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Tourism Needs Sustainable Step Change

Hoteliers seek 'Firm Commitment' in Budget

Hotels and Guesthouses around the country are calling for a firm commitment from government on the continuation of business and employment supports in the upcomingelaina budget. Elaina Fitzgerald Kane, President of the Irish Hotels Federation says a failure to act decisively now would have major economic implications both nationally and regionally, given the reliance of many counties and towns across the country on tourism for prosperity and employment.

 “The Government’s pro-tourism supports so far have been critical, and a lifeline for many businesses, helping to restore employment and support the viability of businesses until we get back to a more stable footing. However, we need a firm commitment that they will be retained until the impact of the pandemic has passed. The tourism recovery has begun, but it will take time.”

 

Specifically, hotel and guesthouse owners are seeking the extension of the EWSS employment supports at current levels, to help businesses retain and develop their teams over the coming months along with the extension of the local authority rates waiver until June 2022, when the summer season begins. 
 
 The IHF is also calling for the 9% tourism VAT rate to be retained until after 2025, to provide certainty and allow Irish tourism to compete internationally. Ms Fitzgerald Kane says: “As an island nation, international tourism is critically important, accounting for almost 70% of tourism revenue pre-Covid. It is a highly competitive industry, and we are seeing intense competition in the international market as we vie for overseas visitors. Most travel agents are already contracting for 2023, yet they have no certainty around tourism VAT and this is undermining advance bookings and ultimately tourism’s recovery.”
 
Ms Fitzgerald Kane adds: “Tourism is Ireland’s largest indigenous industry, accounting for one in ten of all jobs, 70% of which are outside of Dublin.  In the summer months, the hotel sector alone recovered almost 30,000 jobs – bringing the total number of livelihoods supported by the sector to 57,000, still some bit short of the 65,000 it supported in 2019 but in itself a remarkable achievement. Government supports have been important to restoring employment and will continue to be going forward until business levels recover. Quite simply, we cannot be left fail after coming this far.
 
 “The economic and financial impact of Covid has been devastating for our sector and wider tourism industry. Hotels and guesthouses will have seen a combined €5.3bn drop in revenues across 2020 and 2021 as a direct result of this crisis with overall revenues dropping 68% in 2020 and 55% this year. In real terms that’s over 19 million room nights lost, with billions wiped out in food and beverage sales, and countless missed opportunities for hotels reliant on entertainment, business meetings and events – as well the enormous impact on the many thousands of suppliers to our sector.”
 
While tourism performed well during the summer months in some regions, hotels and guesthouses now face an uncertain nine months until the 2022 summer season. Booking levels have fallen sharply in the absence of overseas visitors. Meetings and events which would normally sustain the sector during the off-peak season are also below expectation.
 
 Ms Fitzgerald Kane states: “Under the most optimistic scenario for the remainder of 2021, average occupancy is projected to reach 32% for the year as whole – a significant collapse in activity compared with 2019, when room occupancy was 73% and only a modest increase on the all-time historic low of 30% reached in 2020. Expectations are that overseas tourism into Ireland will remain severely constrained next year and is unlikely to recover to pre-Covid levels until 2024/2025. The recovery is beginning but it will take time – tourism is not a tap that can be turned on and off at will.
 
 
 

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