Brexit, the VAT increase and damaged competitiveness have all conspired to make trading conditions more difficult for Ireland’s tourism sector, according to the Irish Tourism Industry Confederation (ITIC).
The group, in its budget submission, claimed that 2019 is proving a challenging year for Ireland's tourism industry.
It highlighted figures from the Central Statistics Office which found that expenditure by overseas visitors was down by 4%, with all markets in retreat, except for North America.
With a particular focus on Brexit in mind, the ITIC called on the government to review the tourism VAT rate, reduce the costs of business and for insurance reform.
Maintaining Competitiveness
The group said that the tourism VAT increase from 9% to 13.5% has meant an additional tax burden of €466 million on the tourism industry this year, and that Ireland's VAT rate is now higher than 27 other countries across Europe, which is hurting competitiveness.
With regard to the costs of doing business, ITIC said that Ireland is a "high cost, slowly increasing" economy, due to a high number of new policies which have damaged the industry, such as the carbon tax, which is due to be increased.
In order to help the industry maintain its competitiveness, it also urged for a review of the "unsustainable insurance increases" that have put a "significant burden" on tourism.
ITIC suggested that the government increase its funding for the industry to increase overseas marketing, with specific industry funding to mitigate Brexit's impact, and increase the development of new products of scale and international appeal to compel visitors to continue coming to Ireland.
"At a time of great international uncertainty, Irish tourism must be protected and supported," the group said in its submission. "Budget 2020 is a critical opportunity for the government to prove its commitment to Irish tourism and support Ireland's largest indigenous industry and biggest regional employer. Pro-competitive policies and strategic investment are required more than ever as Ireland's tourism industry faces a challenging period."
© 2019 Hospitality Ireland – your source for the latest industry news. Article by Aidan O'Sullivan. Click subscribe to sign up for the Hospitality Ireland print edition.
