The Irish Times view on tourism in Ireland: Preparing for tougher times

It would be dangerous to think that an apparently robust sector is impervious to systemic shocks

Tourism Ireland’s publicity stunt  promoting “Earth’s Wild Atlantic Way” from space.

Tourism Ireland’s publicity stunt promoting “Earth’s Wild Atlantic Way” from space.

 

Irish tourism has never had it so good with record numbers coming into the State spending record amounts of money last year. But it would be wrong to assume that because things are positive now they will always be so and dangerous to think that an apparently robust sector, which is hugely important to the wider economy, is impervious to systemic shocks, be they internal or external.

As it stands, more than 300,000 people work in an area which generates in excess of €6 billion in revenue annually from 11 million tourists who help to swell the Exchequer’s coffers by €2 billion each year. The quality and variety of accommodation on offer is better than ever thanks to a significant injection of competitively priced rooms through the sharing economy. And food options have improved as skilled chefs have responded to consumer demand by insisting on better quality, locally sourced ingredients.

The range of activities available to visitors has widened and – despite the scepticism of locals – tourists still see value for money here. Even the weather played ball last year with weeks of unbroken sunshine over the summer months giving the island an unfamiliar sun-kissed air.

But there are clouds on the horizon – the most thunderous one being Brexit. Britain delivers more tourists than any other country and they spent €1.45 billion last year alone. But as sterling has weakened as the UK’s chaotic departure from the EU nears, Ireland has become more expensive for British tourists and the UK has become much cheaper for visitors from beyond its borders. The fear is that a no-deal Brexit will cost Ireland hundreds of millions in revenue and tens of thousands of jobs.

There is little the Government can do to avoid a hard Brexit but factors under its control also have the potential to impact negatively. The 4.5 per cent VAT increase for the hospitality sector is already driving prices higher while legislative changes aimed at limiting the accommodation available via the sharing economy, as outlined last year by housing minister Eoghan Murphy, will reduce availability and the choice available to visitors.

It is worth noting that the policy changes which have had most impact on the sector in recent months have emerged from outside the Department of Tourism. The Department of Housing was behind plans to restrict the amount of Airbnb accommodation available in Ireland and the Department of Finance was the instigator of the decision to restore the VAT rate to 13.5 per cent for the hospitality sector.

There are legitimate arguments for both decisions and it is too early to say what the outcome will be. However, as an industry that has seen us through hard times and may be needed to do so again, the voice of tourism must be heard too.

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