THE latest industry survey* from the Irish Hotels Federation (IHF) reveals a collapse in hotel bookings on foot additional Government restrictions due to Covid-19.
Hotel room occupancy rates across the Mid-West are at 21% for October and 11% for November based on business currently booked.
Since the Government’s revised 5-level plans for restrictions were announced last month, weekly rates of new bookings for hotels have plummeted across the country, with cancellations effectively offsetting any new business over the last week.
This represents an enormous blow to Irish tourism at a time when the sector is struggling under immense financial difficulties.
Meanwhile recent results from the Central Statistics Office (CSO) show an 84% drop in overseas visitors to Ireland for the month of August year on year, demonstrating the severe challenges facing Irish tourism which would normally rely on overseas visitors for 70 percent of revenues.
Dermot Kelly, Chair of the IHF Shannon Branch said: “It is now ‘make or break’ time with the situation having deteriorated further in recent days. The collapse in new bookings is extremely worrying and adds to an already exceptionally challenging environment.
“This is a direct consequence of additional Government restrictions and points to a very difficult number of months ahead.”
“Existing supports for the tourism industry are totally inadequate given the current restrictions. Urgent and unprecedented intervention by the Governmentis 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 this month and should include enhanced employment subsidies, a reduction in tourism VAT, extended waiver of local authority rates and greater access to banking finance.” he said.
Commenting on the impact of role of overseas tourism and Shannon Airport, Mr Kelly said that it is imperative that the airport receives the necessary policy and financial supports required to ensure it continues to provide air access to key international markets.
“We are hugely concerned about the recent decision by United Airlines and Delta not to resume flights from Shannon International Airport in 2021 and the risk that Aer Lingus will move aircraft serving UK and US routes to other airport hubs.
“This is further compounded by Ryanair’s threat to close their Shannon base. If these hubs are closed this will have a detrimental impact on the West and Mid-West regions for future growth of regional Ireland.
“We must focus on ways to restore international travel safely as soon as possible – a market that equates to 70% of our market base annually. In immediate term, this will require an urgent alignment of our national travel policy with the framework being adopted by the EU. This must be backed up by an effective testing and tracking regime to facilitate safe travel and protect the health and livelihoods of all.”
“We’re calling on government to implement fully the recommendations of the Aviation Recovery Taskforce and deliver targeted supports to Shannon International Airport so that we can retain and develop international connectivity into the region. Failure to support Shannon Airport runs the risk of long-term damage to the tourism industry and the wider economy of region.”
Economic contribution of tourism – Limerick and wider region
Tourism plays a vital economic role across Limerick and the wider region. Prior to Covid-19, Limerick’s tourism and hospitality industry supported 11,500 jobs and generated €327 million in revenues annually for the local economy. Limerick is now facing a deepening crisis with 8,500 local tourism jobs at risk this year.
The impact is even more stark across the wider region taking in Limerick, Clare, Tipperary and Galway, which up until last year generated a combined €1.6bn in tourism revenues and supported some 50,000 tourism jobs and. Up to 36,000 of these jobs are at risk this year.
Urgent Government measures required to safeguard Irish tourism as part of this year’s Budget:
- 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.
