I hope Irish Tourism weathers the storm

I have written a few articles previously about the challenges to the Irish Tourism sector. The issues around VAT, energy costs, staffing, accommodation etc are all well known for operators in the Irish market. In truth even though the most recently ITIC visitor Dashboard is broadly positive when you talk to businesses it doesn't feel like it.

In the last two weeks I couple of my long standing website customers have contacted me to shutdown their websites and they both said the same thing "The numbers don't add up". Its a narrative I am hearing in the Tourism and Hospitality Trade throughout the country when I look online. The ITIC and RAI are screaming from the rooftops that their members are in serious trouble. An article in Business Plus Magazine this week makes extremely stark reading :

• Food-led businesses in Ireland will incur an average of €100,000 in additional costs this year
• Higher sick pay and pension auto-enrolment for what it described as "an unsustainable increase".
• The sector now faces "an existential crisis" due to collapsing margins.
• RAI members found that 74% of businesses do not expect to remain open if the 9% VAT rate is non reinstated

Now I don't know if this threat is exaggerated or deadly real as I do work and talk to people within the Tourism and Hosp sector and the concerns are similar.

The call for a VAT reduction is a complex one. Some in Government highlight price gouging in the Accommodation sector in relation to the case for not reducing VAT. You only have to had to be looking to book a room for the recent concerts and sporting events last week end to find very high prices. But I do recall Failte Ireland CEO Paul Kelly repeatedly reminding the sector to "offer value for money" or be priced out of the market to visitors. The solution in my view is to separate Accommodation and Restaurants like they do elsewhere. The business model for both is simply not the same esp with a abnormal market due to Geopolitical Issues. If that means different VAT rates then so be it - we have worked through changes in business models before and we can do it again.

Global Warming is having a definite affect on Ireland's Tourism sector. Its not that we are seeing very high temperatures (yet) but we are certainly seeing alot more rain in the last few years. We have already had the average monthly rainfall for July and we are only 11 days in. Last July was the wettest year on record. Its obvious that warmer seas mean Ireland will get more rain and for every 1 degree the temp goes up we get 7% more rain. In a country that already gets alot of rain - that is a big problem for tourism. People say "there is no such thing as bad weather - just bad clothing". Well tell that to people who sell ice cream, outdoor activities, drinks in beer gardens and coffee on the sand. As someone who lives in a tourist village by the sea there is an definite difference in domestic footfall on days when it rains and everyone in business suffers.

Finally, our Tourism and Hospitality sector is resilient. But I think the challenges at play here are once in a generation. When a pub or restaurant that has been trading for 30 years suddenly closes we need to ask why. We have had supports in place but we need more. We also need to reduce the buckets of red tape that saw such a low uptake on some schemes. We also need to have a tracker on openings and closures in the sector and not a casual glace. We need to be innovative and I mean really innovative on revitalizing the sector with employment schemes, tax breaks, investment offerings for the sector. Tourism and Hosp once employed around 330,000 in Ireland - by far the largest employment sector and we need to listen to those asking for help in the same way those in other sectors have been assisted for decades.

Storms cloud are still across Ireland ... I don't mean its just the weather.

END.