Tourism And Hospitality Enterprises Could See €1.4bn Increase In Payroll Costs Up To 2026

A new report published by the Irish Tourism Industry Confederation (ITIC) has warned that government labour policy will add €1.4 billion to payroll costs of tourism and hospitality enterprises between now and 2026. ITIC has said that mitigation measures are urgently needed to ensure the competitiveness and viability of Ireland’s largest indigenous industry and biggest regional employer.


‘Tipping Point’

“With St Patrick’s weekend behind us we’re now into the tourism season proper and it is clear that the industry is at a tipping point,” said Elaina Fitzgerald Kane, Chair of ITIC. “North America looks strong but other source markets are soft and there is an enormous cost burden being imposed on businesses which is threatening the viability of many”.


‘Significant Pressure’

Economist Jim Power has published a report for ITIC entitled ‘An Analysis of Government-induced costs on tourism and hospitality enterprises‘ and it argues that labour market measures including the move to a living wage, PRSI increases, pension auto-enrolment, and enhanced statutory sick pay are all adding ‘significant pressure’ on the sector and will add 6.6% to payroll costs this year alone and 19.4% by 2026.


The report argues for the restoration of the 9% VAT rate for the sector, changes to employer PRSI rates, and an annual enterprise support package.


Dublin Airport Cap

Meanwhile, Eoghan O’Mara Walsh, CEO of ITIC, warned that the cap at Dublin Airport meant that future tourism numbers were “jeopardised.” He also criticised the state’s “over-reliance” on the hotel sector for humanitarian purposes.


‘Hugely Destabilising Effect’

“Over 20% of all tourism beds nationally have been taken out of the tourism economy at this stage by the Government. That is having a hugely destabilising effect,” said Eoghan O’Mara Walsh.

“We are calling on Government to urgently develop an alternative plan to house Ukrainian refugees and international asylum seekers otherwise this summer there will be tourism towns the length and breadth of the country without an adequate supply of tourism beds and therefore with very little tourism activity.”

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