Budget 2019 and Supporting Tourism in Ireland
The tourism sector is a significant source of employment across every region of Ireland. The UK is the single largest source market for the tourism industry and provides a high percentage of the regional tourism business in Ireland, with 41% of UK visitors staying outside of Dublin in 2016. The tourism industry is particularly vulnerable to external economic factors and we are already seeing the impact of Brexit on visitor numbers from the United Kingdom: figures from Tourism Ireland showed that numbers of visitors from Britain to Ireland fell from 3.9 million in 2016 to 2.7 million in 2017, with the estimated loss to the tourism industry as a result standing at just over €60 million in 2017. Future constraints to growth in the UK economy and any possible fluctuations in Sterling mean that visitor numbers from the UK to Ireland are likely to continue to fall.
The Chamber Network believes that Brexit will have a negative impact on Ireland’s tourism industry and was identified as one of the top three concerns in a survey carried out earlier this year. Maintaining the reduced 9% VAT rate for the hospitality sector is required to support tourism businesses through the volatility currently being experienced because of Brexit. In addition to this, it is now more crucial than ever that we are promoting Irish tourism abroad and seeking to attract new visitors from outside of the UK, broadening the reach of our target markets further afield.
As part of Budget 2019, we must now increase the capacity of state agencies to promote Ireland as a destination to new markets to reduce our reliance on the UK and US markets. There is also a need for greater coordination of tourism initiatives with other related services. For example, despite significant investments in cycling Greenways across the country and related promotion, Irish Rail trains can transport a minimal number of bicycles. The train line leading to the Great Western Greenway is only capable of allowing two bikes per journey from Dublin. At the same time, the third runway planned for Dublin Airport is subject to operating conditions that are overly restrictive and stand to hinder the growth potential of visitors to Ireland and threaten to undermine our national airport.
Recommendations:
- Maintain the 9% VAT rate for the hospitality sector.
- Increase the budget of state agencies Fáilte Ireland and Tourism Ireland to invest further in market diversification with an emphasis on bringing more into the regions.
- Fáilte Ireland should be additionally funded to provide increased programme supports for tourism businesses to face the challenges Brexit presents, with a particular focus on market diversity programmes and to help drive revenue in border counties.
- State agencies should be resourced to increase levels of investment in niche areas that distinguish Ireland as a destination, such as Ireland’s growing potential as a place for unique and high-quality food, along with increased walking and cycling routes across the country to promote activity in every region and to attract diverse types of visitors.
- Government should increase the fund of €1 million provided through Tourism Ireland for regional co-operative marketing activities and the promotion of our regional ports and airports to €3 million per year. Additional supports must also be provided to enable regional airports to develop new route initiatives further afield
- Government must ensure that tourism initiatives and strategies are coordinated with public transport provision and related services
- Operating conditions attached to the development of a third runway at Dublin Airport must be reconsidered and revised to support Ireland’s international connectivity.