Surge in visitors is due to lower VAT rate, say tourism chiefs
The reduction in the VAT rate for the hospitality industry has led to a massive surge in job creation, and was a key factor in the significant rise in the number of overseas tourists here this year, according to hoteliers and tourism chiefs.
The latest figures from the Central Statistics Office showed a 9.9pc increase in the number of trips taken by overseas visitors here between January and July to 4.2 million when compared with the same period last year.
There was also a corresponding 11.1pc rise in the number of trips taken between May and July this year to 2.3 million, an increase of 231,100 trips over the same period last year. Visitors from the UK remain the most frequent visitors to our shores, taking 1.7 million trips here this year, an increase of 11.3pc, while visits by North Americans this summer jumped by 16.6pc between May and July.
There was also a 17.1pc increase in visits from long-haul destinations and developing markets so far this year
Welcoming the figures, Tim Fenn, CEO of the Irish Hotels Federation, said: "We're delighted with the recovery in the number of overseas visitors, but in order to do it, we need to retain our competitiveness."
He praised the introduction of the lower band VAT rate of 9pc in 2011 for saving the tourism industry during the economic downturn and creating some 23,000 jobs in the hospitality sector since then.
"It's a massive success and it's backing up the message that there's now great value for money in Ireland," he told the Irish Independent.
However, he said there was still "excess capacity" in many hotels and urged the Government to retain the lower rate VAT in order to continue to lure visitors.
This is a view echoed by the Dublin Chamber of Commerce, which urged the Government to retain the lower rate until at least 2016.
"The 9pc VAT rate places Ireland in a favourable position versus a majority of other EU member states, particularly in the food and restaurant sector," said chamber CEO Gina Quin.