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RTÉ News
4 days ago
- Business
- RTÉ News
Warning that tourism in Ireland at 'tipping point'
The Irish Tourism Industry Confederation (ITIC) is calling for the lifting of the Dublin Airport passenger cap, increased Government spending, as well as the restoration of the 9% hospitality VAT rate in order to boost tourism in the country, which it said is at a "tipping point". In its Budget submission, the ITIC warns of "double-digit" declines in tourists coming to Ireland and that the country is overdependent on US visitors. "2025 has been a challenging year," said ITIC chief executive Eoghan O'Mara Walsh. "The North American market has been strong... but other markets, unfortunately, are soft - Great Britain, Continental Europe and even the domestic market are soft." In order to address this, the confederation - which represents 20,000 tourism and hospitality businesses - wants to see annual Government spending on tourism services increased by €90 million to around €340 million. This funding, it said, would support a market diversification strategy to reduce the reliance on American tourists. That would include looking to boost the number of visitors coming here from the likes of Britain and Germany. Mr O'Mara Walsh said Ireland will not be able to compete on price with the likes of Mediterranean countries, but it must work to maintain its value. "Eurostat came out with figures just last month which showed that Ireland was the second most expensive country in the EU - so that obviously finds its way through to restaurant bills, pub bills, hotel bills," he said. "What's key is that we maintain our value proposition and, thankfully, the surveys to date... says Ireland still maintains its value proposition, but it's certainly under pressure. "It's vital that we, as an industry, maintain the quality of our product," he stressed. One thing ITIC feels will help to achieve that is the reduction of the hospitality VAT rate to 9%, with that cut extended to visitor attractions and adventure operators. The Programme for Government pledged such a move but doubt has been cast on it recently, in large part due to the growing uncertainty around the direction of the global economy and the health of Ireland's exchequer finances. "If you talk to tourism businesses up and down the country, costs of business are the big recurring feedback," he said. "Whether that's utilities or energy, or labour or insurance - costs of business are really squeezing margins. "The VAT rate at 13.5% is one of the higher VAT rates for tourism services across the whole of the EU." The Department of Finance has projected that such a cut would cost almost €870m a year, while critics have pointed out that many firms that would benefit are already in a healthy trading position and do not need such support. However Mr O'Mara Walsh said a VAT cut was the easiest way to support a sector was through a VAT cut - though he also would not oppose any attempt to focus the change on specific businesses. "I have no problem if Revenue want to take the McDonald's chains out of the equation and just focus on home-grown tourism and hospitality businesses," he said. "But I think the thing to remember is that margins in this sector are really, really squeezed - we're a labour intensive business, we operate on very thin margins". "When demand is so mixed, and when the outlook is so uncertain, we need as much help as possible," he said. In relation to the passenger cap at Dublin Airport, the organisation notes that 70% of the tourist economy is dependent on international visitors. The cap limits the number of passengers travelling through the airport terminals to 32 million a year. The ITIC is calling for this limit, which is included in the Programme for Government, to be lifted and said this "should happen in tandem with supporting the regional state airports of Cork and Shannon".
RTÉ News
29-07-2025
- Business
- RTÉ News
Tourism industry seeing 'soft' European and domestic markets
Tourism operators across the country are reporting a decline in revenue in every major overseas market this year. The CEO of the Irish Tourism Industry Confederation, Eoghan O'Mara Walsh, said the North American market is doing well, however, "other markets are soft" like Britain, France and Germany as well as the domestic market. "A lot of Irish people are holidaying abroad rather than holidaying at home. Overall, it is a pretty challenging year for the Irish tourism sector," Mr O'Mara Walsh said. Speaking on RTÉ's Today with Philip Boucher Hayes, he said there is a need for the Irish market to diversify as there is an over-dependence on the North American market. He said there were strong growth prospects in continental Europe, but added that there is a lot of French and German business not being picked up at the moment. He explained that matters like the weakening of the dollar and tariff fears do not suit tourism. "Tourism is uniquely exposed to external events, so the US market could be softer next year," he said. However, he said air access is strong, particularly with Aer Lingus, and there is a lot of new transatlantic air access. Dublin is used as a hub airport between the North American bloc and the European continent, which should be good for Irish tourism. "But undoubtedly, we can't depend on a strong US market in 2026. It is pretty good in 2025, but 2026 could be more challenging. Therefore, we do need to fish from other markets," he stated. Eurostat figures from last month put us as the second most expensive country in the EU. The tourism boss said that Fáilte Ireland surveys visitors as they leave Ireland, and thankfully, the majority of people still find the country value for money. "Unfortunately, the German economy, the French economy, the British economy are all struggling and therefore discretionary income is tighter, and therefore the second and third holidays is often sacrificed, and Ireland falls into that category," he said. Mr O'Mara Walsh suggested that Ireland defend and deepen its connection to the US market, but added it had to penetrate other markets. He suggested a "step change in tourism budgets" to allow us to diversify the market and "de-risk". He added that there were costs of business and competitiveness pressures on tourism businesses, and the Government could take measures to allow Irish tourism and hospitality businesses to be more competitive. Mr O'Mara Walsh said there is a lot of capacity constraints on the tourism economy at the moment. "We know there is a Dublin airport passenger cap which needs to be relieved. We know that there is proposed legislation from Government which risks denuding coastal and rural Ireland of holiday homes and self-catering properties throughout the country, a staple of the Irish tourism product," he said. "Aside from investment in what is Ireland's largest indigenous industry and biggest regional employer, there is stuff on connectivity and competitiveness that Government should do to support the sector," he added.
