Wednesday 18 September 2019

Tourism sector set for €2.5bn injection despite Brexit blow

ITIC chairman upbeat over growth but UK visitors are 'staggering to a halt'

ITIC chairman Ruth Andrews says tourism needs more State support. Photo: Maxwells
ITIC chairman Ruth Andrews says tourism needs more State support. Photo: Maxwells

Michael Cogley

More than €2.5bn will be injected into the Irish tourism sector over the next five years despite Brexit causing the UK market to "stagger to a halt", the head of the Irish Tourism Industry Confederation (ITIC) has said.

Uncertainty around the UK's European Union membership and a weakened pound have hit Ireland's competitiveness for overseas tourists. ITIC includes some of the biggest names in Irish tourism, including Aer Lingus, the Guinness Storehouse and Irish Ferries.

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Speaking to the Sunday Independent, newly appointed chairman Ruth Andrews said that up to €500m a year was expected to be spent on tourism infrastructure like hotels, visitor centres and new air routes by 2025.

"We would expect the value of the sector per annum will be around €8.1bn and that's export earnings. That's talking about international visitors and their spend coming into the country," she said.

"Right now, it's at €5.2bn. Our focus on tourism has changed from the volume of people coming in to the revenue, and how we generate the right tourists to give us the right revenue."

Andrews also said she hopes the number of visitors coming to Ireland will rise from 10 million in 2018 to 13.7 million in 2025, with an additional 55,000 jobs being created as a result.

However, she said uncertainty around Brexit has caused problems for growth in the sector. "2018 was a phenomenal year for Irish tourism and building growth after almost five years of double-digit growth. We know that can't continue, so we are keenly aware that growth will slow," she said.

"The UK is our biggest single international market. It's down a few percentage points this year and, again, we've seen little or no growth this year. Brexit has literally brought the British market to a staggering halt."

Andrews also said that Brexit was beginning to have an impact on continental markets.

She said that consumers on the continent's understanding of the geography of Ireland was "challenged" as a result of the Brexit negotiations, with some worrying about travel concerns in relation to the Border.

Andrews called on the Government to review the VAT rate on the tourism sector, which was restored to 13.5pc in 2019.

She called the timing of the restoration "totally inappropriate", given the uncertainty caused by Britain's EU exit.

In its pre-Budget submission, ITIC also called for a relief on commercial rates of 30pc for tourism and hospitality businesses, in local authority areas where valuation revisions have yet to be completed. Other requests from the group included a fast-track of insurance reform, a postponement of commercial water charge increases and a Brexit diversification fund.

ITIC's submission additionally called for further investment in overseas advertising. The group said that another €30m for marketing was needed to help attract visitors from further-flung locations.

Andrews said the backing from the State to tourism in comparison with other sectors was "very small".

"The VAT hike put taxation into Government coffers of around €480m," she said.

"Look at agriculture; it employs less than half the people tourism does, and yet the Department of Agriculture has for the beef farmers - and rightly so - put €100m in to support them because of the impact of Brexit."

The ITIC chairman also warned that there were other countries out to "eat the lunch" of Ireland's tourism market, due to the strong growth reported in recent years.

The comments from ITIC follow plans from Fáilte Ireland to pursue high-spending tourists and business delegates from the likes of France and Germany.

It was reported in June that Fáilte Ireland was in the process of hiring a lead generation and representation specialist that wanted to grow the "top end" of luxury travel in Ireland, targeting individuals with millions of dollars in liquid assets.

It said that representation will potentially be required in the United States, Canada, France, Spain, Italy, Germany, Switzerland and Austria, as well as Benelux and Scandinavia.

Fáilte Ireland also revealed Kilkenny Castle to be its top free Irish attraction last week, with almost 800,000 people visiting it last year.

The Guinness Storehouse was the top paid-for attraction, with around 1.7 million visitors throughout 2018.

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