Finally, a new Government nearly two months after the general election. It looks very like the old one albeit this time with the addition of independents at the expense of the Greens. However, if the faces around the Cabinet table have a familiar look, the policies that they are due to implement are quite different from the viewpoint of Irish tourism, the country’s largest indigenous industry and biggest regional employer.
And that’s quite a change in fortune. The tourism and hospitality sector was down in the dumps at the tail end of the last administration. Escalating business costs, no return of the preferential 9 per cent VAT rate, an intractable passenger cap at Dublin Airport and tourism drifting in a six-headed department.
Now tourism chiefs are in a more chipper mood. In theory, the Programme for Government addresses the key issues that the industry had raised pre-election: moved to an economics ministry, a commitment to reduce the hospitality VAT rate, employer PRSI reform, and a stated intent to lift the Dublin Airport cap. Not bad at all.
Furthermore, an SME test will be conducted to scrutinise new legislation for its impact on business. Hopefully, as a result the pace of state-induced costs and regulations will moderate and the erosion of Irish competitiveness will reduce.
As important as competitiveness is an arguably more critical issue for the Irish economy – connectivity. With no bridges, tunnels or roads off the island, air access is of strategic national importance. The mood music on lifting the passenger cap at Dublin Airport seems much more positive but the incoming Government has not stated how it intends to deliver this.
If not addressed it will undermine all the lofty economic promises being bandied about. There is an onus now on new Minister for Transport Darragh O’Brien, himself a Fingal TD, to work out a pragmatic solution to give Dublin Airport headroom to grow. Cork and Shannon airports must expand too, and state aid rules should be urgently aligned with EU permissible levels, but further growth at regional airports will never compensate for lost business to Ireland as a result of Dublin’s restrictions.
From tourism woe to a more positive perspective – how was it done? Industry leaders can take some credit in a determined strategy of case-making, lobbying and advocacy. Crucially, rather than a whinge, constructive solutions were tabled, with effective use of economic data. The tourism and hospitality sector’s importance to regional Ireland certainly helped and the restaurant-led protest to Dáil Éireann before the election grabbed attention. Politicians heard the message clearly and responded appropriately.
[ Hospitality should be moved to an economic ministry by incoming governmentOpens in new window ]
Put simply, politics belatedly realised that tourism matters. A €10 billion industry, most of it export-driven with foreign revenue circulating nationwide, a large tax take, and employing one-in-10 around the country. Tourism in the 34th Dáil will be in a newly configured Department of Enterprise, Tourism and Employment, testament to the fact that the sector will now be thought of as an engine for national growth and regional balance.
That is what tourism leaders had wanted for some time. State agencies, Fáilte Ireland and Tourism Ireland will sit alongside the likes of Enterprise Ireland and the IDA, and decisions and policy should be formulated by ministers and civil servants primarily with an economic lens.
Interestingly, the Programme for Government calls for a new national tourism policy even though the current one was only published in November. The call for a Year of Invitation seems an attempt to repeat the success of the Gathering back in 2013 and industry leaders will be keen to discuss these issues and others when they meet the new Minister.
[ From the archive: Tourism industry hails 2013 as a successOpens in new window ]
The Irish tourism industry wishes the new minister every success in such an important brief. The previous two tourism ministers lost their seats and Peter Burke will be conscious that the commitments in the Programme for Government need to be turned into a reality. Minister and industry leaders must also work hand-in-glove to help businesses deliver on their environmental obligations and commitments to carbon reduction.
Despite a more positive domestic political context the outlook for Irish tourism remains mixed. Business from the key North American market is expected to stay robust despite President Trump’s talk of tariffs and trade tensions. A strong dollar and excellent transatlantic air access should mean the value and volume of US business remains healthy. However, the key markets of Britain and Europe, with their respective economic and political woes, are expected to be softer.
Lobbying is a journey not a destination and no doubt there will be setbacks on the road. However, the new Programme for Government charts a policy roadmap for tourism’s success.
Now for the difficult part – implementing it.
Eoghan O’Mara Walsh is chief executive of the Irish Tourism Industry Confederation
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