Tourism faces 'devastation' if no State boost

Tourism faces 'devastation' if no State boost
Harbour View, Cork, Ireland. 11th July, 2020. Windsurfer trying to make the most of the calm conditions on a hot and sunny afternoon at Harbour View, Co. Cork, Ireland. - Picture; David Creedon / Anzenberger

Ireland’s tourism industry faces “devastation” if it is not central to the Government’s pending economic stimulus and support package through a Vat reduction and a €1.5bn rescue fund, an industry body has warned.

The Irish Tourism Industry Confederation (ITIC) has urged the Government to put tourism “at the heart” of the July stimulus package, which is expected to be presented next week.

It said more jobs will be lost and more companies will go to the wall – particularly in regional Ireland – without meaningful Government support in the package.

“If the Government does not support the tourism industry in the July stimulus measure then it will be a wilful neglect of a sector that is vital to regional Ireland and will mean widespread business closures and job losses,” said ITIC chief executive Eoghan O’Mara Walsh.

An immediate €1.5bn to support viable but vulnerable tourism businesses through grant aid and liquidity measures tops ITIC’s wish-list. But, it also wants a number of other things; most notably a reduction of the tourism and hospitality Vat rate to 5% from 13.5%, an increase in overseas marketing budgets and the halving of employer PRSI rates.

The industry group has said that even in a best-case scenario, where all of its policy recommendations are delivered, it will be 2024 before Irish tourism gets back to the strong levels it achieved in 2019. It will take considerably longer for tourism to recover without immediate Government help, it said.

Already, since the start of the Covid crisis, an estimated 150,000 jobs have been lost in the tourism sector, which employed 265,000 people directly and indirectly last year. ITIC warned, as far back as March, that the industry was “on the brink” and could see job losses top 200,000 if action was not taken.

ITIC has also criticised the Government’s planned introduction of a ‘green list’ of safe countries to travel to and from without the need for quarantine – which is expected next week also - and has called for the “blunt, ineffective and flawed” current 14-day quarantine rule for incoming passengers to be replaced by a testing regime.

Chambers Ireland has also warned the Government it has to get its stimulus package right, saying it marks “the last chance” to keep many vulnerable businesses afloat and warning that “half measures…will no longer cut it”.

It said a shallow recession with a so-called ‘V-shaped’ recovery is “unrealistic”, and it is far more likely that the crisis will continue to impact the economy “over a period of years rather than months”.

Both Chambers and ITIC want an extension of the wage subsidy scheme, while Chambers also wants more expansive grant aid and a 12-month waiver on commercial rates for impacted businesses.

“Our asks are not new. These are issues which have been visible since the early days of the crisis and we have consistently called for government to intervene,” said Chambers Ireland CEO Ian Talbot.

Tánaiste Leo Varadkar last week hinted at business tax and commercial rate reductions as well as enhanced grants as part of a “radical” and “far-reaching” stimulus plan.

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