Deputy Pat the Cope Gallagher has warned that the tourism industry faces significant challenges as a result of Brexit and has called for the retention of the 9% VAT rate to help overcome these difficulties.
The number of UK tourists visiting Ireland has dropped by 6.8% over the last year which highlights the importance of cost competitiveness for the tourism industry.
Pat the Cope added with the rapidly falling tourism visitors from the UK due to Brexit and sterling falling in value which makes it more expensive for them to travel to Ireland.
He said “The current speculation that the incentivised VAT rate is under consideration is not helpful for tourism in border counties at present, the tourism sector is a major employer in rural Ireland and in Donegal in particular.
“While overall tourism numbers may be up, the numbers visiting from the UK is rapidly declining. This is extremely worrying as UK tourists are the bedrock of the Irish tourism industry. The reality is that UK visitors account for 41% of total overseas visitors to Ireland.”
The Donegal TD added that now is not the right time to increase VAT in the hospitality sector.
He said that in order to remain competitive in the global tourism market, Ireland must ensure that the quality of our services remain high, that prices remain reasonable and that access to our ports and airports increases.
“The savings created by the retention of the 9% VAT rate for the tourist sector must be passed on to the consumer. Given the sheer number of visitors from the UK, they cannot be replaced by visitors from other countries. Many smaller tourism businesses in particular will feel the pinch if numbers from the UK continue to decline at this rate.
“The Tourism sector is crying out for a national mitigation plan to reduce the impact of Brexit and global uncertainty on our sector and this is especially the case in the border counties.
“It’s disappointing that Minister Ross and the Government have failed to act and bring in such supporting measures. We need a new overarching tourism policy, to reassure the industry that there is a strategy in place for the consequences of Brexit and we need a support fund for areas that will be hit especially hard from a sharp decline in visitors from Britain and that will include the retention of the incentivised Vat rate for the hospitality sector,” concluded Pat the Cope.
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