According to the latest industry survey from the Irish Hotels Federation (IHF), 57% of hotels have seen a fall in overall business levels compared to this time last year while 33% have seen an increase.
78% of the hotels surveyed by the IHF said that they have seen a fall-off in business from Great Britain compared to last year, while 60% reported a decrease in business from Northern Ireland. 64% of the hoteliers surveyed reported that the weakness in the value of sterling has had a negative impact on business levels while risks associated with Brexit have resulted in 73% of the hoteliers surveyed re-examining investment plans and taking a more cautious approach for next year.
36% of the hoteliers surveyed reported an increase in business from North America while 45% reported an increase in business from Irish domestic tourism.
Commenting on the survey’s findings, IHF president Michael Lennon said, “Irish tourism has been one of the great success stories of the economy in recent years, supporting 270,000 jobs and promoting balanced regional growth across the country. However, we are now at a crossroads and facing a number of pressing challenges including serious risks associated with Brexit, increasingly high costs of doing business in Ireland and ongoing difficulties in attracting visitors to the regions and extending the short tourism season. To help address these challenges, we are calling for additional supports from government to assist tourism businesses, including a restoration of the 9% VAT rate.
“Brexit is particularly challenging in light of our heavy reliance on visitors from the UK, which is even more pronounced for regional tourism businesses. A ‘no-deal’ outcome would cause enormous difficulties for the hotel sector, creating the prospect of a drop of over 10% in tourism revenues from UK visitors and a decline in Irish consumer sentiment, which would have a knock-on effect on domestic tourism activity.
“Furthermore, we continue to face increasingly high costs of doing business, which have been compounded by the government’s decision to increase the tourism VAT in last year’s budget. As a result, Ireland now has a higher rate of VAT on tourism accommodation than 27 countries in Europe with which we compete, making us less attractive as a destination.”
Product Development And Market Diversification
Lennon acknowledged the progress made in recent years in new product development and market diversification, including campaigns targeting higher spending visitors. He said that initiatives such as The Wild Atlantic Way, Ireland’s Ancient East and Ireland’s Hidden Heartlands offer significant potential for regional tourism growth. He stated, “They can play a vital role in lengthening the tourism season in parts of the country that currently lag behind. This is of critical importance to local economies where tourism is the primary contributor. These initiatives must be more adequately resourced. This requires an increase in government investment in tourism marketing and development.”
Tourism Satellite Account
The IHF said that it is continuing to press the government to introduce a Tourism Satellite Account within the Central Statistics Office (CSO) to provide a full analysis of the economic activity in the tourism industry and how much it contributes to each county throughout the country. Lennon asserted, “It will also provide independent verification to assist those who rely on the National Accounts, where tourism is not identified, to inform their deliberations on taxation and economic policy.”
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