MEDIA STATEMENT

Monday, 28th September 2020: The latest overseas arrival figures published today by the CSO* highlight the exceptionally grim outlook facing Irish tourism and the urgent requirement for additional Government supports according to the Irish Hotels Federation (IHF).

While the figures show an 84% drop in overseas arrivals for August compared to the same month last year, this includes essential and non-tourism travel. The true impact on tourism is even more stark with overseas tourism into Ireland having been completely wiped out since March.

The situation is compounded by a dramatic drop in domestic hotel bookings in recent weeks as the sector entered a quasi-lockdown, including further restrictions around gatherings and the introduction of county-wide measures for Dublin and Donegal. According to a recent IHF industry survey**, additional restrictions have led to a 67% drop in the weekly rate of new bookings for hotels. This represents an enormous further blow to Irish tourism at a time when the sector is struggling under immense financial difficulties.

Hotel room occupancy rates across the country are at 40% for September, 23% for October and 12% for November based on business currently booked. This compared with rates of 89% last September, 81 % last October and 82% last November.

Warning about the imminent risk to tourism businesses and jobs, IHF Chief Executive Tim Fenn states that existing supports are totally inadequate for the tourism industry given the current restrictions. Prior to Covid, tourism supported 270,000 livelihoods, one in ten of all Irish jobs. An estimated 100,000 jobs of these have been lost so far this year and a further 100,000 are at immediate risk without substantial sector specific supports being put in place.

“A severely devastated Irish tourism sector would be a major loss to Ireland’s economy and society for many years to come. This can and must be avoided,” he said. “Our industry is facing a very difficult number of months ahead with many tourism businesses in severe difficulty. Urgent sector specific measures are now required from the Government to support tourism businesses and safeguard thousands of jobs. This must include enhanced employment subsidies, a reduction in tourism VAT, extended waiver of local authority rates and greater access to banking finance.”

Urgent Government measures required as part of Budget to safeguard Irish tourism:

• 1. Employment Wage Subsidy Scheme (EWSS) – if jobs are to be retained, the EWSS rates of support must be increased to the previous TWSS levels of €350/€410 per week for businesses that can demonstrate a 50% reduction in turnover for a 12-month period to 31 March 2021. The Period for calculating the existing 30% reduction should also be extended on a similar basis. This would make it possible for employers to retain staff during the difficult winter/spring months ahead and to facilitate training and upskilling structures designed to allow employees get personal benefit from this challenging period and to help the industry prepare for post Covid-19 recovery opportunities. Payments should be made on a weekly basis to assist with cashflow. The scheme should be continued until the impact of Covid-19 restrictions has fully abated.
  
  
• 2. Reduction in tourism VAT to 9% – permanent restoration to 9% to assist recovery and secure a viable and sustainable future for tourism. Reducing VAT will not only provide a stimulus in the Irish economy but also improve our competitiveness as an international tourism destination. VAT on Irish Hotels is currently the second highest in Europe and higher than 30 European Countries.
  
  
• 3. Liquidity Measures - Additional liquidity measures are required to help fund hotels during the coming months as a result of the cash flow lost out due to Covid-19 restrictions, including extension of the moratorium on bank term loans from 6 months to 12 months.
  
  
• 4. Local Authority Rates Waiver - The waiver period should be extended for tourism businesses to coincide with business interruption due to Covid-19 and for a minimum of 12 months. After that, payment of local authority rates should be based on reduced levels of activity due to the crisis and until the industry has recovered.
  
  
• 5. Testing Regime – As an island nation with an open economy, we have to restore international travel safely as soon as possible. This requires an urgent alignment of national travel policy with the framework being adopted by the EU. This should be backed up by an effective tracking, tracing and testing regime must be introduced to facilitate this and to protect the health and livelihoods of all.