July is ‘festival season’ in Galway with the local economy poised to receive a major economic boost from visitors to the Galway Film Fleadh, Galway Arts Festival and Galway Races. However it essential businesses create competitive and attractive prices for the public and take advantage of the new VAT rate if the annual high attendance to be sustained during the current recession.
“Galway tourism is built on festival foundation,” says Galway Chamber of Commerce chief executive officer Michael Coyle. “One shudders to think, especially in the current climate, about having a tourist season in Galway without the festival programmes.”
It is understood the Galway Races attracts between 170,000 and 200,000 people and brings an estimated €50 to €70 million into the local economy - despite the impact of the recession over the last three years. In 2009 the Galway Arts Festival generated €19.5 million for the local economy while in 2010, 158,000 people attended the festival with more than 50 per cent being visitors to Galway. Festival managing director John Crumlish is also confident that this year’s festival will result in similar monetary and attendance figures.
The Galway Film Fleadh recorded more than 15,000 admissions in 2009. This rose to 18,000 admissions last year. The fleadh is worth an estimated €5.2 million to the Galway economy and fleadh managing director Miriam Allen expects that for this year, admissions will be up to 20,000 and that the economic benefit will be in the region of €5.5 million.
Mr Coyle says the Galway festival programme runs from April to November and includes “very high quality, innovative festivals”, such as the arts festival, Cúirt, the Oyster Festival, TULCA, the Galway Sessions.
“There are economic benefits to the festivals given that people are coming to participate and to watch. More often than not they leave with a positive taste in their mouth, and they want to come back next year and bring a friend.”
Howevcr, he says, there is an emerging reality within business, particularly within the hospitality sector that the days of higher prices are gone. “It’s a highly competitive market, there is over capacity out there. These days you will still be able to get hotel accommodation on the Tuesday and Wednesday of Race Week unlike a few years ago.
“However go around town and you will see early bird menus, offers, discounts of 50 per cent and 70 per cent. Business is responding and there is a lot of good value and quality out there for consumers.”
This month the Government introduced a new VAT rate for a range of hospitality and tourism sector services, reduced from 13.5 per cent to nine per cent, and Mr Coyle is calling on Galway businesses to embrace the new rate, which he feels is a ‘win-win’ situation for both business and the public.
“It’s a very positive move and very clever,” he says. “Perception is important and it will create a positive taste in the mouth. It will have a positive impact on spending at a time where consumer confidence is low.
“I think it will influence decisions in relation to job creation. I would call on all businesses to endorse and adopt this and pass on the benefits to consumers. It is a positive marketing opportunity as the lowering of VAT means lower prices.”
Labour councillor Billy Cameron is also urging businesses to pass the savings from the cut in VAT on to consumers.
“Ireland is seen as a high cost destination, so it is up to businesses to encourage more business by reducing their prices in line with the savings they will make through this VAT reduction.”