Brexit poses 'most immediate threat' to hospitality industry, restaurants association warns

Brexit poses 'most immediate threat' to hospitality industry, restaurants association warns

Brexit will pose the hospitality industry's "most immediate threat", according to the Restaurants Association of Ireland (RAI).

The group launches its Pre-Budget Submission for 2019 today which outlines its plan to sustain jobs, maintain competitiveness and deliver certainty for the restaurant and tourism sector.

The Irish restaurant industry employs 171,700 people and contributes €2bn to the economy each year.

The RAI said it is "critical" that the 9% VAT rate is kept in place for until 2022 in order for the Irish economy to remain competitive.

Adrian Cummins, Chief Executive of the RAI said "When the economy went into decline, restaurants endured falling numbers of diners, rising prices and great financial uncertainty, with many having to close their businesses.

"Since the VAT cut, employment in the restaurant and tourism sector increased by approximately 54,400 direct jobs with an additional 25,024 indirect jobs which gives a total employment increase of 79,424. This growth will continue if VAT at 9% remains in effect," he said.

Mr Cummins said that the key issues facing the industry are the severity of the threat of Brexit and the need to retain the 9% VAT rate.

“Brexit is the hospitality industry’s most immediate threat in 2018 and that danger will follow into 2019," he said.

We must retain measures such as the 9% VAT rate to allow businesses to remain competitive while we continue to measure the potential damage that Brexit could introduce to the industry.

The RAI created a plan to maintain and grow employment in the hospitality industry with the following key proposals:

  • Counteract the Skills Shortage that Threatens Success of the Industry
  • Minimise the Dangers of Brexit and Sterling Weakness
  • Enhanced Access to Work Permits for Hospitality Staff
  • Reduce the Current Rate of Excise Duty to Encourage Spend in Restaurants
  • A Reduction in Excessive Insurance Costs
  • Enhance Competitiveness With Ireland’s National Tourism Policy
  • Brexit poses 'most immediate threat' to hospitality industry, restaurants association warns

    Meanwhile, the Irish Tourism Industry Confederation (ITIC) has also highlighted the importance of retaining the 9% VAT rate today as part of its eight-year growth strategy.

    The group published a six month progress update on its roadmap for the sector: Tourism: An Industry Strategy for Growth to 2025.

    The strategy estimates that earnings from overseas tourism can increase by 65% to €8.1bn annually by 2025 if the right policies and investment strategies are adopted.

    Its progress update shows that growth continues at 8% in 2018 and the tourism industry is adding significant capacity increases in both hotel developments and air and sea access in the coming years.

    However, the ITIC reiterates that there are "significant challenges" with Brexit posing "a major concern" to the industry.

    ITIC CEO, Eoghan O’Mara Walsh, says that the retention of competitiveness remains vital if Irish tourism is to continue to grow.

    “Irish tourism must retain its competitiveness and ensure that we continue to offer tourists good value for money. There is an onus on both the industry and the Government to manage costs accordingly.

    In this regard maintaining the 9% tourism VAT rate is critical – with Brexit looming the last thing the sector needs is an increased VAT rate which would depress demand, damage the sector, and hit regional Ireland particularly hard.

    Of the 51 policy recommendations outlined in the ITIC 2025 Strategy, six have already been achieved with another 32 in progress.

    In terms of Budget 2019, the ITIC strategy highlights the importance of retaining the 9% VAT rate and advocates that €50m more per annum should be committed to tourism state agencies to increase overseas marketing and industry supports.

    Digital Desk

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