The tourism industry has reacted positively to Budget 2018, welcoming the retention of the concessionary 9% VAT rate and the allocation of €112m to tourism develpment an
The Budget has allocated €2.5m specifically for digital tourism marketing as a result of Brexit.
Fáilte Ireland is also getting €1m for the development of a brand for the country's Lakelands region.
"While there is still a great deal of uncertainty about the outcome of the Brexit process, tourism continues to be a national success story," said Paschal Donohoe yesterday.
The Minister for Transport, Tourism and Sport Shane Ross and Minister of State for Tourism and Sport Brendan Griffin welcomed the additional funding agreed by the Government for their Department’s programmes out to 2021. Total funding for the Department’s programmes next year is €2.03 billion, which is €215m more than the 2017 allocation.Most of the increase will bhe spent on transport.
'This allocation will provide the resources to target investment in our transport network, support our tourism sector and promote sport to drive our country forward', Minister Ross said..
Both Ministers will outline in further detail the allocation of these funds and the increases across the Capital Plan out to 2021 to-day.
In his budget speech, Minister Donohoe acknowledged that while Dublin’s hospitality offering is at an all-time high, “VAT policy cannot be decided on the basis of one location only but in the context of the national interest”. “Accordingly, I have decided not to change the VAT rate on the tourism and services sector in Budget 2018,” he continued.
Joe Dolan, President of the IHF (pictured) said the rate has been instrumental in the recovery of the tourism industry, which has created approximately 60,000 new jobs since the measure was introduced in 2011.
“Tourism is an indigenous export industry which not only supports approximately 230,000 jobs – equivalent to 11% of total employment in Ireland – it also plays a vital role in addressing the regional imbalance in our economy. The decision is a critical vote of confidence in the tourism industry at a time when it faces significant risks, most notably from Brexit,” he said.
Adrian Cummins, Chief Executive of The RAI, commented: “The Retention of VAT at 9% into 2018 and beyond is crucial, not only to the sustainability of restaurants and businesses in the tourism sector but also to job creation and the continued growth of our economy.”
Mr. Cummins noted that he believes Ireland to be operating in a three tier economy – with Dublin powering ahead in many areas, and many regional tourist hotspots reporting strong business, albeit on a seasonal level, while rural and border counties continue to experience difficult trading conditions. A 9% VAT rate, he stated, is “Crucial to these parts of Ireland”.
Fáilte Ireland’s CEO, Paul Kelly, said: “An emphasis on greater competitiveness, allied with the lower VAT rate and Fáilte Ireland’s continued investment in tourism product, will create the necessary environment for the tourism sector to generate additional revenue and deliver more jobs in the year ahead.
“The lower VAT rate allows Irish tourism to compete with overseas destinations and to provide our visitors with the good value to match the quality of our welcome. The continuation of this measure will help sustain growth but it must also be accompanied by a renewed effort on the part of the industry to maintain competitiveness and avoid price inflation. An emphasis on greater competitiveness, allied with the lower VAT rate and Fáilte Ireland’s continued investment in tourism product, will create the necessary environment for the tourism sector to generate additional revenue and deliver more jobs in the year ahead.”