The tourism industry is preparing to submit a recovery plan to Government with four budget requests to help the sector recover after the pandemic.
The Irish Tourism Industry Confederation (Itic) will ask for an extension of wage subsidies for the sector until June next year in October's Budget 2022.
It will also seek a doubling of funds for the marketing of Ireland as a holiday destination to foreign tourists, as well as a further extension of its 9 per cent VAT rate. Finally, it will also seek a cut in employers’ PRSI for the sector.
As Ryanair chief executive Michael O'Leary warned on Wednesday that the sector in Ireland is facing "four or five years" of trouble unless the State fights for new airline routes, Itic also said the Government must restore connectivity as international tourism makes up 75 per cent of the industry.
“The industry is at rock bottom. We would hope to see bookings return to 2019 levels by 2025 or 2026, but that is predicated on a range of pro-tourism and pro-aviation policies from Government,” said Eoghan O’Mara Walsh, Itic’s chief executive. “The potential gains are large.”
He pointed out that the State still had not implemented recommendations from an aviation industry recovery taskforce which called for steep cuts in landing charges at Irish airports to tempt back airlines.
“We need to get tourists into the country before the industry can recover,” he said. “Domestic tourism will fall off a cliff when schools reopen next week. There will be tumbleweeds rolling through popular Irish tourist towns, while Dublin hotels are at just 23 per cent occupancy for the year to date.”
It is officially estimated that by the beginning of summer, the tourism and hospitality industry had lost about 100,000 of the 265,000 jobs it supported before the pandemic.
Competition
Mr O’Mara Walsh’s call for State intervention chimed with some of Mr O’Leary’s comments as said the Government needed to do more to help the sector. The Ryanair chief executive accused the Government of “sitting on its hands” in the face of “aggressive” competition from other European governments that were fighting to win back air connectivity.
“The real danger is that Ireland will be bypassed. This is a serious point: Ireland is an island on the periphery of Europe. Tourism is being devastated and nothing is being done about it,” he said.
Mr O'Leary also dismissed European Union plans to impose green taxes on aviation fuel, which will make flying more expensive, as "a tax grab" because the cash raised was not being ring-fenced for environmental spending.
He said in the long run the tax move would “extend Ryanair’s advantage” over its competitors as it has a lower cost base and “the lowest cost provider gains a significant advantage” when charges go up across the market.
He said Ryanair would this summer return to above 75 per cent of pre-Covid passenger numbers. “It’s at lower fares, but we don’t care about that.”
Eamon Ryan, Minister for Transport, said the Government was determined to help the aviation and tourism sectors recover and to restore Irish connectivity.
“The tourism and aviation recovery is hard to predict. I hope it won’t take four to five years, but it will take some time.”
