Tourism industry is vital to the economy
Sir, – Patricia King’s letter criticising Ireland’s tourism industry (August 16th) is ill-informed and ill-judged. Rather than refer to Cantillon’s “anecdotal evidence”, she could have looked at latest CSO data which shows that tourism expenditure is down 4 per cent, with all markets in retreat, bar North America. The recent news that airlines Norwegian and Hainan are ceasing their US and Chinese routes respectively is another tough blow.
The blasé view of the impact of Brexit will be hard to stomach for the 20,000 tourism and hospitality businesses – most of which are small and medium-sized enterprises – up and down the country. Britain is Ireland’s single largest source market, and weakened sterling and uncertainty around Brexit have dampened business considerably from our nearest neighbour.
Fáilte Ireland, the State tourism agency, has estimated that a hard Brexit will cost Irish tourism €390 million.
Patricia King is correct that the Irish Congress of Trade Unions was to the fore in campaigning for the VAT rise brought in for the tourism sector on January 1st. At the time the Irish Tourism Industry Confederation warned that this policy change would hurt Irish tourism and damage our competitiveness. Regrettably we have been proved right. Ireland now has a higher tourism VAT rate than 27 European countries, and the Department of Finance has estimated that the VAT increase is an additional tax burden of €466 million on the tourism industry this year. Add this to the cost of a hard Brexit and you are getting close to a billion-euro wallop to Irish tourism.
Tourism is Ireland’s largest indigenous industry and biggest regional employer and must be respected as such. It can provide employment in parts of Ireland that other sectors simply can’t reach – look at Center Parcs in Longford as a prime example. As uncomfortable as it may be for ICTU to acknowledge, 90,000 tourism jobs were created during the period of the lower VAT rate. The sector is a massive net contributor to Ireland, bringing in over €2 billion to the Irish exchequer in direct tourism-related taxes last year.
With the budget just eight weeks away, now is the time to underpin Irish tourism, review the VAT rate to keep Ireland in line with competitors, and invest strategically in a productive labour-intensive sector.
Rather than bash an industry that is facing a more challenging period, ICTU should recognise how important it is to the national economy, regional Ireland, and hundreds of thousands of families. – Yours, etc,
Sandyford Office Park,