By Pádraig Hoare
The “whopping” drop in UK visitors in September reinforces the need for the Vat hike from 9% to 13.5% announced in the budget to be postponed for 12 months.
That was the call from Eoghan O’Mara Walsh, chief executive of the Irish Tourism Industry Confederation, who said the hike is coming as continued Brexit uncertainty has a tangible effect on the industry.
He said that although the CSO’s monthly tourism numbers showed September is up 2% year on year, it was driven by strong US and European numbers, and that the single biggest market, Britain, is down a “massive” 9% for the month.
“The British performance is of great concern to the tourism industry. The numbers highlight a worrying development in the British market which is down a whopping 9% in September,” said Mr O’Mara Walsh.
“As Britain is Ireland’s largest source market for tourists this is extremely concerning for the Irish tourism industry and shows that the Brexit impact is already real and material.”
Mr O’Mara Walsh said Cork and the south-west in particular are heavily exposed to a fall in British visitors.
Thousands of jobs in Cork and Kerry could be adversely impacted by the Vat restoration, with 34,000 employed in the industry in the south-west, he said.
“The 50% hike in Vat directly imposes a €466m tax on the sector at the very time that Brexit is coming to pass. [The confederation] reiterates its call for the Vat hike to be deferred for 12 months to allow for a clearer picture on Brexit to materialise and for the sector to make necessary adjustments,” he said.
The 9% Vat rate, which was lowered from 13.5% during the height of the recession to boost hospitality and tourism, came under fire from critics who said before the budget that it outlived its purpose, considering the resurgence in the fortunes of the sector.
According to Department of Finance figures, estimates show that restoring the 13.5% rate for all businesses favoured by the lower rate since 2011 will result in an additional €527m in revenues to the State.
It has cost the State €2.7bn since its introduction, according to the department assessment.