Experience sector a key component of Ireland’s economy, says Ibec

Encompassing businesses that operate across multiple sectors including tourism and hospitality as well organisations in the arts, cultural, sporting and heritage sectors, the scale and importance of Ireland’s experience economy came into sharp focus during the Covid-19 pandemic.

Prior to the pandemic the sector employed 330,000 people and was responsible for €4 billion in spending on goods and services each year – €1 billion of it on food and drink. In addition, the annual bill for wages, salaries and employment taxes was more than €4.5 billion.

“The experience economy is important not just to tourism and the wider economy but also for the quality of life for our citizens and as a key component that supports our broader business environment,” says Ibec executive director of membership and sectors Sharon Higgins.

In 2021, Ibec brought together a broad coalition of stakeholders from the different sectors that make up the experience economy to launch a campaign to promote greater awareness of its importance to the country as well as to lobby for measures to support the industry’s recovery and future growth.

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The More Than Meets the Eye campaign is co-ordinated by a cross-sectoral committee chaired by Pat McCann, former chief executive of Dalata Hotels.

“It’s a much broader industry than people imagine it to be,” he says. “There are the hotels, restaurants and bars and then there are their suppliers like the bed makers, laundry services, food and drinks companies, technology services companies and so on. It’s important for all those businesses to have a voice and Ibec provides that voice.”

McCann is quick to acknowledge the effectiveness of government actions during the pandemic. “Dalata Hotels operates in Britain and Ireland, and we had experience of what happened in the two countries,” he points out. “In Ireland, companies were paid to keep people in work. In the UK they were paid to keep people at home. That was counterproductive and people became disengaged. The Irish Government did an extraordinarily good job in a short period of time.”

More recently, Ibec welcomed the Government proposal to allow longer opening hours for pubs and nightclubs. “Ibec is delighted to be a part of the work in this area as it highlights the importance of bringing vibrancy to our cities and encouraging footfall into cities. This is an important first step in revitalising the broader night-time economy. We are looking forward to continuing to work with the Government on this.”

The Ibec campaign is calling for a more co-ordinated Government strategy for the industry. “As a key business sector, the strategy and direction for Ireland’s Experience Economy should be developed and co-ordinated by one single department,” says Higgins. “We believe that this should be the Department of Enterprise. This does not mean that all the actions should be undertaken by that department but that an overall strategic approach is critical to ensure the sustainable development of the experience economy.”

There is also a need for a long-term national events strategy. “It takes time to win big events and conferences,” McCann notes. “Sporting wins are great, but we need to look at other areas as well and attract business tourism and international conferences to Ireland and the regions.”

Rising cost pressures need attention as well. “Experience economy businesses are dealing with significant cost increases following two years of having almost no revenues,” Higgins points out. “In this context it is important to maintain the 9 per cent VAT rate permanently, not just for the next year.”

Energy costs also require action. “The Temporary Business Energy Support Scheme is very good but a lot of businesses in the experience economy are not eligible for it,” she notes. “It was great to hear Minister [for Finance Michael] McGrath say that he will keep it under review. We hope to see it expanded and extended for a longer period.”

Talent development is another area of focus. “We’ve got to stop talking about jobs and start talking about careers in the industry,” McCann contends. “There are lots very good high-paying jobs in the industry. Sometimes people think it’s all about front of house but there are also careers in areas like IT, HR and finance. The industry also requires AI developers for websites and booking systems. Revenue management and dynamic pricing skills are now highly sought after as well.”

Investment in education and training is critical to meeting these talent needs, Higgins adds. “The surplus in the National Training Fund stands at €855 million and is projected to rise to between €1.4 billion and €1.9 billion by 2025. Businesses must be able to access the fund to help alleviate current and future skills challenges. But there is a need to reduce the red tape. Many businesses don’t have the capacity to deal with the bureaucracy. In some cases, you have to apply to become eligible to apply. We have discussed this with Minister [for Further and Higher Education, Research, Innovation and Science Simon] Harris.”