MEDIA STATEMENT

29th May 2020: The Irish Hotels Federation (IHF) is urging the Government to introduce measures that will tackle the catastrophic crisis facing many businesses due to the COVID-19 pandemic. Welcoming the positive trend in cases this week, Mr Tim Fenn, Chief Executive, IHF, acknowledged the great progress being made by the Government, the Chief Medical Officer, health professionals and society in general in suppressing the disease.

He said that it was now time to address the need for people to have livelihoods after the pandemic. Mr Fenn called on the Government to urgently seek assistance from the proposed EU Recovery Fund being set up to combat the economic slump caused by the coronavirus pandemic, which is forecast to be the worst in a century throughout Europe. He said a package of specific supports is required that recognises the unique challenges facing Ireland’s largest indigenous industry.

“The June Bank Holiday traditionally marks the start of the holiday season, yet thousands of tourism businesses across the country remain closed due to the pandemic, including 90% of hotels, and the majority of the industry’s 260,000 employees are laid off. With 70 per cent of tourism jobs based outside Dublin, further delays in providing support measures could have devastating implications, particularly for rural Ireland, that may take decades to recover,” he said.

“While the various business and employment supports that have been introduced already are very welcome, they do not go far enough. Some industries, like tourism, have been far more severely affected and face a more challenging road to recovery and this is not being adequately recognised. Tourism proved itself to be a powerful engine for economic growth following the last recession, creating some 90,000 new jobs. With the right supports now, it can be again but time is of the essence.”

Mr Fenn added: “The tourism and hospitality sector was asked to close down in the face of the COVID-19 pandemic. That was the right decision and the health and safety of staff and guests will always be our main priority. However, there must be compensation for those businesses that have been devastated for the common good. When hotels reopen in July, they will be reliant on the domestic market for business. While every guest will be very welcome, the reality is that home grown tourism will not recoup the significant financial loss to the economy of overseas tourism, which last year accounted for over €7 billion in revenue compared to less than €2bn from the domestic market. When the time is right, the overseas market will reopen again for Ireland. In the meantime, specific supports are needed to safeguard an industry that can play a vital role in the country’s economic recovery and rural Ireland in particular.”

Mr Fenn warned against any delay in seeking funds from the EU, saying swift action by other countries will put Ireland at a competitive disadvantage. “One of the lessons learnt from the financial crisis was the requirement to act extremely quickly so that large parts of the economy are not obliterated, with long-term consequences. Tourism is highly competitive. Many major markets with which Ireland competes for tourists, such as France have already announced substantial support packages for their tourism industries, with further supports likely through EU funding. These supports are giving Ireland’s competitors much needed certainty to plan their recovery.”

Four Urgent Measures Immediately Required - the IHF is calling on the Government to implement the following measures as a matter of urgency:

• 1. Liquidity Measures tailored to the specific challenges facing tourism businesses to help them survive and restart: i) a direct business grant scheme; ii) 0% interest on Government guaranteed finance; iii) a Government supported scheme for deferral of capital and interest payments for a period of one year; iv) re-assessment of the SBCI loan system to ensure appropriate products are available for tourism and hospitality.
   
• 2. Reduction in tourism VAT on a permanent basis to assist recovery and secure a viable and sustainable future for tourism. International competitiveness is an urgent issue for Irish tourism with hotel VAT now higher than 28 European countries we compete with.
   
• 3. Continuation of the job subsidy scheme for tourism and hospitality during the crisis. Businesses will be operating at severely constrained levels of activity when they re-open. The Covid–19 Wage Subsidy Scheme should be continued until the impact of physical distancing and mass gathering restrictions has abated.
   
• 4. Local Authority rates and charges – the three-month 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 Covid-19 crisis.