Hotel and guest house owners in Galway met with local political representatives last week to discuss the challenges facing the tourism sector as 2023 approaches.
While there has been a welcome upturn in tourism this year, businesses throughout the country remain in recovery mode, having survived the worst economic shock in recent memory and who are now confronting skyrocketing energy costs and an expected global economic downturn in key markets next year.
Wayne Neilon, Chair of the Galway of the Irish Hotels Federation (IHF), outlined to Galway representatives the crucial importance that everything possible is done to protect and secure tourism livelihoods and support the long-term sustainable development of our wider tourism industry.
“Irish tourism businesses are collectively the largest indigenous employer in the country. Here in Galway, tourism accounts for 22100 of jobs, and €910m of revenue annually.
“Speaking with local TDs and Senators it is clear that they understand the value and importance of tourism to our local communities, but also the enormous impact multiple factors are having on these businesses, right now.”
Mr Neilon said that over recent months, unforeseen challenges have arisen including the continued war in Ukraine, the increasing risk of a global downturn, and escalating business costs and ongoing energy crisis.
He said that this crisis is causing real concern for hotels and guest houses here in Galway.
“Nationally we are seeing hotels reporting increases of upwards of 300% in energy bills compared with 2019 levels.
“This is unsustainable and will inevitably lead to difficulties in relation to future viability of some businesses in the tourism sector.”
Hoteliers also discussed with local political representatives the importance of the 9% Tourism VAT rate and how this is the right rate for the long-term sustainable development of Ireland’s largest indigenous industry, which in 2019 employed 270,000 people and returned over €2 billion to the exchequer in direct tourism-related taxes.
“The current 9% rate is the right rate for Irish tourism in a European context. Increasing the tourism VAT rate by half to 13.5% in March 2023 would make Ireland’s tourism VAT rate the third highest in Europe, far above other European countries where they take tourism seriously like Portugal (6%), Malta (7%) Netherlands (9%),” added Mr Neilon.
“Tourism is an important part of the local economy here in Galway and the continued recovery of tourism and hospitality must be to the fore of Government economic policy as we seek to support these businesses throughout these continued uncertain times.”