Without over-dramatising it, the budget was the most important day in the history of Ireland’s proud tourism industry. Budget 2021 at home and an international travel agreement at the European level were both hugely important to thousands of businesses and tens of thousands of jobs.
The good news is that Ireland, along with the rest of the EU member states, signed up to a common framework that should in time, and assuming Ireland gets its act together on pre-travel testing, allow for the safe reopening of international inbound tourism.
When Ministers Paschal Donohoe and Michael McGrath stood up in the Convention Centre, Ireland’s tourism and hospitality industry paid very close attention. For months the industry has been highlighting the disproportionate impact of the Covid pandemic and resulting Government restrictions. The lack of overseas tourists, as a result of the effective international travel ban, has cost the tourism industry nationally a whopping €27m per day over the summer. Cork and Kerry alone have lost €1.3bn of very valuable international tourism revenue this year.
The Vat cut to 9%, the financial scheme of up to €5,000 per week for businesses that have been closed or heavily restricted, and the €50m business continuity grants package to be administered through Fáilte Ireland are all to be welcomed. The devil of course is in the detail. Regrettably, the financial support package falls short of what is needed but it will help over the next few months as tourism and hospitality businesses cling to survival.
Disappointingly the wage subsidy scheme, although extended, was not enhanced in value. This means that layoffs and unemployment numbers will continue to rise as tourism will not be able to afford to maintain staff numbers with demand at such negligible levels.
On the industry’s prompting, the last Government had set up a Tourism Recovery Taskforce in May. Minister Catherine Martin brought the task force’s report to cabinet last week and the survival recommendations were plainly taken on board. Much more, of course, will be needed but Budget 2021 was an important first step and should give businesses an overdue acknowledgement that Government understands the crisis engulfing it.
The next six months will be massively challenging and many tourism and hospitality enterprises will become enforced seasonal businesses as they go into hibernation over a long and cold winter. The hope is that Government support can be maximised and drawn down so that those same businesses are able to open and trade once again in the spring when demand will hopefully begin to pick up.
If the Budget 2021 measures are important in helping Ireland’s tourism industry survive this existential crisis then crucially further support will be needed as both Covid and a hard Brexit will continue to wreak havoc. Budget 2021 was an important initial move on the long road to stabilisation and recovery.
–Eoghan O’Mara Walsh is CEO of the Irish Tourism Industry Confederation