Hotels Must be included in Employment Subsidy Scheme

Government Must Do More to Support Tourism Enterprises, says IHF

The Irish Hotels Federation (IHF) is calling on the Government to extend the Employment Support Scheme announced today to include hotels and guesthouses. John Power, Chief Executive of the IHF, which represents 1,000 hotels and guesthouses, states that it is disappointing that the current scheme does not apply to tourism enterprises as these are significant employers, with hotels and guesthouses alone employing almost 60,000 people in every single city, town and village in Ireland.

Mr Power states, “As can be seen by recent visitor numbers, Irish tourism has been decimated in recent months as people pull back on holiday expenditure. We’re calling on the Government to recognise the importance of tourism as a major component of the enterprise sector and to prioritise employment and staff retention within our sector. The Government must look again at the scheme announced today and find a mechanism for providing hotels and guesthouses with targeted support. We’re calling for employer PRSI be immediately reduced by 50% for qualifying businesses in respect of staff who have been in continuous employment for twelve months.”

The IHF maintains that tourism should not be taken for granted during the downturn and that by extending the scheme to include the hospitality sector, hotels and guesthouses would meet the criteria set out today by the Government given that:

- Tourism is one of Ireland largest export industries, generating €4.8 billion in foreign exchange earnings in 2008

- The majority of hotels are now facing significant difficulties as a result of the global and financial economic crisis

- The majority of hotels have sound, robust and sustainable business models and business plans that are financially viable in the medium term

- The majority of hotels and guesthouses are capable of growth in the global upturn given appropriate and targeted structural support from the Government

- The majority of hotels have taken significant restructuring measures to improve their competitive position through full engagement at enterprise level on measures to sustain jobs.

“Hotels and guesthouses are labour intensive enterprises and employment costs are a major determinant of competitiveness. Extension of the measures announced today to subsidise staff retention would go a long way toward retaining value skills within the industry and positioning the sector for a return to growth. Given the dramatic decline we are now seeing in overseas visitors, the Government must do more to support struggling hotels and guesthouses which are otherwise viable businesses,“ adds Mr Power.

According to the IHF, tourism is Ireland’s largest indigenous industry, employing over 200,000 people across the country. Notwithstanding the recession, tourism made a direct contribution of €4.8 billion to the exchequer in 2008, representing 4% of overall GNP. The main economic contributions of the tourism industry include:

• €4.8 billion in foreign exchange earnings in 2008 compared to €2.1 billion in 1995 and €4.3 billion in 2005;
• 7.5 million overseas visitors to Ireland in 2008;
• Domestic tourism expenditure of €1.5 billion in 2008;
• Annual national tourism revenues of €6.3 billion
• Almost €2.7 billion in revenues to the exchequer from tourism in 2008;
• Tourism accounted for 4% of GNP
• Tourism industry accounts for 250,000 full-time, part-time and seasonal jobs, of which almost 60,000 are in the accommodation sector alone.
• Greater spread of regional economic activity than most other industries;
• Provides a substantial entrepreneurial resource as the vast majority of tourism enterprises are small and medium enterprises.
• 925 hotels with 60,729 rooms.
• 337 guesthouses with 4,070 rooms.

ENDS

For information:

Eoin Quinn Tel: 01 6760168 / 087 2332191
Weber Shandwick