Much of the focus of the impact of Brexit on the Irish economy so far has tended to be on the export sector with the drop in sterling hitting many food exporters in particular. But another industry that has also felt the pinch of currency fluctuation since last June is the tourism sector. The Irish Tourism Industry Confederation in calling on the Government to put measures in place to mitigate Brexit related effects.
Paul Gallagher, chairman of the confederation, said it is difficult to accurately measure the effect of Brexit so far, but the first quarter tourist numbers from the CSO in April will give a better indicator. "The first quarter is not typically a busy time for the British market. The US market has been quite strong in the first three months, but it will be April before we get a clear line of sight."
Mr Gallagher said the worst case scenario, as far as the industry was concerned, was for a so-called hard Brexit and what that would entail. "It would mean customs controls and a hard border. The open skies for British markets would be closed, so travel between Ireland and Britain and Europe and Britain would be impeded. In addition, any unfair competition from liberalisation of the UK market could impact severely on the market," he added.
Mr Gallagher agreed that the industry would just have to deal with whatever emerges from negotiations between the UK and Europe, but he said there were measures the government could put in place to alleviate difficulties that the industry is going to experience.
"The agrifood, construction and manufacturing sectors have seen additional resources in terms of finances or extra manpower. Tourism has yet to see additional resources being put in place," Paul Gallagher said. He rejected the argument that the retention of the 9% VAT rate in the budget was adequate to mitigate Brexit related effects. "We have to make sure that the industry is ready on the ground. That requires market diversification, more funding for the British, European and North American markets. One in nine jobs in the economy is supported by tourism. Even a 10% impact could cost 6,000 jobs and cost €140m," he said.
"The VAT rate at 9% is the correct rate for the industry. 17 out of 19 European countries have a VAT rate of 10% or lower. As a question, it's off the table. We've to protect employment. Tourism can't be offshored so it's important that the Government sits up and takes notice," he concluded.
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