With bookings plummeting at hotels across the region, the chair of the Galway branch of the Irish Hotels Federation has said that Government has to intervene urgently to saves thousands of jobs at severe risk of being lost.
Since the announcement September 15 of revised Government plans for restrictions, the weekly rate of new bookings for hotels has plummeted by 67% across the country - representing an enormous blow to Irish tourism at a time when the sector is struggling under immense financial difficulties.
Meanwhile the results this week from the Central Statistics Office (CSO ) show number of overseas visitors to Ireland for the month of August dropped by 84% year on year, demonstrating the severe challenges facing Irish tourism which would normally rely on overseas visitors for 70 percent of revenues.
John Ryan, Chair of the IHF Galway Branch has told the Advertiser that Government intervention is critical if the jobs and businesses are to be saved.
“It is now ‘make or break’ time. Urgent and unprecedented intervention from the Government is required to support tourism businesses and safeguard thousands of jobs throughout the sector. This must form a central plank of the Budget due to be announced next month.”
“Prior to Covid-19, Galway’s tourism and hospitality industry supported 20,900 jobs and generated €910 million in revenues annually for the local economy. We are now facing a deepening crisis with 15,400 tourism jobs across Galway at risk this year and local tourism revenues forecast to drop by €680m as businesses fight for survival.
“The outlook is exceptionally difficult and highlights the requirement for urgent immediate sectoral specific measures for tourism. This situation is nothing short of disastrous for our sector with serious implications for the tourism industry and wider economy. We are calling on the Government to implement sector specific measures as a matter of urgency. These should include enhanced employment subsidies, a reduction in tourism VAT, extended waiver of local authority rates and greater access to banking finance,” he said.
Mr Ryan added that the urgent Government measures required to safeguard Irish tourism include:
— Employment Wage Subsidy Scheme (EWSS ) – if jobs are to be retained, the EWSS rates of support must be increased to the previous TWSS levels of €350/€410 per week for businesses that can demonstrate a 50% reduction in turnover for a 12-month period to 31 March 2021. The Period for calculating the existing 30% reduction should also be extended on a similar basis. This would make it possible for employers to retain staff during the difficult winter/spring months ahead and to facilitate training and upskilling structures designed to allow employees get personal benefit from this challenging period and to help the industry prepare for post Covid-19 recovery opportunities. Payments should be made on a weekly basis to assist with cashflow. The scheme should be continued until the impact of Covid-19 restrictions has fully abated.
— Reduction in tourism VAT to 9% – permanent restoration to 9% to assist recovery and secure a viable and sustainable future for tourism. Reducing VAT will not only provide a stimulus in the Irish economy but also improve our competitiveness as an international tourism destination. VAT on Irish Hotels is currently the second highest in Europe and higher than 30 European Countries.
— Liquidity Measures - Additional liquidity measures are required to help fund hotels during the coming months as a result of the cash flow lost out due to Covid-19 restrictions, including extension of the moratorium on bank term loans from 6 months to 12 months.
– Local Authority Rates Waiver - The waiver period should be extended for tourism businesses to coincide with business interruption due to Covid-19 and for a minimum of 12 months. After that, payment of local authority rates should be based on reduced levels of activity due to the crisis and until the industry has recovered.
— Testing Regime – As an island nation with an open economy, we have to restore international travel safely as soon as possible. This requires an urgent alignment of national travel policy with the framework being adopted by the EU. This should be backed up by an effective tracking, tracing and testing regime must be introduced to facilitate this and to protect the health and livelihoods of all.