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EU rescue funds should be used for tourism, says hotels group 


Recovery: Tim Fenn of the IHF believes supports don’t go far enough

Recovery: Tim Fenn of the IHF believes supports don’t go far enough

Recovery: Tim Fenn of the IHF believes supports don’t go far enough

THE Irish Hotels Federation (IHF) has urged Government to urgently seek assistance from the planned €750bn EU Recovery Fund that's being established to help member states tackle the economic impact of the Covid-19 crisis.

"With 70pc of tourism jobs based outside Dublin, further delays in providing support measures could have devastating implications, particularly for rural Ireland, that may take decades to recover," said the federation's CEO, Tim Fenn.

He insisted that delays in seeking EU funds could put Ireland at a competitive disadvantage.

"One of the lessons learnt from the financial crisis was the requirement to act extremely quickly so that large parts of the economy are not obliterated, with long-term consequences," he said.

"Tourism is highly competitive," Mr Fenn added. "Many major markets with which Ireland competes for tourists - such as France - have already announced substantial support packages for their tourism industries, with further supports likely through EU funding. These supports are giving Ireland's competitors much-needed certainty to plan their recovery."

The EU's Recovery Fund could see Ireland receive just €1.9bn of the money.

The IHF wants the government to introduce more liquidity measures for the tourism and hospitality sector. It is hoping for a direct business grant scheme; 0pc interest in government-guaranteed finance; a government-supported scheme for the deferral of capital and interest payments for one year; and a reassessment of the Strategic Banking Corporation of Ireland loan system to ensure that "appropriate products" are available for tourism and hospitality businesses.

The federation has again called for the VAT rate for tourism firms to be permanently reduced. It has also called for the job subsidy scheme to be continued for the sectors until the impact of physical distancing and mass gathering restrictions has abated.

It wants a current three-month waiver on local authority rates and charges extended for a minimum of 12 months.

"After that, payment of local authority rates should be based on reduced levels of activity due to the Covid-19 crisis," the IHF said.

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"The June bank holiday traditionally marks the start of the holiday season, yet thousands of tourism businesses across the country remain closed due to the pandemic, including 90pc of hotels, and the majority of the industry's 260,000 employees are laid off," said Mr Fenn.

"While the various business and employment supports that have been introduced already are very welcome, they do not go far enough," he said. "Some industries, like tourism, have been far more severely affected and face a more challenging road to recovery and this is not being adequately recognised."

Mr Fenn said any increased domestic business will not offset lost international visitors.

"Home-grown tourism will not recoup the significant financial loss to the economy of overseas tourism, which last year accounted for over €7bn in revenue compared to less than €2bn from the domestic market," he said.

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