The main lobbying group representing the tourism industry has accused the Government of not “matching the industry’s ambitions” and called on the State to do more to support the sector.
The Irish Tourism Industry Confederation (ITIC), the industry's umbrella group, warned that "sustaining success in the Irish tourism sector in 2019 will be a challenge" due to the risks from Brexit, Vat rate hikes and higher costs.
The year just gone was a record one for Irish tourism, with €6.9 billion earned from overseas tourism, while the sector now employs about 270,000 people.
However, Maurice Pratt, ITIC's chairman and a former C&C and Quinnsworth executive, said its growth would be maintained "only if the right strategies and investment policies are pursued".
“The Government must match the industry’s ambitions for the sector. Funding for the sector has only now barely returned to 2008 levels and it is vital that competitiveness is supported,” he said.
“Tourism is the only sector that can provide proper long-term regional balance and deliver jobs and economic growth to all parts of the country.”
Growth threatened
ITIC predicted that the value of the sector next year could grow by up to 8 per cent, which would be in line with a strategy to 2025 produced by the confederation last March. It warned, however, that its growth could be threatened by Brexit and it lamented that a “key enabling factor” of the industry’s success - its special 9 per cent Vat rate, which was raised in the Budget to 13.5 per cent - had been removed.
“The decision by the Government to increase tourism VAT rate by 50 per cent on January 1st imposes a €466 million tax on the sector next year. This is at the worst possible time with Brexit looming and tourism’s competitiveness diminished and ITIC repeats its call for this VAT hike to be deferred,” said the confederation’s chief executive, Eoghan O’Mara Walsh.
Negotiated settlement
ITIC has estimated that a so-called hard Brexit, where Britain exits the European Union without a negotiated settlement could cost Irish tourism €390 million "in the immediate aftermath".
In its review of the year, the confederation highlighted that spend by overseas tourists to Ireland was up by 7 per cent in 2018, with a further 25,000 jobs created. It estimated that the sector earned about €2.1 billion for the exchequer in direct taxes.
