Wage support scheme for tourism sector should be extended

Group outlines tourism recovery recommendations to the Minister

The Recovery Oversight Group recommends the 9% VAT rate for the hospitality sector remains in place until 2025.

The State's wage subsidy scheme should be maintained for all businesses until at least the end of June according to the Government's tourism recovery body.

The group tasked with implementing the Tourism Recovery Plan has recommended that the Employee Wage Subsidy Scheme (EWSS) should remain in place until the end of the second quarter and be maintained until the end of the year for businesses where turnover is down 50% or more.

Other recommendations include maintaining the Covid Restrictions Support Scheme (CRSS) and the continued waiving of local authority rates until the end of 2021. 

The Government reduced the VAT rate for the hospitality industry from 13.5% to 9% in the last Budget with the change to remain in place until the end of 2021. However, the Recovery Oversight Group recommends that this reduction should be extended until 2025 to provide certainty for businesses in pricing in what it says will be a "hugely competitive tourism environment" when international travel resumes.

The Group also recommends a revision of the Stay and Spend initiative that provides a tax credit of up to €125 for holiday accommodation and eat-in food or during. The review will aim to make the scheme more consumer-friendly and extend the qualifying period to the end of 2021.

Chaired by Nóirín Hegarty, the Operations Director of Lonely Planet Ireland, the Recovery Oversight Group includes a number of senior hospitality leaders including the CEOs of Tourism Ireland, Fáilte Ireland and B&B Ireland. 

The creation of the group was a key recommendation in the Tourism Recovery Plan that was submitted in September. Its role is to oversee the implementation of the Plan and monitor the sector’s recovery from the Covid pandemic.

Submitting the recommendations to the Minister, Ms Hegarty said the challenges facing Ireland's tourism industry have deepened since the group was formed.

"We believe that the existential risks to many parts of our sector have only increased since the Recovery Plan was drawn up," Ms Hegarty said.

"Whilst it is inevitable, unfortunately, that some businesses may not come through the pandemic, a significant level of business failure will have far-reaching consequences for the recovery and the economic and social sustainability of many areas with few alternative options for employment."

Accepting the report, the Minister for Tourism Catherine Martin said she will bring the report to the Hospitality and Tourism forum for consideration.

"While the pace of recovery is uncertain I am sure that with appropriate supports tourism can return to providing sustainable employment and generating revenue for the economy," the Minister said.