ITIC

Coronavirus and Irish tourism

Eoghan O’Mara Walsh, CEO, Irish Tourism Industry Confederation

Tourism numbers to Ireland last year saw their first marginal dip after 8 strong years. Industry leaders thus looked ahead to 2020 with the hope of restoring growth despite Brexit tailwinds.

And then a month ago, from a far-off unheralded district of China, came a respiratory disease that we now know as Coronavirus. In what is a worrying time for all in society Coronavirus is first and foremost a public health issue but undoubtedly it has stark economic and business consequences too and the tourism industry is in the front line.

At time of writing Coronavirus cases in Ireland have increased and there is a serious doubt over whether the Saint Patrick’s Day Festival will go ahead. Should it not this will be a devasting blow for industry as the festival traditionally acts as the launchpad and springboard for Irish tourism whereby Ireland is promoted to a global audience of millions.

As the situation is so fluid and uncertain it is very difficult to put an estimate on the impact of Coronavirus but one thing is certain and that it that it will have a negative effect in the immediate term but also for the rest of 2020. And the impact will be real and material on business. Fáilte Ireland estimate that every €1 million less in spend by tourists equates to a loss of 27 jobs.

Commenting on the Coronavirus impact is all well and good but of more use are policy responses to mitigate its impact. The virus will pass as the weather improves according to medics and tourism will recover but only if the right enabling factors are in place. The caretaker Government, and the various political parties that are tip-toeing around forming a successor administration, need to put together - with urgency and decisiveness - an emergency package to support Irish tourism. Politicians must remember that tourism is Ireland’s largest indigenous industry and biggest regional employer accounting for 1 in 10 jobs nationwide. This emergency package should include a suite of measures including: restoring the Vat rate to 9% to help cut cost for business and stimulate demand; deferring Vat payments for tourism and hospitality businesses in Q1 and Q2 until later in the year when cashflow pressures are less tight; implementing a flighting fund for tourism akin to the “no deal” Brexit fund that was put in place in the last Budget; and increasing overseas marketing budgets so that once the crisis passes Tourism Ireland can aggressively and assertively restore Ireland’s presence in the key overseas markets of North America, Mainland Europe and Britain.

Looking at the manifestos of political parties prior to the election would not fill one with confidence. Sinn Fein wanted to restore Aer Rianta, Labour wanted to move tourism into a non-economic portfolio including Communities & Sport, while Fine Gael called for a Gathering mark 2 in 2023. Fianna Fail were a little more focussed referring to increased investment and apprenticeships. What is now apparent is that following this Coronavirus outbreak, political parties need to get very serious very quickly about tourism and support a sector that is under real pressure.

Ireland’s tourism industry is resilient and has bounced back in the past from periodic external shocks – 9/11, Foot and Mouth, and SARS are clear examples. But in each of these cases enabling factors and policies were put in place so that industry recovered lost ground and delivered regional jobs and exchequer returns.

Over to you Taoiseach Micheál, Leo, or Mary-Lou.