Irish tourism records first spending decline in eight years

The Irish tourism industry's year started brightly but ended on a gloomier tone amid Brexit strains, higher costs and consumer nervousness, according to a new assessment by the Irish Tourism Industry Confederation (ITIC).

While tourism was worth an estimated €9.3 billion to the Irish economy in 2019, the ITIC said, this was down 1 per cent on 2018 and marked the first decline in the value of tourist spending in eight years.

The fall came despite the number of overseas visitors to the Republic being on track to reach a record high.

The ITIC warned that the industry requires “proactive Government intervention” to sustain its activity in 2020. The umbrella group said Brexit, the return to a 13.5 per cent VAT rate and increased business costs were putting pressure on an industry that employs 265,000 people and contributes an estimated €2.1 billion to the exchequer in tourism-related taxes.

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The Republic earned €6.95 billion from overseas tourism this year, with €5.2 billion of this spent while on holiday and €1.75 billion spent with Irish airline and ferry companies.

The ITIC said an additional €1.9 billion was likely to have been generated in domestic tourism revenue and a further €380 million earned from visitors from the North.

But as the boom in tourism stalled over the course of the year, employment numbers in the sector are down 2 per cent.

"It has been a very mixed year for Irish tourism with strong growth in the early part of the year slowing sharply as 2019 progressed," said ITIC chairwoman Ruth Andrews.

Brexit impact

“Brexit is a major ongoing concern for Irish tourism and if no trading agreement is reached between the UK and EU we could well be facing another cliff-edge, no-deal outcome this time next year,” she said.

ITIC chief executive Eoghan O’Mara Walsh said the no-deal Brexit contingency fund of €40 million announced in the October budget should be released now “to stimulate demand in the crucial early months” of the year.

“Government must also do far more to help business manage costs, including insurance.”

The ITIC, which represents airlines, hotels, restaurants and attractions, estimates that tourism businesses are currently investing €2.5 billion in developing the Irish tourism product. Mr O’Mara Walsh said the Government now needed to act.

While attracting visitors from Britain and continental Europe is expected to remain challenging, the ITIC is optimistic that the key North American market will continue to grow in 2020 as a result of better air connectivity.