Thursday September 24, 2020

Comment: Our tourism sector faces disaster without more government help

The industry is facing up to 200,000 job losses over the next 12 months unless the government changes tack on its travel policy – comprehensive testing of passengers could be the way forward

11th August, 2020
Tourists in Temple Bar in Dublin before the arrival of Covid-19 hit: tourism businesses in the capital and throughout the country are facing a bleak future without overseas visitors

It has been accepted by commentators, economists and even the government itself that Ireland’s travel, tourism and hospitality industry has been worst hit by the Covid-19 pandemic and will have one of the slowest recoveries.

As such, it’s hard to believe that there are not more support and policy initiatives to provide succour to an industry that, pre-pandemic, was the country’s largest indigenous sector and biggest regional employer.

This is a sector that was shut by government decree for four months with no income (and is still closed for many publicans) and then only partially allowed to reopen with reduced capacity and no international tourism.

Over the August bank holiday weekend, Dublin was deserted as many Irish people sought a staycation in the regions. There were no international visitors to be found on the capital’s streets either due to the effective closure of Ireland to inbound tourism.

Regional Ireland knows only too well that any domestic market bounce will be short-lived and will end abruptly once the schools return. At that point, the 20,000 tourism and hospitality businesses will be facing into a long, cold winter.

For as long as international visitation is effectively blocked into Ireland by government travel restrictions – latest figures from the Central Statistics Office show a 97 per cent drop in arrivals compared to last year – the industry is facing an extraordinarily difficult future.

The Irish Tourism Industry Confederation estimates that unless the government changes tack on its travel policy, tourism is facing up to 200,000 job losses over the next 12-month period, with regional Ireland to be hit hardest. Is the government really prepared to preside over this and see the devastation of two of Ireland’s world-class industries, tourism and aviation?

Many within the tourism industry had hoped that the July stimulus package would be meaningful for businesses, but they were left disappointed. Any positive measures were too tentative to make a meaningful difference. The tourism Vat rate was left unchanged, leaving Ireland at a competitive disadvantage to the rest of Europe, most notably to Britain whose tourism Vat rate is now nearly a third that of Ireland’s.

Most frustratingly of all was the design of the “Stay and Spend” incentive which is supposed to stimulate the domestic market. Instead of a consumer-centric, easily-redeemable voucher for the home holiday market, the government announced, without any consultation with industry, a tax rebate scheme that is likely to prove complex and unwieldy. Limiting it to hotels and restaurants means that a large swathe of the tourism industry is excluded.

The biggest help for Ireland’s tourism and hospitality industry would be to recommence international tourism in a safe manner. It is estimated that the industry is losing €27 million per day while international visitation is suspended. If it is widely acknowledged that we will be living alongside Covid-19 for the foreseeable future, is international travel and tourism to be suspended for the whole duration?

Ireland has a hard-won and well-deserved reputation as a leader in aviation but the sector is also under immense pressure. Aer Lingus recorded a loss of €316 million in the first half of the year, and Ryanair has unsurprisingly called this period the most challenging in its 35-year history, while regional airports around the country are desperately in need of state aid to simply keep the lights on.

All this could change with a change in government travel policy. The current government approach to international travel and tourism is ineffective, wholly inadequate and leading to an economic apocalypse for the country’s aviation and tourism industries.

There is no doubt that public health and suppressing Covid-19 comes first, but Ireland, for broader economic reasons as much as for tourism, must recommence international travel in a safe manner.

The only way to allow for international inbound travel and tourism to recommence and for public health to be assuaged is a comprehensive testing policy both before passengers arrive and as they leave our shores. Other countries, most notably Germany, have moved successfully in this direction and it is high time that the Irish government committed to implementing a similar policy.

Waiting for October’s budget, and the accompanying national economic plan, to secure positive initiatives will be too late for many in Ireland’s travel, tourism and hospitality industry.

Eoghan O’Mara Walsh is chief executive of the Irish Tourism Industry Confederation

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