Strong Government Support for Tourism

This week the Minister for Finance presented his jobs initiative as promised in the programme for Government, and it is especially supportive of the Tourism industry, with many initiatives which will add vigour to the recovery which is getting underway. As the Economics editor of the Irish Times, Dan O’Brien puts it;

The focus on tourism is spot on. There are few more job-rich industries and the potential to bring in more visitors is very high- much higher numbers of in-bound tourists in the past shows that the challenge is about recovering lost ground, not breaking new ground. The decision to target VAT cuts on tourism related goods and services was far more sensible than the programme for Government commitment to give a small cut across the board. Other measures such as scrapping the dunderhead air travel tax and targeting PRSI cuts on the lower rate, were on the money too.

The introduction of a simpler visa process for visitors entering the UK and wishing to visit Ireland is particularly welcome, as this has been a significant barrier to developing business from some of the new emerging markets. This measure will encourage tourists visiting the UK to be able to visit Ireland for 3 days without the cost or hassle of applying for a separate visa.

The reduction in VAT to 9% for tourist industry services will be introduced from July 1st and this is especially helpful as it will allow for the introduction of more better- value- offers to be made available to the consumer at home and abroad.

When combined with the lower rate of PRSI on low earners this will act as an important incentive toward employment retention and new job creation.

The proposal to abolish the airport departure tax together with significant rebates of passenger charges by Dublin, Cork and Shannon airports for extra passengers brought in, is a very meaningful incentive for carriers to add new capacity or new routes which should lead to accelerated restoration of passenger growth through these airports.

Many of the new measures were called for in ITIC ‘s report earlier this year, Tourism Opportunity-Driving Economic Renewal, and it is very encouraging to see that Minister Varadker has convinced his Cabinet colleagues that the industry has indeed the potential to maintain its existing 180,000 jobs and to add a further 21,000 by the end of 2015, at which stage, given the kind of initiatives contained in the Government’s jobs programme Irish tourism can have recovered to its peak 2007 levels.

To read the full section which pertains just to tourism, CLICK HERE for the extract from the Minister’s speech.

(Leo Varadkar – Minister for Transport, Tourism & Sport)

Early days, but a really good start by Minister Varadkar and the Government in recognising the very real potential which tourism presents to drive economic renewal throughout the country.

12 May 2011

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