Tourism and hospitality chiefs have called for an immediate change in direction by the next Government to address the enormous challenges facing the inbound and domestic industry.
With negotiations on the formation of a new Government underway, industry groups are urging all political parties and TDs to ensure that tourism and hospitality is to fore of policy discussions for the programme for Government.
According to tourism leaders, the sector is now at a cross-roads, with many businesses struggling to deal with very tight margins and reduced profitability due to ever-increasing operating costs, particularly in relation to food services.
This, they said, has been driven in recent years by economic policies pursued by the Government, including a series of employment-related cost increases coming into effect in close succession. The impact of these measures has been particularly acute for hospitality food businesses given the labour-intensive nature of our industry.
Representing businesses which support over 270,000 livelihoods the length and breadth of the country, the Chief Executives of the Irish Tourism Industry Confederation (ITIC), Restaurants Association of Ireland (RAI), Vintners Federation of Ireland (VFI), Irish Hotels Federation (IHF) and Licensed Vintners Association (LVA) stated:
“Businesses throughout our sector are facing a perfect storm. They are operating under exceptionally tight margins, falling food sales and significant increases in operating costs. A fundamental change in direction is now imperative if we are to stave off what can only be described as a growing commercial crisis facing many businesses. This is of critical importance given the integral role our industry plays within the economy as the country’s largest indigenous employer and a major engine for growth and prosperity.”
“We are calling for the following Four Policy Measures to be prioritised within the next programme for Government in order to put our sector on a more stable footing:”
- Reduction in VAT for hospitality food services
An immediate reduction in the VAT rate for hospitality food services is required to help offset the impact of exceptionally high operating costs. We are calling on the incoming Government to commit to a permanent VAT rate of 11%.
- Tackling cost of business challenges
Addressing unsustainable increases in the cost of doing businesses within Irish tourism and hospitality must be a major priority. This must include meaningful, sector-specific measures including an across-the board reduction in Employers’ PRSI within the sector.
- Removing the Dublin Airport passenger cap
Enhanced air access is vital for the long-term development of our economy. The passenger cap at Dublin Airport is a major barrier to further recovery and growth. An urgent legislative intervention by Government is required.
- Economic Department for Tourism & Hospitality
Given the enormous economic importance of our industry, tourism and hospitality would be best placed within a Government Department with an economic portfolio in the form of a reconfigured Department of Enterprise, Tourism, Trade and Employment.
