Last Friday in Killarney at the “Let’s Talk Tourism” conference Ruth Andrews, Chairperson of the Irish Tourism Industry Confederation (ITIC), gave a key note speech where she called on the Government to release some of the ‘no deal’ Brexit fund that has been set aside for tourism. The conference, moderated by Olivia O’Leary, had a number of speakers including Minister of State for Tourism & Sport Brendan Griffin, Jane Stacey of the OECD, and Conor Pope of the Irish Times.
The theme of the conference was Sustainable Tourism and ITIC’s Chairperson identified how critical this is to Ireland’s tourism industry. Ruth’s speech also focussed on how 2019 had been challenging for Irish tourism because of Brexit, the Vat hike and increased costs of business including insurance and rates. Ruth argued that Budget 2020 had been a disappointment for Ireland’s tourism industry with no competitiveness enhancing measures for business and crucially no current budget increase for tourism. The extra allocation announced in Budget 2020 for the tourism sector is solely predicated on a ‘no deal’ Brexit outcome and Ruth argued that this should be part released to help the sector contend with the significant Brexit difficulties it is already confronting. The full transcript of Ruth’s speech can be read below:
“Thank you for the invite to be here today in wonderful Killarney, the beating heart of Irish Tourism and the Let’s Talk Tourism conference – a timely forum to review the year just gone, identify opportunities and challenges for the year ahead, and crucially to take stock of whether industry is doing all it can, and being enabled to do all it can, to reach its full potential.
For those who don’t know me I’m Ruth Andrews, Chairperson of the Irish Tourism Industry Confederation (ITIC) which is the umbrella group of Irish tourism including the leading private and public sector stakeholders within the sector. And we must never forget – or tire of repeating or be shy about stating – that this industry is the largest indigenous industry in Ireland, heavily reliant on export earnings, with 20,000 plus businesses in every town, village, city and rural area the length and breadth of this country delivering jobs, exchequer returns and economic activity that sustains regional communities where, along with farming, we are the primary show in town.
When inviting me to speak Margaret and Ciara asked me to look ahead and see what the future might hold. Oh to have such powers – if I did I would have printed the tourism almanac, taken this time to sell copies and would be retiring on the proceeds! With Brexit in whatever shape still to be crystallised and impending UK and US elections it’s difficult with any degree of certainty to say where we’ll be when this conference comes around next year let alone beyond that.
However, I am happy to try but before I do we need to briefly look at where we are as an industry at the moment. In that context make no mistake about it but 2019 has been a tough year. CSO data shows that expenditure by overseas tourists is down across all main markets with the exception of North America. The crucial domestic market has also been soft for business although we still wait on official data to confirm this.
Brexit, and its impact, is now being felt much farther afield than GB and here, as our European business performance has demonstrated this year. Brexit uncertainty, the Vat hike and weakened competitiveness have all made trading conditions that bit more challenging for industry in 2019. This year will likely see the first decline in Ireland’s tourism economy in 8 years.
Brexit is not going away and even if and when a British Government gets consensus on a withdrawal agreement remember that’s only the start – the real horse trading then begins and there’ll be a realisation of the costs of doing business with the UK as a 3rd nation. If the length of time it took to get hurdle one cleared is anything to go by the world will still be talking about Brexit for at least the next five years and regrettably it’s all negative noise to which Ireland is inextricably linked.
Therefore, now more than ever we need strong unambiguous collaboration between our tourism agencies so that the needs of the industry they support and serve are met. Industry spend supported by Government through our agencies has to ensure that we get best bang for every euro, buck and pound we invest.
Budget 2020 – a missed opportunity
Paschal Donohoe’s budget last month was an opportunity to steady the tourism ship. Regrettably this was an opportunity that was passed up.
Minister Griffin I want to take this opportunity to say that we in ITIC, along with our member colleagues, are grateful to you and your Department officials for your endeavours and fighting for tourism’s slice of pie. We know it was a budget set in the context of Brexit and that you made a strong case to Finance and Minister Donohoe – for that we must acknowledge your commitment and determination. As a native of the home of Irish Tourism, we know that no one understands the industry you represent better and we will continue to work with you and officials to drive home that Tourism Matters as much as other sectors that received increased capital. The €7 million boost secured for the last couple of months of this year is very welcome and will provide much needed re-assurance campaigns in the context of Brexit.
But by the same token it has to be said that we cannot take solace in Government spin. This was a disappointing budget for Irish tourism. Yes, tourism was acknowledged – alongside agriculture and enterprise – as being a very vulnerable sector that will be hit severely by a hard Brexit. This is welcome and overdue and slowly but surely the tourism sector is being given proper recognition as a key component of the national economic debate. However, the extra money earmarked in 2020 for tourism is exclusively predicated on a “no deal” Brexit outcome. Any deal, or indeed extension of Brexit, means that not a penny more is to be committed to current tourism budgets next year compared to this year.
Furthermore Budget 2020 did very little to improve competitiveness measures. For example, Irish tourism still pays a considerably higher Vat rate than 27 other EU countries and there was no action on insurance reform, a cost that is crippling many businesses.
The positive spin after Budget 2020 related to the fact that tourism was allocated €40 million additional funds should a no-deal Brexit come about. This is evidentially welcome although all of us hope that some sort of a deal is cobbled together and passes through Westminster. However yet again with Brexit, there is no certainty nor clarity of where the process is going other than “flextension” is a new dictionary word and we must all hold our breaths for January 31st. In the meantime during this vital period of holiday planning, Brexit continues to cause massive damage in our core markets which will most likely contribute yet again to the consumer pushing out their decision to visit Ireland in 2020.
According to Fáilte Ireland a no deal hard Brexit would mean a €500 million hammer-blow for the Irish tourism industry which puts the €40 million from the exchequer in perspective. Is it not time for the Government to now recognise the ongoing damage and implications and release some of the earmarked €40 million to stimulate demand in overseas markets in Q1 to support industry and regional jobs?
So looking ahead, with a softening market and an unsupportive Budget, 2020 could again be a challenging year for Irish tourism. North America should continue to perform well spearheaded by Aer Lingus and IAG’s strategy of connecting the US and Canada to Europe via the hub of Dublin Airport thereby creating new routes which deliver direct air access. However other markets are likely to be soft – Britain has its unique set of self-enforced difficulties while the European economy looks likely to have one of its cyclical wobbles. Long haul Asian markets, of which there was much excitement, have so far failed to deliver on their potential as evidenced by Hainan Airlines and Cathay Pacific cancelling their direct services from Beijing and Hong Kong.
Thus we are facing a key period for Irish tourism and choppier waters ahead.
At all times the tourism industry should not be shy about how much it is a net contributor to the national finances. Tourism and hospitality businesses are spending €2.5 billion of their own money over the next 3 years in new tourism product and infrastructure and it employs 270,000 nationally. No other industry can provide the regional economic balance that tourism does. Check out Center Parcs and their impact on Longford or, closer to home, the 1 in 6 jobs that are provided by tourism in the Kingdom of Kerry.
Despite a more challenging period ITIC is of the view that over the medium-term we can be confident about our sector and its growth prospects. An 8-year industry strategic roadmap for the sector was published by ITIC in 2017 and we predicted increased overseas earnings and significant jobs growth come 2025. Industry has proven it is putting its money where its mouth is and is investing heavily in its own future. Crucially though the right enabling factors must be in place and pro-tourism, competitive-enhancing, business-friendly policies must be adopted by this Government and its successors.
And talking about pro-tourism Government policies the last significant initiatives were back around 2012 with the removal of the airport departure tax, the reduction of the Vat rate, and the Gathering. Look at the growth since then but that’s now nearly 8 years without a new bold Government initiative on tourism. ITIC urges the Government to be proactive – a start would be releasing some of the €40 million ‘no deal’ money now to support tourism during these more turbulent times.
A self-aware industry
It is vital that we as an industry remain self-aware, acknowledge any weaknesses and constantly innovate and improve. Holding a mirror up to our sector to see the wrinkles and defects is important. Too often in the past we may have been too quick to accept the high satisfaction levels of tourists as reported in surveys conducted by Fáilte Ireland. It’s a competitive world out there and never has there been so much choice for the consumer. Other countries are adopting their own dynamic strategies; Scotland is stealing a march in terms of environmental sustainability and their food offering and following our lead with the development of an industry strategy for the longer term, Australia is making a pitch for luxury tourism, New Zealand for wellness tourism. The point is that Ireland is not as unique as we like to think – we must stay on our toes and work hard to stay ahead of competitors.
Personally I have always been of the view that we have not done enough in the Republic of Ireland to develop “game-changing” tourism experiences. Look at what the Titanic Centre did for Belfast or the Guggenheim did for Bilbao. Why aren’t we thinking of big, bold products such as that? Things of scale and international appeal. The Brennan brothers of this parish had a concept for a large and experiential “Centre for Irish Contemporary Culture” in Kenmare. Or what about a coast to coast greenway from Dublin across the Midlands to the Wild Atlantic Way, something that might match the appeal of the Camino? Or a spectacular glass ledge cliff walk-way along the Western seaboard so that visitors could experience the Atlantic edge of Europe? Or how about an Irish version of the Eden Project in our natural boglands showcasing environmental credibility and sustainability? Such ideas are costly and would require significant public as well as private investment but they are the type of innovative, transformative projects that could bring Irish tourism to a new level. The question might be asked what will Government have supported in the coming decade that the generations of the next will want to visit, explore and learn from?
And talking about the likes of an Irish Eden Project as an industry we have no choice but to take climate change very seriously. It’s a game changer for us all and for our industry. Responsible Tourism has to be a key feature of our future.
We must as an industry look at our businesses and ask ourselves what and how can we show our customers that we do care and that we are doing more than paying lip-service to such an existential issue. UN Sustainability Goals do matter. The tourist must have confidence that they can holiday here sustainably and that we take green, a colour the Irish own, seriously and not just on St Patrick’s Day. We are an island nation – they can’t all come here by wind generated boats – we will always need air access so we will have to work even harder as a nation and as an industry to lead and embrace change so that our carbon footprint is minimised.
We need to take a carrot and not just a stick approach, work with and within our communities to drive initiatives. Killarney has good examples of this with the groups of you who go into the national park week after week to address the rhododendron issue. Just as the Government put jobs at the heart of every policy initiative in our last recession, we as an industry now need to put climate change as the heart of all that we do in our businesses. Some initiatives will drive cost savings, others may cost more but for longer term benefit.
One thing is for sure: the more we as an industry share knowledge in this area the smarter and better we will all be and our customers will value it.
Thank you for your time today. Thanks again for the opportunity to speak with you and sharing ideas and airing challenges is the best way that we as a tourism industry can grow together.“