General Election: Irish Hoteliers Call for Decisive Action by Next Government


Thursday 11th February 2016: The Irish Hotels Federation (IHF) today published its tourism policy document for the general election. The four-point plan calls on the main political parties to commit to decisive action in support of continued recovery in Irish tourism. The plan seeks to ensure tourism remains a major engine for economic growth and employment over the next five years, targeting the creation of 40,000 new jobs during the life of the next Government.


The plan – A Strategy for Job Creation and Economic Growth – calls on the next Government to support tourism by addressing a number of key challenges, including:


1.      Providing greater cost competitiveness within the Irish economy

2.      Restoring tourism marketing funding to 2008 levels to support long-term market growth

3.      Allocating additional funding for tourism product and infrastructure

4.      Investing in people, skills and training – including vocational and craft training


As one of Ireland’s largest indigenous industries, tourism is vital for the country’s economic well-being. Irish tourism has created 33,000 new jobs since 2011 and now employs over 205,000 people throughout the country, equivalent to 11% of total national employment. It accounts for 4% of GNP and last year generated €7.3 billion in revenues for the economy and €1.8 billion in taxes – thereby supporting the local economies of every village, town and county.


IHF President Stephen McNally states: “While tourism has made significant progress in recent years, continued growth cannot be taken for granted. Market conditions within the industry remain challenging, particularly outside of the larger urban areas and traditional tourism hotspots.”


“We’re at the early stage of recovery following the downturn and a lot more needs to be done before our industry reaches its full potential for growth and job creation. Challenges include the high cost of doing business in Ireland, particularly around Government controlled costs such as local authority rates, water and energy levies. Significant additional investment is also required to support tourism marketing and product development – areas where funding has been significantly reduced since 2008.”


“Tourism represents an excellent investment for the country and it’s therefore vital that it remains at the heart of Ireland’s economic policy,” says Mr McNally. “We’re calling on the main political parties to commit to a range of pro-tourism policies that bolster Ireland as a leading destination for overseas visitors and holidaymakers. With the right support, this would generate up to 40,000 additional new jobs in tourism businesses across the country by 2021.”


Mr McNally states that the recovery in tourism to date has been supported by a number of important policy measures such as the 9% tourism VAT rate, which has brought Ireland more closely in line with tourism VAT rates in other European countries with which we compete. This has made Ireland more competitive when marketing the country internationally as a tourism destination. Other important measures introduced in recent years include the zero rate air passenger tax, support for improved air access and connectivity, and the liberalisation of the visa regime for visitors from selected markets.


“We’ve also benefited significantly from a number of external factors that have supported growth in overseas visitor numbers. These include economic upturns in our major overseas markets such as North America and Britain and of course favourable currency exchange rates in recent years,” says Mr McNally. “Now is not the time for us to take our eye off the ball, particularly given the uncertain economic outlook for the global economy. We must safeguard the gains we’ve achieved so far and ensure sustained growth over the medium to longterm.”  




1. Greater cost competitiveness within the Irish economy

The international tourism market is exceptionally competitive and every tourism euro spent in Ireland is hard won. As such, the high cost of doing business in Ireland remains one of the most pressing issues faced by tourism businesses. Since 2008, the hotel sector has brought down costs by 24%, and this has been a significant factor in stabilising our industry. On the other hand, the levels of Government-determined costs have remained the same. A focused approach on cost competitiveness is required, including:


  • retention of the 9% tourism VAT rate, which continues to be one of the most successful job creation initiatives in modern times;
  • improved labour cost competitiveness through the reform of income taxes and adjustment of the social insurance structure for lower paid workers;
  • implementing full revaluations of local authority rates for hotels, as provided for under the Valuation Amendment Act 2015;
  • minimising Government-controlled energy and water costs within the commercial sector.


2. Restoration of tourism marketing funding to 2008 levels

Irish tourism has been an excellent investment for the country and must be nurtured if it is to continue to deliver returns for the economy. Every euro spent in destination marketing by the state results in a €34 visitor spend in the country. Since the downturn, however, the funding allocation for tourism marketing and product development has been cut back substantially and tourism bodies are now operating under very constrained budgets.


This loss in marketing ‘share of voice’ risks damaging our brand awareness at a time when Ireland should be investing in tourism promotion and long‐term, sustainable market growth. A restoration of funding to 2008 levels is therefore urgently required to support both Fáilte Ireland and Tourism Ireland to ensure more effective delivery of our tourism product messages into our target markets such as North America, Britain and Continental Europe.


3. Additional investment in Ireland’s tourism product and infrastructure

The long‐term, sustainable growth of Irish tourism is also being jeopardised by a lack of adequate investment in our tourism product and infrastructure. A new five‐year product development plan is required, including the provision of a capital budget of €300 million for tourism‐specific projects over the period. Averaging €60 million per annum, this is equivalent to 1% of annual export receipts from tourism in the years 2016‐2020.


4. Investment in people, skills and training

Following the recent launch of the Apprenticeship Council, hospitality training needs additional resources to support the anticipated increase in employment in our sector. Training policy within the industry should be reformed to focus on continuous education, up‐skilling and equipping people for career progression and development.




  • Over 205,000 jobs in Ireland’s tourism and hospitality sector – supporting one in every nine jobs in Ireland today.
  • Over 33,000 additional jobs created by hospitality and tourism since 2011, accounting for 1 in every 5 new jobs.
  • Potential to create over 40,000 additional jobs by 2021.
  • Tourism accounts for 4% of GNP and €1.8 billion in taxes.
  • Total tourism revenue for 2015 stood at €7.3 billion.*
  • Domestic tourism revenue for 2015 valued at €1.6 billion.
  • Overseas tourism revenue for 2015 valued at €5.7 billion.*
  • Overseas visitors exceeded 8.5 million in 2015.
  • Potential to attract 10 million overseas visitors by 2025.


* includes carrier receipts and revenue from visitors from Northern Ireland






The IHF Policy Document for the general election can be viewed in full here: A Strategy for Job Creation and Economic Growth



Barry Ryan / Eoin Quinn                                Tel: 01 6798600

Weber Shandwick                                           Mobile: 085 728 7326 / 087 233 2191 

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