Irish Hotels Federation reaction to Budget 2009
Commenting on Budget 2009, Matthew Ryan, President, Irish Hotels Federation, states, “We acknowledge the efforts by the Government today to steer the economy through this recessionary period and to get the country’s fiscal position back on track. The economy’s recent downturn is significant as the effects of recent financial turbulence, low consumer sentiment and long term uncertainty all impact on our tourism sector. Attempts to stabilise the economy are to be welcomed and the Government’s strong actions to reduce the public sector spend is positive. The sudden economic decline has generated specific difficulties for the hotel industry, which is being adversely affected by falling revenues and rising costs.” Matthew Ryan comments on specific relevant areas as follows:
Tourism funding: “The Federation specifically welcomes the Government’s maintenance of tourism marketing funds for promoting Ireland as a destination both internationally and domestically. Marketing Ireland is crucial to ensure Ireland’s share of lucrative global tourism market. We know that for every €1 spent on tourism marketing brings in €15 in tourism revenue. As such, any increases in marketing funding for Fáilte Ireland and Tourism Ireland represent a sound investment in Ireland’s tourism product.”
No increases in Hospitality VAT: “The IHF welcomes the fact that the Government has acknowledged the importance of labour intensive industries by not increasing the VAT rate impacting on the hotel accommodation and restaurant services. The industry is seeking to be as competitive as possible against a backdrop where energy, labour costs, interest rates and public services charges are eating into hoteliers’ efforts. This has been acknowledged by Government today as there has been no increase in the 13.5% VAT rate.”
Airport Exit Tax: “The €10 airport exit tax is a soft option to create revenue which will sacrifice the long term prospects tourism industry for a short term gain. Ireland is unique in the EU due to its island status – people travelling to our country have no alternative but to travel by air or sea. One of the key drivers of Ireland’s tourism growth in the past decade has been the emergence of low cost air access following the successful Ryanair model. This tax has the ability to undo a lot of the gains and efforts achieved in this area to date. We can’t blindly follow other EU countries policies seeking to reduce reliance on air travel under the guise of environmental initiatives – these countries have alternative options of rail and road for travellers wishing to visit another country. This is a hugely regressive step that will have lasting consequences on Ireland’s tourism position and the 140,000 jobs it supports.”
NDP - roads will assist spread tourism throughout the country: “We welcome the Government’s commitment to continue to deliver on the infrastructural improvements the National Development Plan. Improvements in this area assist facilitate a better spread of tourism throughout the country.”
The IHF, which represents over 1,000 hotels and guesthouses, maintains that tourism is Ireland’s most important indigenous industry and largest employer with approximately 140,000 people employed in the sector. It provides employment in every single city, town and village in Ireland. It generated almost €5 billion in foreign exchange earnings in 2007. It provided almost €3 billion in revenues to the exchequer in 2007 accounting for 4% of GNP.