Timing of VAT rise 'really awful' as Brexit looms, tourism forum is told
Possible National Tourism Day and 'doomsday' Brexit scenarios among topics discussed at national tourism forum
Ireland's tourism industry is booming, but the combined effect of a ‘bad’ Brexit and a VAT rise to take effect on January 1 could throw a serious spanner in the works.
Those were among the takeaways at ‘Let’s Talk Tourism’, the national tourism forum taking place in Killarney, Co Kerry, today.
“We are coming to the end of best year ever for Irish tourism," said the opening speaker, Paul Kelly, CEO of Fáílte Ireland. "Those are phenomenal figures… but I don’t think we can continue to grow at that kind of rate.”
Ireland is on course to clock around 9.69 million visitors this year, he said, but the priority now for Fáilte Ireland is about building sustainable growth.
“Falling off a cliff edge is what we all want to avoid,” added Eoghan O’Meara Walsh, CEO of the Irish Tourism Industry Confederation (ITIC).
Diversifying beyond the British market and enticing visitors to shoulder seasons and rural areas were key themes for both speakers, with O’Meara Walsh suggesting a need for capital spending on projects like a ‘coast-to-coast greenway’, a Dark Sky Observatory or a visitor centre at Donegal's Slieve League cliffs.
There was broad support for the idea of a ‘National Tourism Week’ or day similar to those held in the US, UK or Canada, with Minister of State at the Department of Transport, Tourism and Sport, Brendan Griffin, later adding that "I think only positive things could come out of it".
However, the recent VAT hike for the tourism and hospitality industry, from 9pc to 13.5pc, effective from January 1, was mooted as a real threat to demand.
“With Brexit coming down the track, the timing is really awful," O'Meara Walsh said.
Minister Griffin conceded that the rate hike was a "challenge".
Keeping the tourism VAT rate at 9pc was "something I fought very hard for," he said during a panel discussion. "But I didn’t get a result on it, unfortunately, not this time..."
However, he added that there was a 26pc increase in the tourism budget for 2019, which would help investment, and that 13.5pc was still lower than the comparable, 20pc standard rate in the UK and Northern Ireland.
Great line-up of speakers and ideas at #TalkTourism today. Ireland is on a roll, but I think the key word from today’s forum was ‘sustainability’. How to grow smart, and think carefully about what we’re selling. pic.twitter.com/9pnYm9fhzn— Pól Ó Conghaile (@poloconghaile) November 9, 2018
"I don’t think it is something that will completely kill the industry," he said.
The Killarney forum saw a largely optimistic series of talks and panel discussions on the state of Irish tourism. Moderated by broadcaster Olivia O’Leary, the sold-out event was held at the Great Southern Hotel.
The question of how to sustain Ireland’s tourism growth while riding out Brexit, the VAT hike and increased international competitiveness emerged as key.
Global tourism agencies are moving from “demand creation” to “demand management”, said Mark Henry of Tourism Ireland, who noted the exponential potential for growth in emerging markets like China.
Over 100,000 Chinese visitors will come to Ireland in 2018, added James Kenny, Tourism Ireland's China Country Manager, but businesses needed to be 'China-ready'.
Panel discussions noted potential future issues with labour supplies and the need for immigration and EU workers to staff Ireland's growing tourism sector (already responsible for 240,000 jobs).
The discussions brought to a close a busy week for industry leaders.
It saw 70 businesses from all over the island join Tourism Ireland on the ‘Ireland’ stand at World Travel Market in London, while on Wednesday, both Mr Kelly and Niall Gibbons, CEO of Tourism Ireland, warned the Oireachtas Transport, Tourism and Sport committee of the threat Brexit poses.
A no-deal Brexit (described as a “doomsday” scenario at the Forum) could cost Ireland up to €390 million, Kelly said.
NB: The Irish Independent is media partner for Let’s Talk Tourism.