Tourism industry unveils plans to grow sector by 50% by the end of the decade

Tourism leaders have launched ambitious plans to grow the industry by 50 per cent between now and the end of the decade.

Vision 2030, produced by the Irish Tourism Industry Confederation (ITIC) envisages tourism revenues increasing from €10 billion to €15 billion while employing 350,000 people and providing €2.3 billion in exchequer revenue.

For that level of growth to happen in the sector, there is a need for a further 24 per cent growth in both domestic and international visitors.

This would involve up to seven million seats on air and sea transport and 14,000 additional tourist accommodation rooms.

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Vision 2030 said the sector lost €12 billion during the pandemic of which €6 billion was restored by the Government and it will be 2025 or 2026 before visitor numbers reach 2019 levels.

The primary constraint on achieving those goals was the lack of guest accommodation.

It stated that 20 per cent of the country’s tourism accommodation is currently being allocated to refugees and is “not sustainable”.

Speaking at the launch of the document in at the ITIC conference in Athlone on Monday, the Minister for Tourism Catherine Martin said the real figure was 13 per cent which are currently occupied by Ukrainian refugees nationally.

She had requested from Fáilte Ireland a report on the knock-on effects from having so many hotel rooms given over to refugees.

She acknowledged that in many places along the western seaboard, the number of Ukrainian refugees staying in hotel accommodation is much higher than that figure.

“We have to think outside the box about that. We have to source alternative accommodate. At all times we should never forget that we are a nation that fled awful circumstances and went to other countries abroad,” she said.

She ruled out doing a U-turn on the Government’s decision to restore the 13.5 per cent VAT rate on hospitality.

There was dismay within the hospitality industry when this month the Government restored VAT from the temporary rate of 9 per cent back to the pre-pandemic rate of 13.5 per cent.

Ms Martin said the Minister for Finance Michael McGrath had made it clear that the reduction in the rate was seen as a Covid-19 support that was lifted once the pandemic ended.

The hospitality sector, which includes hotels, B&Bs and restaurant, argued that the timing of the restoration of the VAT rate was wrong with so many businesses under pressure from inflation.

Ms Martin responded by stating that the VAT cut cost the exchequer €1.2 billion.

“I advocated right throughout the Covid pandemic, that it remain at 9 per cent, but the Minister for Finance Mr McGrath was quite clear that he had made the decision it was coming back,” she believed.

When it was suggested that it would be consumers who would ultimately pay the cost, she responded: “We have to look at other supports that this industry needs. The cost for running businesses has gone through the roof and that’s where we are not now. The Minister for Finance was clear that he was not going to [retain the VAT rate].”

She said the Government was discussing the possibility of splitting the VAT rate with accommodation providers paying a different rate to restaurateurs, but this was a very complex arrangement.

Vision 2030 stated that the increase in VAT will now make Irish accommodation costs the third highest in Europe and lead to a further loss in competitiveness.