/sites/default/files/upload/spectrum_week_2_july_23.pdfHOTELIERS WELCOME RETENTION OF 9% TOURISM VAT RATE

Pro-tourism Budget Measures will Support Creation of Thousands of New Jobs


Tuesday, 13th October 2015: The Irish Hotels Federation (IHF) welcomes the retention of the 9% tourism VAT rate announced today by Minister Noonan as part of Budget 2016. Tim Fenn, Chief Executive of the IHF said the measure continues to act as a vital support for employment growth, building on the 33,000 new jobs created by tourism businesses since the measure was introduced in 2011.


“Today’s budget is very positive for the many thousands of tourism businesses which now support 205,000 jobs across the country – equivalent to 11% of total employment,” says Mr Fenn. “The 9% VAT rate, in particular, is of enormous importance to the industry, helping to level the playing field for Irish tourism when competing with international destinations. As a result, Irish tourism is now on track to create a further 40,000 jobs over the next five years.”


“By any measure, the 9% VAT rate is one of the most successful job creation initiatives in modern times. By bringing our tourism VAT in line with our European competitors, it has contributed to increased tourism demand and significant growth.  Combined with increased air access and the reduction of the air travel tax to zero, the 9% VAT rate will continue to deliver enormous dividends to the exchequer.”


According to recent industry research carried out by the IHF, the vast majority of hotels and guesthouses say the 9% tourism VAT rate continues to have a positive impact on the sector. Some 95% of hoteliers saying the measure will assist them in hiring additional new staff and/or retaining current levels over the coming 12 months. Results show that some 64% of hotels and guesthouses have increased staffing levels over the last year.


Mr Fenn acknowledged the important support provided by Ministers Michael Noonan and Brendan Howlin and by tourism Ministers Paschal Donohoe and Michael Ring in ensuring tourism remains at the heart of the Government’s economic policy and in recognising the valuable role played by tourism in growing the Irish economy and generating increased employment.


Tourism’s economic contribution

Tourism is one of Ireland’s largest indigenous industries and supports approximately 205,000 jobs – equivalent to 11% of total employment in the country. It accounts for almost 4% of gross national product (GNP). Last year, Ireland attracted 7.3 million overseas visitors and total tourism revenue was €6.45 billion, of which foreign exchange earnings in the economy amounted to €5 billion. Overseas visitors are expected to exceed 7.8 million this year. Based on projected rates of growth in overseas visitors, the IHF forecasts that Irish tourism as a whole is now on track to create a further 40,000 jobs over the next five years.





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