As we began a new year, there are as clouds on the horizon: some good and some worrisome.
The formation of a new government has yet to emerge and be finalised as we go to press. The general consensus is we will get a ruling body made up of Fianna Fail and Fine Gael along with the newly formed regional independent coalition. If this is to be the case, one hopes that the commitment given by Fine Gael during the election to set the VAT to a rate of 11% will be honoured, giving some relief to the sector. This move will surely help with the continuing cost of doing business and keeping people employed in the industry.
The question of whereabouts the tourism brief will be placed at cabinet will be of even more significance and importance. Hospitality wants government to install an economic portfolio that prioritises business and gives tourism a seat at the cabinet table. The previous ministerial brief for tourism was an absolute shambles: a headless Minister whose last act, prior to the election, was to publish a strategy that was not worth the paper it was written on. So let’s hope the new government has a more positive engagement with the industry.
It is worth noting the mood emanating from the U.S.A. Nothing is confirmed but the new administration in the U.S. is talking about punitive tariffs on businesses operating in Ireland and Europe, which will have consequences for exchequer returns and employment here. There are concerns that some U.S. based companies may consider moving substantial elements of their businesses back to the States to negate high tax implications and charges. This could result in job losses in Ireland to a magnitude not seen for some time. This potential threat will hopefully encourage the new government to focus on our core assets: in particular tourism and all it embraces. Tourism has proven time and time again to be a stable resource for the country and it has become equal in importance to agriculture in earning capacity.
On a positive note, the ludicrous cap placed on Dublin airport numbers is to be removed (at least temporarily) thus allowing better access and a more realistic flow of tourists into the country. Equally encouraging is the number of hotel rooms coming to the market throughout the country. Numerous new hotels are nearing completion and other hotels, previously used for humanitarian reasons, are coming back into play, creating more availability nationwide. This bodes well for competitiveness and making Ireland a more attractive destination for inbound tourists. Ireland, despite everything, is still considered a value-for-money destination.
Let’s hope 2025 proves to be the year the government looks beyond the corporation tax arena and focuses on our other key assets that cannot move or leave the country. We have a tremendous asset in tourism. Now is the time to ring fence it and ensure we maximise its true potential, thus ensuring an economy that is built on securing the future for the country.
