MEASURES TO improve banking liquidity and access to seasonal funding, a commitment to a minimum of €3 million in additional marketing funds, and a freeze on tourism-related taxes have been called for in Budget 2009 by the Irish Hotels Federation (IHF), writes Colm Keena, Public Affairs Correspondent.
In its pre-budget submission the federation urged the Government to preserve the significant tourism success achieved over the past 20 years.
It said the measures in its submission would put the sector on a "more secure footing as hotels and guesthouses seek to trade through rapidly deteriorating market circumstances where access to financial assistance is constricted".
The submission, Consolidating the Achievements of Tourism, has been presented to Minister for Finance Brian Lenihan.
The federation called on the Government to ensure sufficient and adequately priced credit facilities are available in the banking system for hotels and guesthouses requiring additional short term finance facilities.
Failing that, the hotels federation called for the introduction of a loan guarantee scheme to assist commercially sound hotels and guesthouses requiring short term financial assistance due to the current credit squeeze.
The federation represents 1,000 hotels and guesthouses. According to Matthew Ryan, federation president, the sudden decline in the economic environment has created difficulties for the hotel industry which is being adversely affected by falling revenues and rising costs.
"The industry has invested heavily over the recent years to expand stock, upgrade facilities and enhance the quality and range of its product offering in line with the Government's tourism growth plan. The situation now calls for liquidity measures to be introduced to assist those commercially sound businesses to trade through a period of economic turbulence.
"The industry is seeking to be as competitive as possible against a backdrop where energy, labour costs, interest rates and public services charges are eating into our efforts. Combined with exchange rates hampering our attractiveness in the dollar and sterling markets, this is having a real impact on the hotel sector in 2008."
The federation said 53 per cent of hotels and 59 per cent of guesthouses did less business in January to June 2008 compared with 2007. Room occupancy rates are down from 61 per cent to 54 per cent in 2008 to date.
All major overseas tourism markets are substantially weaker with North America being particularly hard hit.
The federation called on Mr Lenihan to avoid tax increases in tourism-related products and services at national and local levels and to introduce a freeze on all public sector charges. It called on the Government to ensure the introduction of any carbon tax is revenue neutral and does not increase the tax burden for Irish businesses.
"We need protective, prudent measures now so that the industry can be in a strong position to take best advantage of the market opportunities when the resumption of normal economic growth rates returns in 2010," said Mr Ryan.
