BUDGET SUBMISSION:TOURISM IN IRELAND is unlikely to come out of the doldrums for another two years, and the Government should ensure that December's budget doesn't make life harder for the travel sector, according to the Irish Tourist Industry Confederation.
The organisation, which has made the remarks in a submission to the Minister for Finance, says demand for home holidays will be adversely affected in 2010 and 2011 and is unlikely to improve much before 2012. “Even if volumes begin to recover before then, low prices will keep revenue growth to a minimum,” it states.
Although a return to growth is forecast for the US and other key markets next year, the submission says that tax increases and wage cuts abroad make it very unlikely that consumer spending and demand for travel will rebound quickly.
It also predicts that airlines will cut even more seats in the next few months and that this, coupled with rising fuel costs, will force up airfares next year.
Higher departure taxes and carbon taxes abroad might also put people off travelling, it says, although the organisation adds that the UK’s air-passenger duty, which is due to increase sharply over the next two years, could benefit Ireland by encouraging more British people to take holidays that involve ferry travel.
The confederation says the indicators for this year “are almost universally poor”, with the number of visitors to Ireland down by more than 10 per cent up to the end of July. The fall from Britain has had the biggest effect, accounting for 67 per cent of the total decrease.
The confederation wants the Government to help the hotel industry get rid of 12,000 excess rooms. “If this reduction is not achieved through an orderly restructuring of the sector, it will happen in a chaotic fashion which will cause lasting damage,” it warns. “Possible measures might include conversion of properties to other uses, and changes in the regulations governing hotel capital allowances to allow investors to exit early and their hotels to close.”
The organisation is also calling for the immediate scrapping of the air-travel tax, a 10 per cent cut in public-sector and local-authority charges and the protection of the overseas marketing budget.
