Tourism chiefs warned of serious headwinds ahead

Ireland’s tourism industry is under “considerable pressure”, with costs, Brexit uncertainty, and the coronavirus all potential headwinds this year, a leading economist has warned.

Tourism chiefs warned of serious headwinds ahead

Ireland’s tourism industry is under “considerable pressure”, with costs, Brexit uncertainty, and the coronavirus all potential headwinds this year, a leading economist has warned.

A survey by the Irish Hotels Federation (IHF), coinciding with the start of its two-day annual conference in Galway, found that the mixed performance in 2019 is likely to be repeated this year and only a third of hoteliers are optimistic about trading conditions over the next 12 months.

Economist Jim Power, who is addressing this year’s IHF event, said while the domestic economy — with rising incomes and lowering unemployment — is broadly supportive of the industry, huge challenges loom.

He said rising business costs, particularly insurance costs, must be tackled and that recruitment and retention of staff is an even bigger challenge.

He said the cost-competitiveness of Ireland’s tourism product “is under serious pressure” and reiterated his stance that last year’s hike in the Vat rate for the hospitality sector was “ill-conceived”. Brexit, he said, is likely to return as a serious threat in the next 12 months.

Tourism Ireland is targeting a 3% increase in revenue, to €5.3bn, from overseas visitors to the Republic this year, and a 1% increase in visitors, to just over 9.7m people.

However, director Shane Clarke, also addressing the conference, said trade war effects, competitiveness, Brexit, and air access — due to a slowdown in the global economy and the coronavirus — are all key risks to achieving that growth.

IHF president Michael Lennon echoed the need for lower insurance costs, urging the legal profession to adopt “a more reasonable approach” to personal injury cases.

“Excessive insurance premiums are continuing to hurt many businesses, with a significant number of hotels this year paying over €1,000 per room. For an industry that is so price-sensitive, this level of cost is completely unsustainable,” he said.

Fáilte Ireland chief executive Paul Kelly said while the threats are real, so are the opportunities. A €10m investment by Fáilte Ireland will open 25 visitor attractions this year.

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