Tourist chiefs call for competitive strategy

There were today calls on the Government to act to make the tourism industry more competitive.

A study by the Irish Tourist Industry Confederation (ITIC) released today called for a national strategy to save the industry from a sharp decline in business.

It said that Ireland’s tourist industry was at a “turning point” due to the changing international climate for tourism and the current economic environment, and called for a new Tourism Development Strategy to return the industry to growth.

The study referred to a recent Forfas report which found Ireland to be the second most expensive country in the Eurozone, after Finland.

ITIC’s report was prompted by factors including the changed international environment for tourism and challenges to Ireland’s market position, which it said caused tourism growth to slow down.

Tony Kelly, Chairman of ITIC, said these factors, together with extreme pressure on tourism due to high domestic inflation levels and rising input costs, were damaging Ireland’s international competitiveness.

He said the study was also prompted by a view within the industry that tourism did not receive the same “serious examination and consideration” from policymakers as other sectors of the economy.

Areas the study said should be addressed included prices, taxation policy towards the industry, marketing, quality of service and the development of new tourism regions.

The study was commissioned by ITIC and carried out by the Economic Consultants, Tansey, Webster, Stewart and Company. It was being submitted by ITIC to Government with a call for immediate action.

The ITIC said the strategy should be viewed as a high priority by Government and recommended it be completed within seven months.

Its calls were later echoed by Fine Gael, which welcomed the report, saying VAT and insurance costs “must be reduced to ensure future of tourism“.

Jimmy Deenihan, the party’s spokesperson on Arts, Sports and Tourism, called on the Government to take action to ensure Ireland’s continued success in terms of tourist numbers and revenue generated by tourism.

He said: “This report confirms what Fine Gael have been saying for some time about the future direction of Irish tourism – the Government must act immediately to make the Irish tourism industry more competitive, by reducing the rate of VAT on tourism products.

“Our current rate is 12.5%. In France, one of our main competitors, the rate is only 5.5% and in Spain it is 7%. Added to this is the spiralling cost of insurance, which will force many tourism operators out of the business in 2003.

“All of this makes it very difficult for our tourism sector to be competitive and it is in the hands of the Government to remedy this situation.”