Tourism ‘not a priority’ for Government, say industry chiefs

The budget showed that tourism was not a priority for Government, industry chiefs have said in a hard-hitting letter to Minister for Tourism Catherine Martin.

Government ended the special 9 per cent VAT rate that benefited hospitality at the end of August, while official figures say the Republic is luring 40 per cent fewer holidaymakers than in 2019, the year before the Covid-19 pandemic closed down travel.

Tourism received just one mention during the two ministers’ budget speeches last week, industry chiefs say in a letter to Government seen by The Irish Times.

This shows the sector “is not a priority” for Government, “despite supporting 13 per cent of all Irish livelihoods, more than in agriculture and construction combined”, they say in a letter to Ms Martin .

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“Since the pandemic retreated there has been a strong sense of feeling within the industry that tourism concerns have been downgraded, which is ironic given that our beloved tourism sector is lagging in terms of recovery,” it adds.

The letter, from the Irish Tourism Industry Confederation’s (ITIC) chairwoman Elaina Fitzgerald Kane and its chief executive Eoghan O’Mara Walsh, seeks an urgent meeting with Ms Martin to discuss the budget’s poor treatment of the sector.

“Put simply, Ireland’s tourism industry this year will have seen a tax hike and next year will see a spending cut,” they say. “That presents enormous difficulties to an industry still only on the recovery path and facing significant business challenges.”

Ms Fitzgerald Kane and Mr O’Mara Walsh maintain that it looks like tourism investment will be down next year, cutting Tourism Ireland’s and Fáilte Ireland’s budgets.

They note that the industry sought funds to mitigate the impact of the State takeover of many hotels and guesthouses on attractions, restaurants and pubs, but still awaits Government confirmation of this.

“The majority of the 40,600 businesses within tourism and hospitality are still reeling from Government’s decision to hike the VAT rate last month, a measure which is expected to add 4.1 per cent to food and accommodation inflation,” their letter states.

It acknowledges that Government could not backtrack from the VAT hike, but neither mentioned nor pledged to review it in the budget.

While the council welcomes the €250 million rates rebate scheme, it argues that this will be too small to materially benefit tourism and hospitality.

The number of Irish people flying abroad is inflating airport figures while Government humanitarian contracts are doing the same for hotel occupancy, say Ms Fitzgerald Kane and Mr O’Mara Walsh.

However, they point out the real number of tourists is “well shy of where it was and where it needs to be”.

They note that the council’s industry plan, Vision 2030 – An Irish Tourism Strategy for Growth, published last month, targets a 50 per cent revenue increase, but this is based on pro-industry policies.

“Regretfully such a pro-tourism approach was missing in Budget 2024,” they say.

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