to be redeemed against a home holiday should be activated to stimulate the domestic market.
- Initiate a Tripartite Tourism Recovery Taskforce – consisting of an equal partnership between Industry, Department, Agencies – under an independent Chairperson.
Survival requires intervention
Covid-19 will pass. Hopefully in 2020 or 2021 a vaccination will be developed and distributed widely. However the damage and carnage in its wake risks leaving permanent damage to Irish tourism. The country’s largest indigenous industry and biggest regional employer needs unprecedented Government intervention now if it is to survive this crisis. Tourism is critical to the social fabric of Irish society and is vital to the vibrancy of communities both rural and urban.
Irish tourism has proven time and again to be a creator of jobs, livelihoods and exchequer returns. And it can and will rise again but only if the incoming Government supports the industry at this critical time.