Wednesday 16^th February 2011

TOURISM NEEDS DECISIVE ACTION FROM THE NEXT GOVERNMENT

Four-Point Plan for Job Creation and Economic Growth Launched by Hoteliers

The Irish Hotels Federation (IHF) today launched its election campaign with a four-point plan (please click HERE to download) which calls on the major political parties to commit to decisive action to support Irish tourism as one of Ireland’s largest indigenous employers. The plan seeks to position tourism as a major engine for job creation and sustainable growth in the economy with the potential to create an additional 20,000 jobs by 2015.

The four-point plan – A Strategy for Job Creation and Economic Growth – calls on the next Government to support tourism by prioritising:

1. Effective marketing of Ireland abroad to encourage more people to visit Ireland

2. Greater cost competitiveness, particularly around Government controlled costs

3. Appropriate financial support for tourism businesses from the banking industry

4. Removal of excess hotel capacity to ensure the overall viability of the sector

IHF President, Paul Gallagher states, “Since 2007, overseas visitors have dropped by 2.2 million per annum, resulting in lost revenues of €1.7 billion. Despite this catastrophic drop, tourism still offers the economy enormous untapped potential to play a significant role in Ireland’s recovery – provided we have the right recovery strategy in place. This needs to be backed up by strong political leadership from the next Government.”

“We’re calling on the main political parties to commit to a co-ordinated approach to tourism that bolsters Ireland as a leading destination for overseas visitors. We believe this would generate up to 20,000 new jobs in tourism businesses.”

The IHF states that tourism remains an enormous indigenous asset accounting for one in ten jobs in Ireland – employing 180,000 people. Unlike multinational corporations, which can move facilities at short notice, tourism is a fundamental part of the fabric of Irish society and culture contributing to the local economies of every village, town and city throughout the country. Nationally, it generates €4.6 billion in revenue with €1.3 billion collected in taxes, representing 3.7% of total tax take.

IHF FOUR POINT PLAN:

1. Marketing Ireland Abroad

A turnaround in Irish tourism will require more effective marketing of Ireland abroad, highlighting the enormous range of cultural and scenic attractions on offer and the tremendous value that exists:

• An intensive, co-ordinated campaign is needed to promote ‘Brand Ireland’ with the support of Irish embassies, state agencies and high profile personalities in the arts, sports, media and other life spheres.
  
  
• A greater focus on gaining market share in Britain, the US, Germany and France needs to be reflected in a transparent re-allocation of resources, budgets and personnel as well as a fundamental re-appraisal of the effectiveness of the current marketing approach in each market.
  
  
• This must be backed up by increased marketing funds to enable Ireland to compete effectively with other international destinations.
  
  

2. Competitiveness

Urgent measures are required to increase cost competitiveness within the tourism sector, including:

• Immediate action to achieve the €551 million in savings identified by the Local Government Efficiency Review Group in July 2010.

• Introduction of an interim emergency provision for a 30% reduction in Local Authority rates applicable to hotels and guesthouses.

• Abolishing the Joint Labour Committee (JLC) system in order to restore competitiveness, remove anomalies and encourage greater flexibility in the labour market.

• Accelerated liberalisation of the energy market to address unsustainable increases in the cost of electricity and gas supplied by state-controlled companies.

3. Credit Availability

A business loan guarantee scheme must be introduced to assist small to medium sized enterprises gain access to adequate levels of appropriately priced credit, which is now critical. The IHF is calling on the next Government to introduce a guarantee scheme similar to that in operation in the UK under which at least 50% of qualifying loans to viable businesses are guaranteed with borrowers paying a small (2%) premium to support the scheme. The IHF also calls for the establishment a reconstruction and development bank or a special division within an existing bank to address the problem of overhanging debt.

4. Removal of Excess Capacity

Overcapacity has the potential to destroy the short-term viability of the overall hotel sector and requires urgent attention. The IHF is calling for the establishment of a high level inter-departmental group to work with the IHF to address hotel oversupply and related issues to ensure sustainability of this vitally important accommodation sector.

ENDS

FOR INFORMATION:

Eoin Quinn/Siobhan Molloy                         Tel: 01 6760168

Weber Shandwick                                       Mobile: 087 233 2191 / 086 817 5066

Irish Tourism – Top Line Facts

• 180,000 jobs in the tourism and hospitality sector or one in every 10 jobs in Ireland today.
• Potential to create over 20,000 additional jobs by 2015.
• Total tourism revenue for 2010 (overseas plus domestic) stood at €4.6 billion.
• Potential to generate €6.2 billion in annual revenue for the economy by 2015.
• Overseas visitor numbers have declined from 6.5 million in 2009 to 5.6 million in 2010. This represents a decline of 2.2 million compared with 7.7 million arrivals in 2007.
• The most serious market reversal has been from Britain, with 1.3 million fewer visitors in 2010 compared with 2007.
• Revenue from overseas visitors in 2010 is estimated to have dropped by about €600 million to €3.3 billion. This represents a drop of €1.6 billion since 2007, when €4.9 billion was earned.
• €1.3 billion in taxes was earned by Government from tourism annually, representing 3.7% of tax revenue.
• The average hotel room rate declined by 30 % since 2007 and is now at 1999 levels.
• It is estimated that the Irish tourism industry is made up of about 15,000 businesses, mostly micro, small and medium sized.